While UBS has a bearish view on the broader stock market, the firm remains bullish on pockets of tech. Most recently, UBS analysts have upgraded shares of AI-powered data analytics platform Palantir Tech (Nasdaq: PLTR) to “buy” from “neutral” with a $180 price target. PLTR stock has tumbled by over 20% year-to-date.
Some of today’s biggest losers in the stock market sell-off include:
United Airlines (Nasdaq: UAL) down 8%.
Apollo Global (NYSE: APO) down 6.9%.
American Express (NYSE: AXP) down 6.7%.
Synchrony Financial (NYSE: SYF) down 6.1%.
UBS is pumping the brakes on U.S. stocks. The bank’s top equity strategist, Andrew Garthwaite, trimmed his view on American equities to “benchmark” in a fully invested global portfolio, citing a softer dollar, elevated valuations and policy uncertainty out of Washington.
According to Garthwaite, the same forces that fueled years of U.S. market growth are beginning to lose momentum, raising questions about whether leadership can persist at current valuations.
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The markets are sinking across the board as traders and investors run for the exits on technology and inflation-related fears. All three of the major stock market averages are suffering steep declines, including a 1% drop in the Nasdaq Composite alongside a nearly 2% decline in the Russell 2000 index comprised of small-cap names. The Dow Jones Industrial Average is reeling by 750 points, or 1.5% while the broader market is lower by 0.85%, pressured by tech stocks.
Signs of inflation rearing its head once again have weighed on market sentiment, as the latest wholesale inflation data came in hotter than expected. The PPI index, excluding food and energy, climbed higher by 0.8% last month compared with economist estimates for a much cooler 0.3% and on the heels of a 0.6% increase in December.
Here’s a look at where things stand as of morning trading:
Dow Jones Industrial Average: 48,818.54 Down 680.66 (-1.38%)
Nasdaq Composite: 22,680.72 Down 199.66 (-0.86%)
S&P 500: 6,860.29 Down 47.57 (-0.69%)
Despite the market jitters, Big Tech companies are continuing to advance their AI agendas. OpenAI, the company behind ChatGPT, has secured its latest funding round, attracting $110 billion to its coffers from the likes of Amazon (Nasdaq: AMZN), Nvidia (Nasdaq: NVDA) and Japan’s Softbank. Amazon’s investment alone is in the ballpark of $50 billion.
Netflix (Nasdaq: NFLX) is a rare gainer, tacking on 8% in today’s otherwise gloomy market. Netflix has removed itself from the Warner Bros. bidding, leaving the deal in Paramount’s hands. Apparently investors found that acquisition overly risky to begin with.
CoreWeave (Nasdaq; CRWV) is tumbling by 17% today on an aggressive $30 billion AI capex plan.
PC maker Dell (Nasdaq: DELL) is also bucking the downward trend, soaring by 18% in today’s session on a bullish AI server revenue outlook.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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