Markets News, September 11, 2024: Stocks Surge as Nvidia Soars; S&P 500, Nasdaq Extend Winning Streaks

Nvidia CEO Says Company Seeing "Incredible" Demand

Nvidia Corporation (NVDA) shares surged 8% Wednesday after CEO Jensen Huang said the chipmaker is seeing "incredible" demand. 

Huang said at Goldman Sachs' Communacopia + Technology Conference that “everything is sold out,” as customers clamor for Nvidia infrastructure to support artificial intelligence (AI).

“Our company works with every AI company in the world today,” Huang said, according to a transcript provided by AlphaSense. "Everybody's counting on us."

Nvidia's chips are used by several major cloud providers, including Microsoft (MSFT) and Amazon (AMZN). Both companies have told investors they expect to boost spending on AI infrastructure.

-Andrew Kessel

Biggest S&P 500 Movers on Wednesday

Advancers

• Vice President Kamala Harris's debate performance helped boost shares of companies in the green energy industry. If Harris wins the election, she is likely to continue Biden administration policies aimed at promoting clean energy solutions. Shares of solar panel maker First Solar (FSLR) led the S&P 500 higher, skyrocketing 15.2%.
• Shares of Albemarle (ALB), the world's largest lithium producer, soared 13.6% following reports that a major battery producer in China intends to scale back its lithium production. Slumping lithium prices have weighed heavily on Albemarle's share price performance this year, but UBS analysts believe the production cuts could help rebalance global supply-and-demand dynamics, representing a possible inflection point in the lithium market.
• AES Corp. (AES), a Virginia-based power utility with a clean energy focus, may have also benefitted from the bright outlook for green energy following the debate, as its shares jumped 8.6%. In addition, the investment bank Jefferies initiated coverage of AES stock with a "buy" rating and a $20 price target. Analysts praised AES for its diverse portfolio of energy infrastructure assets around the world, highlighting the company's shift toward U.S. renewables and away from coal exposure.

Decliners

• Shares of health insurer Humana (HUM) tumbled 5.3%, posting the steepest loss in the S&P 500. Wednesday's drop extended declines suffered by the stock earlier this week after a report highlighted downside risks to the Star ratings of Humana-operated health plans. The results of the presidential debate added to downward pressure on healthcare stocks, with analysts suggesting that increased odds for a Democratic victory could hurt investor sentiment on Medicare-related businesses.
• Conagra Brands (CAG) shares lost 4.0%, receding from a 52-week high posted in the previous session. The company recently added to its strong snack portfolio by acquiring Sweetwood Smoke & Co., the maker of Fatty Smoked Meat Sticks. However, the packaged food company issued lower-than-expected guidance when it reported results in July, citing a difficult consumer environment.
• After 155 years in existence, Campbell Soup (CPB) announced a rebranding initiative that includes dropping "soup" from its corporate name. Newly minted as "The Campbell's Company," the firm also owns snack brands such as Pepperidge Farm and Snyder's of Hanover, and it recently added Rao's tomato sauce to its portfolio. Shares of the company fell 3.8% following the rebranding news.

-Michael Bromberg

Shares of Lithium Producer Albemarle Jump

Shares of Albemarle (ALB), the world's largest lithium miner, rose more than 13% following reports that a key Chinese battery producer intends to reduce lithium production levels.

Lithium prices have tumbled in recent months amid an uncertain demand outlook for electric vehicles (EVs), whose batteries represent a key driver of demand for the metal. High levels of supply, particularly in China, have exacerbated the price weakness.

According to Reuters, the EV battery and energy storage system producer Contemporary Amperex Technology (CATL) on Wednesday said that it would curtail lithium production at its large mine in Yichun City in the Chinese province of Jiangxi. 

In a research report, UBS analysts said that CATL's strategy shift could reduce monthly lithium carbonate production in China by 8%. Analysts believe this could prove to be an important inflection point for the lithium market, with more balanced supply-and-demand dynamics supporting a recovery in prices while reinvigorating profitability for producers like Albemarle.

The slump in lithium prices has dragged heavily on Albemarle's share price performance. The stock fell following the lithium miner's latest quarterly report in August, which showed a loss of $188 million for the period on a year-over-year revenue decline of nearly 40%.

Despite Wednesday's gains, Albemarle stock is still down nearly 40% in 2024.

-Michael Bromberg

Arm Holdings Soars as Morgan Stanley Makes it 'Top Pick'

Arm Holdings (ARM) shares jumped Wednesday after Morgan Stanley analysts named the chip designer "Our New Top Pick" because of its reach into artificial intelligence (AI) products.

The analysts wrote Wednesday that they see Arm “as an important part to the shift to edge AI,” which is the use of AI data closer to its source, rather than centrally located in a cloud computing facility or data center.

 The Morgan Stanley research report pointed to this week’s launch of the Apple (AAPL) iPhone 16 and Arm’s architecture used in the phone’s A18 processor.2

The analysts called the company their “favored play” on the emerging edge AI technology, adding that they expect mobile devices will fuel the initial upside for this deployment of AI, followed by infrastructure and autos.

Morgan Stanley rates the stock as "overweight," with a price target of $175. The stock was up 9.2% at $138.90 in late trading Wednesday.

-Bill McColl

Warren Buffett Sheds More Bank of America Stock

Bank of America (BAC) shares lost ground Wednesday after news that Warren Buffett's Berkshire Hathaway (BRK.A)(BRK.B) again reduced its stake in the bank. 

In a regulatory filing Tuesday, Berkshire reported that it sold a total of approximately 5.8 million Bank of America shares valued at about $228.7 million in separate moves on Friday, Monday, and Tuesday. The average sale price was $39.50 per share.

With this latest sale, Berkshire held about 858.2 million shares in BofA at the time of the filing, still a stake greater than 11%. It has sold off more than $7 billion worth of the stock since mid-July.

When asked about Buffett’s decision, Bank of America CEO Brian Moynihan said at Barclays Global Services Financial Services Conference, “look, he's been a great shareholder."

"I don't know what exactly he's doing because, frankly, we can't ask and we wouldn't ask, but on the other hand, the market is absorbing the stock, and it's a portion of the volume every day, and we're buying the stock, a portion of the stock, and so life will go on," Moynihan added.

BofA stock was off about 1.4% at $38.76 around 3:00 p.m. ET. Even with the day's losses, shares of Bank of America are up about 14% year-to-date.

-Bill McColl

Watch These JPMorgan Levels Amid Stock's Slump

JPMorgan Chase (JPM) shares were lower again Wednesday after falling more than 5% on Tuesday, which was their largest one-day decline since June 2020. The decline came after the bank’s president said Tuesday that Wall Street’s expectations for net interest income and expenses in 2025 were overly optimistic amid impending interest rate cuts and lingering inflation.

Since the start of September selling has intensified in the stock, with Tuesday’s drop occurring on the highest trading volume since mid April, indicating active participation by larger market participants.

Investors should monitor key lower price levels on JPMorgan's chart at $200, $191, and $180, while also eyeing potential overhead resistance around $227.

Read the full technical analysis piece here.

-Timothy Smith

Traders Scale Back Bets on Big September Rate Cut

Wednesday's inflation report solidified traders' expectations that the Federal Reserve will take a less aggressive approach to monetary policy in its upcoming meeting.

Bets on interest rate cuts have swung wildly in recent weeks, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

 The volatility has been caused by market watchers working to predict the Fed officials' next moves as central bankers rebalance their focus between weakening jobs and falling inflation.

Just before the Consumer Price Index (CPI) inflation data was released, traders were pricing in a 29% chance that the Federal Reserve would cut rates by half a percentage point at their meeting next week. After the report, that chance fell to 15%. Traders were likely influenced by rising rent costs, which pushed up overall measures of inflation.

Beyond September, the largest group of traders thinks a more aggressive cut is possible. Traders think there will most likely be 50 basis-point (bps) cuts in both November and January, with a smaller quarter-point cut in December.

-Taylor Tompkins

Watch These GameStop Levels as Stock Plunges

GameStop (GME) were down 16% Wednesday morning after the video game retailer announced a 20 million share offering and reported a 31% drop in quarterly sales.

Wednesday’s drop opens the door for a potential breakdown below the lower trendline of a symmetrical triangle.

Investors should monitor key post-earnings chart levels at $18.50, $15.25 and $13.25, while also eyeing $30.50 as a bullish target during meme-fueled rallies.

Read the full technical analysis piece here.

-Timothy Smith

Trump Media Shares Slide After Debate

Shares of Trump Media & Technology Group (DJT) tumbled Wednesday morning following the presidential debate between Vice President Kamala Harris and former President Donald Trump.

Trump Media shares were 10% lower in recent premarket trading Wednesday, extending a recent pullback that has sent the stock to its lowest point since before the company merged with Digital World Acquisition Corp. (DWAC) and went public in March.

Trump Media's meme stock-like peaks and valleys that were common in the months after merging with DWAC and becoming a public company have faded in recent weeks, with the stock trending consistently lower since mid-July.

-Aaron McDade

Major Index Futures Lower Ahead of Inflation Reading

Futures tied to the Dow Jones Industrial Average were down 0.4%.

S&P 500 futures were down 0.2%.

Nasdaq 100 futures were off 0.3%.