The unvarnished truth about Nvidia, “Magnificent 7,” and the markets

This is the takeaway from today’s morning briefing, and what you can do subscription Received in your inbox every morning with:

Bull markets They often carry with them high expectations about future growth.

Sometimes the expectations of the investing public are too high given the new facts presented.

I believe that is the case today as we prepare to enter a series of news stories over the next month that could inject renewed volatility into the markets.

This firehose spin-off includes the ability to instantly publish social media posts by President Trump Definitions Regarding countries like Mexico and Canada, and the Federal Reserve meeting in late January where another interest rate cut will take place Maybe not in the cards (Which could attract more market-moving social media posts from said boss.)

“You look at the (hot) names like Palantir and Tesla, and some of the selling we’re seeing — I think broadly we’ll see some white knuckles in the next six months,” the Wedbush analyst said. Dan Ives He told me on Yahoo Finance Open the bid Podcast (see video above, listen below). “The headline risks of Trump, the tariffs, the 10-year Treasuries hitting 5%, what that means for the Fed (are all risks) — and so I think we’ll see some of that (volatility).”

Case in point: Markets fell on Friday after the December jobs report beat previous expectations, with 256,000 jobs added, compared to estimates of 155,000 jobs. Standard & Poor’s 500 (^ GSBCThe Dow Jones Industrial Average fell 1.5%.^ DJI(and Nasdaq Composite)^ IX) They each lost 1.6%. 10-year Treasury bond yield (^ TNX) continued the recent rally, as investors braced for a higher price environment for a longer period.

Before Friday, the market had already begun to experience convulsions in areas that were the leaders of the bull market.

Investors have been left craving for more From Nvidia (NVDA) CEO Jensen Huang CES keynote Monday evening. In response, the stock posted its worst day since September 3 on Tuesday.

Nvidia stock is down 11% since its intraday high on January 6.

Other value-rich momentum names (known as “momo” trades) like Palantir (Belter) and AMD (AMD) sold off more than 10% in the past month as traders price in against the backdrop of higher interest rates, a stronger US dollar, and increased headline risks.

The risk-off tone extended to the crypto correction as well.

Bitcoin (Bitcoin-dollar) is trading at levels not seen since November and is about 15% away from record highs.

The story continues

Meanwhile, the street came out of the gate this year Slapping discounts on stocks From old favorites like Apple (Apple).

The sell-off in Momo names and cryptocurrencies coincided with a shift into more defensive areas of the market, perhaps with investors bracing for more volatility.

iShares US Healthcare ETF (IYH) and SPDR Gold ETF (GLD(Both of them outperformed the Standard & Poor’s 500 Index)^ GSBC(and Nasdaq Composite)^ IX) year to date.

This week, Goldman Sachs went so far as to say that markets may be headed for a needed correction, having been crushed under the weight of high valuation and over-concentration in “Gig Seven” stocks. Where does Goldman see the best near-term opportunities?

Defensive sectors of the market.

“We believe there are attractive opportunities in high-end vehicle makers across markets outside the technology sector,” said Peter Oppenheimer, a strategist at Goldman Sachs. “Many of these companies are relatively defensive and have suffered from higher interest rates more than big tech.”

Others on the Street agree that the road ahead for markets may be more difficult.

“The weight of evidence suggests that the underlying market trend remains higher, driven by a resilient economy that supports strong earnings growth near 10% in 2025,” Keith Lerner, co-chief investment officer at Truist, wrote in a note to clients. “However, investors should expect a bumpier path compared to last year, which should present tactical opportunities.”

Fasten your seat belt, people.

Brian Susie He is the executive editor of Yahoo Finance. Follow Sozzi on X @Brian Susie, Instagram And on LinkedIn. Tips about stories? Email [email protected]. Three times a week, Sozzi holds insightful conversations with the biggest names in business and markets on Yahoo Finance. Open the bid Podcast. Find more episodes on our website Video center. Watch on your own Favorite streaming service. Or listen and subscribe Apple Podcast, SpotifyOr wherever you find your favorite podcasts.

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