And there’s an inevitable search for some smoking gun. Chipmakers Broadcom and Marvell Technology also fell on Friday after their quarterly reports failed to impress investors.
Hardly a game changer in itself, but Nvidia has been sued by three authors who said it used their copyrighted books without permission to train its NeMo AI platform.
And in another tech sideswipe on Monday, the European Union’s privacy watchdog said the European Commission’s use of Microsoft software breached EU privacy rules and the bloc’s executive also failed to implement adequate safeguards for personal data transferred to non-EU countries.
Either way, the pullback does come after a wobbly week for the leading “Magnificent Seven” of megacaps – perhaps indicating some feeling that they’d all come a little too far too fast. After hitting record highs earlier in the session, the S&P500 ended down 0.6% on Friday and futures were in the red again early Monday.
The hiccup was hardly a reflection of the February employment report – which was another statement on the rude health of the U.S. economy. New payrolls beat forecasts last month, but the overall labor market cooled with a rise in the jobless rate and ebbing of wage growth.
That nailed in June for a first interest rate cut from the Federal Reserve and saw full-year easing expectations climb to 95 basis points and two-year Treasury yields drop to the lowest in a month.
And that all sets up Tuesday’s consumer price report for February as the next key moment in the Fed’s assessment of the disinflation path. Headline annual CPI inflation is expected to remain steady at 3.1% – with the “core” rate ebbing to 3.7% from 3.9% the prior month.
By contrast overseas, China’s jarring bout of deflation appears to have eased somewhat as weekend data showed annual CPI inflation there for the first time in six months – exceeding forecasts with a 0.7% advance. And yet downward price pressures persisted with a deeper 2.7% annual slump in producer prices.
How much the Lunar New Year holiday affected the readouts remains to be seen, but China’s stock benchmarks advanced 1.2% on Monday nonetheless amid some relief.
China has also asked banks to enhance financing support for state-backed China Vanke and called on creditors to consider private debt maturity extension, in a rare intervention from central government to help an embattled property firm.
