Nvidia CEO Jensen Huang delivers keynote remarks at the Consumer Electronics Show in Las Vegas, Nevada on January 6, 2025.
Patrick T. Fallon | AFP | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Technology drags down the Nasdaq
American markets were mixed Monday. The S&P 500 and Dow Jones Industrial Average rose, but Nasdaq Composite fell amid a broad sell-off in technology. Asia-Pacific markets mainly traded higher on Tuesday. China’s CSI 300 rose around 2.7%, and Hong Kong’s Hang Seng index added 2.3 percent. of Japan Nikkei 225the only exception, fell nearly 2% as the yield on the country’s 40-year government bond rose to 2.766%, the highest since 2007, LSEG data showed.
A potential new offer from US Steel
Cleveland Cliffs is a partner with a rival Nucor ua potential offer for US Steelwhose takeover by Japan Nippon steel was blocked by the White House earlier this month, sources told CNBC’s David Faber. The offer would be in the high stakes of $30. Nippon planned to buy US Steel for $55 a share in a deal valued at more than $14 billion.
Electric car boom in China to slow in 2025: HSBC
China sales of new energy vehicleswhich includes battery-only and hybrid cars, will grow by only 20% in 2025, it is predicted HSBC analysts. That’s a big drop from 42% growth in 2024, according to the China Automobile Association. NEV penetration of new car sales exceeded 50% by the second half of the year, according to the association.
Additional chip export restrictions
USA will be impressive new export restrictions on artificial intelligence chips, depending on the level in which the countries are classified, the US government announced on Monday. For example, close US allies will not face restrictions on access to AI chips. Nvidia, the largest supplier of AI chips, on Monday called the rule a “comprehensive overreach.”
Elon Musk taking over TikTok US?
The Chinese government is considering a plan to sell TikTok’s US business to Elon MuskBloomberg News reported Monday, citing anonymous sources. That would allow TikTok to continue operating in the country if the US Supreme Court decides to uphold the law that would effectively ban Chinese-owned TikTok in the US.
[PRO] Opportunities outside the “magnificent seven”
Magnificent Seven stocks have driven much of the S&P 500’s 23% return in 2024. While the portfolio manager expects the stocks still have room to run this year, he advises investors to be selective within the Magnificent Seven — and see opportunities in technology stocks outside that basket.
Conclusion
Technology stocks underperformed on Monday as investors took profits from the 2024 winner and looked for this year’s winner.
The Nasdaq Composite lost 0.38 percent. Big tech names popular with investors generally fell in the session on Monday. Palantir — that stocks with the best results in the S&P last year —slid 3.4%, while Nvidia lost 2%, building on its losses from last week. Nvidia fell nearly 6% during that period, while Palantir lost more than 15%.
“In our view it’s a necessary part of the correction phase and we’re probably further along in this correction than many investors think because many stocks peaked in late November, early December,” AXS Investments CEO Greg Bassuk said, adding that the jobs report “cemented” those concerns from Friday.
However, the S&P 500 rose 0.16% and the Dow Jones Industrial Average climbed 0.86% as investors rotated into non-tech stocks such as Amgen, Caterpillar and UnitedHealth.
That doesn’t mean these sectors will take over as market leaders anytime soon — or at all. Sector rotation is a common occurrence in the markets as investors secure their returns and look for the next stocks with growth potential. and against the background of rising rates puts more pressure on growth-oriented tech stocks than value stocks, which typically make up the Dow.
Furthermore, the AI craze isn’t over, judging by the latest earnings reports from TSMC and Foxconn, which operates as Hon Hai Precision Industry. Both companies saw revenue rise due to strong demand for AI-related products.
A long-term rotation of technology and artificial intelligence is unlikely. But one inside the field cannot be dismissed.
— CNBC’s Samantha Subin, Hakyung Kim and Brian Evans contributed to this report.
