Greetings N2K reader!

This week’s world famous News Haiku™ competition is about the last U.S. penny ever being minted (it’s true, they are no more!). Vote on the winner in today’s poll below!

—Matt Davis, Need2Know Chedditor

News You Need2Know

What’s the stock market up to, eh?

$SPX ( ▼ 1.56% )   $DJI ( ▼ 0.84% )   $NDX ( ▼ 2.15% )

Companies mentioned in today’s newsletter

  $NVDA ( ▼ 3.15% )   $UBS ( ▼ 3.69% )   $BTC.X ( ▼ 8.21% )   $HOOD ( ▼ 10.11% )   $COIN ( ▼ 7.44% )   $BAC ( ▼ 1.96% )   $WMT ( ▲ 6.46% )  

Big swings keep rocking Wall Street as S&P 500 goes up 2%, down 3%

Take back what I said yesterday about checking your 401(k). Wall Street continues to experience roller-coaster fluctuations as the S&P 500 $SPX ( ▼ 1.56% ) swung from a promising 2% rise to a steep 3% drop from its heights yesterday. The market’s instability stems largely from concerns over tech giants like Nvidia $NVDA ( ▼ 3.15% ) , whose stocks have been riding the AI momentum wave. Despite promising financial forecasts — “it is very hard to see how this stock does not keep moving higher from here,” said analysts at UBS $UBS ( ▼ 3.69% ) — the specter of an AI bubble looms large. Investors worry whether hefty investments in AI technology will genuinely yield the projected economic gains.

The crypto market isn’t faring much better; Bitcoin $BTC.X ( ▼ 8.21% ) saw a sharp decline, dragging down associated companies like Robinhood $HOOD ( ▼ 10.11% ) and Coinbase $COIN ( ▼ 7.44% ) by 8.4% and 6.9%, respectively. A recent Bank of America $BAC ( ▼ 1.96% ) survey amplified the jitters, highlighting a record percentage of investors who felt companies might be “overinvesting,” raising fears of an AI bubble as the number-one market risk.

It wasn’t all gloomy, however, as Walmart $WMT ( ▲ 6.46% ) emerged as a beacon of success. Delivering robust sales and profits that surpassed Wall Street expectations, the retailer saw its stock climb by 5.7%.

Song of the day: Oscar Jerome, ’Give Back What You Stole From Me’

This song came out in 2020. It’s just one of my favorites. Let’s call it “political jazz,” shall we? Or shall we not? It’s just a great soundtrack for the stock market when you’re tempted to check your 401(k) this morning.

Nvidia shattered earnings records — so why did the stock drop the next morning?

"The top takeaway it was another monster quarter. And next quarter is gonna be another monster quarter," Adam Levine with Barron’s said. "Demand is insatiable for their equipment and for the stuff that runs on their equipment at the cloud that they sell to. So demand's insatiable right now, and it's not going anywhere in the short term."

Despite the stellar performance, the stock was trading under its fifty-day moving average ahead of earnings, reflecting a unique standard set for the AI leader. As Levine notes, "They’re kind of held to a different standard than everybody else... it's not enough that they beat expectations. They have to beat a lot and they have to give great guidance."

Levine also addressed the bearish headlines surrounding major investors like Peter Thiel, Michael Burry, and Softbank, arguing their moves against the firm were often misread or "overblown." He explained that Softbank sold shares to fund a massive investment in OpenAI, while Peter Thiel’s fund position was small and subsequently exited. "I didn’t take those very seriously, but obviously they drove sentiment," he said.

Ultimately, Levine believes the earnings report reminded everyone that "the demand is very real and it's not going anywhere anytime soon," though he cautions the biggest long-term threat is macro.

Basically, the stock market is all about emotions. And numbers. And emotions. And numbers. #NotFinancialAdvice