There’s more market pain to come near term, says Canaccord Genuity
Market volatility is likely to continue moving forward, according to Canaccord Genuity, and the S & P 500 could see more near-term pressure ahead as a result. Analyst Michael Welch said that because there are plenty of market-influencing events unfolding the rest of this week, with roughly 97 S & P 500 companies expected to report through Friday and Wednesday’s Federal Reserve interest rate decision, uncertainty is likely to persist. “Given the lack of oversold conditions in our indicators and the likelihood of heightened volatility due to the potential catalysts this week, we continue to expect some near-term downside for the SPX,” Welch wrote in a Tuesday note. The broad market index has pulled back nearly 1% so far this week. .SPX 1D mountain The S & P was slightly higher on Tuesday. The analyst also listed Thursday’s reading of the fourth-quarter U.S. gross domestic product and Friday’s personal consumption expenditures price index report as other important data points for the market this week. Artificial intelligence and overall market bellwether Nvidia plummeted almost 17% on Monday, dropping nearly $600 billion in market capitalization. The chip giant’s decline occurred amid a broader rout in the technology sector that saw the S & P 500 lose 1.5%. The sell-off was sparked by the emergence of Chinese AI startup DeepSeek. The company unveiled a free open-source large language model last month, saying it took less than $6 million to build. On Monday, DeepSeek also unseated OpenAI’s ChatGPT as the most-downloaded free app in the U.S. on Apple’s App Store. The development spooked investors and raised questions around the amount of money tech giants in the U.S. have devoted toward AI. Welch added that Monday’s market moves were less of a broad sell-off and more of a rotation into other sectors. He said investors turned to value stocks and moved out of growth names, with the S & P 500 Value Index outperforming its growth counterpart by 460 basis points. The move away from momentum stocks, he noted, also benefited the S & P 500 Equal Weight index, which closed slightly higher on Monday. NVDA 5D mountain Nvidia stock. Stocks were higher on Tuesday as investors looked for a rebound and snapped up shares of tech companies amid renewed confidence in the AI trade.
