Trading Day: US rate outlook trumps everything
(Corrects ‘Today’s Key Market Moves’ section to say US yield curve flattens, not steepens)
US stocks diverged from global trends and finished lower on Tuesday, as a fresh report of unexpectedly high US Anthropic‘s upcoming public listing.
• EXCLUSIVE-Anthropic eyes $1.4 trillion IPO valuation in test of <a s AI fervor
• Nvidia’s clubby board faces a sticky ‘honey pot’ test
• US consumer prices rise briskly for third straight month
• AI debt faces pressure as Democrats prepare to take over Congress
• China’s trade surplus soars past $1 trillion as AI boom powers exports
• Today’s Key Market Moves STOCKS: Japan +3%, China flat. Europe +0.3% near record high, UK -0.3%. Nasdaq -0.7%, S&P 500 -0.4%, Dow -0.3%. SECTORS/SHARES: Six sectors in the S&P 500 fall, five rise. Tech -1.4%, financials +0.5%. Nvidia -5.5%, Skydance -7.5%. CoreWeave up after results. Charter Communications +11%. FX: US dollar rises. Biggest G10 decliner is Aussie dollar, -0.9%; biggest EM decliners Chilean peso -2%, Brazilian real -1.5%. BONDS: US yields spike sharply, 2-year yield +20 bps, curve flattens. Mixed 10-year auction. COMMODITIES/METALS: Oil -1%. Gold -3%
The unusual situation surrounding Nvidia CEO Jensen Huang’s personal ties to an alleged Chinese spy continues to exert significant pressure on the company’s stock, which slid another 5.5% on Tuesday. This brings the total decline from its October 6 peak to 31%. In other words, roughly $1.7 trillion in market value has been wiped out in just over a month.
However, considering Nvidia’s massive influence on Wall Street, it is remarkable how resilient the broader market has remained. On October 6, Nvidia shares, the Nasdaq, and the S&P 500 all reached record highs. If you had been told then that Nvidia stock would drop more than 30% in just over a month, would you have expected the Nasdaq to be down less than 10% and the S&P 500 to be off by only 4%? Unlikely.
IPO, IPO, it’s off to work we go
We finally have the Anthropic IPO valuation: $1.4 trillion. That figure represents the high end of the price range on a fully diluted basis, which accounts for securities like restricted stock and stock options. Alternatively, on a non-diluted basis that excludes those securities, Anthropic’s market value based on its planned float would be approximately $1 trillion. That is a notable decrease from some of the more optimistic projections seen in recent weeks, which reached as high as $2 trillion.
