Nasdaq, S&P 500 Pulling Back Off Record Closing Highs

Stocks have moved mostly lower over the course of the trading session on Monday, with the Nasdaq and the S&P 500 pulling back off last Friday’s record closing highs. The Dow is moving lower for the third consecutive session.

Currently, the major averages are just off their worst levels of the day. The Dow is down 94.99 points or 0.2 percent at 44,547.53, the Nasdaq is down 112.06 points or 0.6 percent at 19,747.72 and the S&P 500 is down 28.05 points or 0.5 percent at 6,062.22.

A slump by shares of Nvidia (NVDA) is weighing on the markets, with the AI darling tumbling by 3.1 percent on the day.

The drop by Nvidia comes amid news a Chinese regulator has launched an investigation into whether the chipmaker violated the country’s antimonopoly laws.

Traders may also be cashing in on recent strength in the markets, which has lifted the major averages to record highs.

Overall trading activity remains somewhat subdued, however, as traders look ahead to the release of closely watched inflation data later in the week.

Reports on consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could impact the outlook for interest rates.

While the Federal Reserve is widely expected to lower rates by another 25 basis points next week, there is some uncertainty about whether the central bank will continue cutting rates early next year.

Sector News

Despite the weakness being shown by the broader markets, gold stocks have shown a substantial move to the upside, driving the NYSE Arca Gold Bugs Index up by 5.2 percent to its highest intraday level in almost a month.

The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for February delivery surging $35.20 to $2,694.80 an ounce.

A jump by the price of crude oil is also contributing to significant strength among energy stocks, while interest rate-sensitive utilities stocks are under pressure amid an increase by treasury yields.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. While Japan’s Nikkei 225 Index crept up by 0.2 percent and Hong Kong’s Hang Seng Index spiked by 2.8 percent, South Korea’s Kospi plunged by 2.8 percent.

Meanwhile, European stocks have moved mostly higher on the day. The French CAC 40 Index is up by 1.1 percent, the U.K.’s FTSE 100 Index is up by 0.7 percent and the German DAX Index is just above the unchanged line.

In the bond market, treasuries are giving back ground following recent strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.5 basis points at 4.188 percent.