US benchmark equity indexes experienced declines during intraday trading on Monday, primarily influenced by a significant selloff in Nvidia shares as investors analyzed the latest data from the manufacturing sector. The Nasdaq Composite fell by 1.1%, reaching 18,632.7, while the S&P 500 recorded a decrease of 0.8%, closing at 5,905.4.
The Dow Jones Industrial Average saw a drop of 0.7%, settling at 43,520.8. Within the various sectors, energy stocks faced the largest losses, whereas real estate emerged as the frontrunner among gainers. In relation to economic indicators, two recent surveys provided contrasting insights into the US manufacturing sector's performance in February.
The Institute for Supply Management's (ISM) survey suggested a slower rate of expansion compared to previous months, while S&P Global indicated a notable growth rate, marking the fastest since June 2022. This dichotomy was reflected in comments from BMO Capital Markets, which noted that the ISM survey revealed potential price pressures re-emerging in the production pipeline.
They remarked, "This is not what the Federal Reserve wants to see—especially at a time when firms might soon be facing the ramifications of significant tariffs." Further complicating the landscape, Commerce Secretary Howard Lutnick mentioned that the specific US tariffs to be enforced against Canada and Mexico starting Tuesday remain "fluid," suggesting they could be lower than the initially proposed 25%.
In contrast, the additional 10% duty on imports from China has been confirmed as "set," according to Lutnick's statements. Meanwhile, US Treasury yields saw a decline during intraday trading. The 10-year Treasury yield dropped by 5.3 basis points to 4.18%, and the two-year rate dipped by a single basis point to settle at 3.99%. On the corporate front, Nvidia shares saw a substantial drop of 7%, marking the steepest decline on the Dow and one of the worst performances on the S&P 500 and the Nasdaq.
Reports indicated that servers linked to an ongoing fraud investigation in Singapore may have utilized Nvidia chips. These chips were reportedly supplied by Dell Technologies and Super Micro Computer to local firms prior to being sent to Malaysia, as stated by Singapore's Home Affairs and Law Minister K.
Shanmugam. In the wake of these developments, Dell shares fell 4.4% throughout the day while Super Micro experienced a notable decline of 8.7%, becoming the least performing stock in the S&P 500. Conversely, Verizon emerged as a positive highlight on the Dow, rising by 1.2%. Lockheed Martin announced a partnership with Nokia and Verizon to integrate Nokia's 5G technology into its 5G.MIL Hybrid Base Station, enhancing connectivity between commercial 5G networks and military communication systems.
Lockheed Martin saw a slight increase of 0.7% during intraday trading, whereas Nokia's shares that are listed in the US surged by 5.4%. In the commodities market, West Texas Intermediate crude oil declined by 2.2%, priced at $68.23 per barrel. Economic policymakers, as highlighted by St. Louis Fed President Alberto Musalem, reiterated that "there’s more work to do" to secure price stability, with inflation rates continuing to exceed the targeted 2%.
Musalem emphasized the importance of a patient policy approach to foster maximum employment, ensure price stability, and promote sustained economic growth. In the precious metals market, gold prices rose by 1.8%, reaching $2,899.30 per troy ounce, while silver increased by 2.5%, trading at $32.28 per ounce..