SMCI Surges While The S&P 500 Re-balances And NVIDIA Under Scruting

• Wall Street with high open on Monday
• Nvidia shares declined after China’s State Administration for Market Regulation launched an antitrust investigation into the company. 
• Super Micro Computer shares jumped after receiving an extension from Nasdaq to file its outstanding financial reports with the SEC.
• Apollo Global Management and Workday will join the S&P 500 index effective December 23, replacing Qorvo and Amentum Holdings

US equity markets are showing mixed performance, with smaller indices outperforming. The US2000 leads gains, up 0.70% to 2427.2. The US30 advances 0.11% to 44747, while the VIX remains flat at 15.88. The MEXComp is unchanged at 51284. However, larger indices are underperforming with the US500 declining 0.03% to 6096.1 and the US100 falling 0.11% to 21634.44.

European markets are showing broad strength, with France’s FRA40 leading gains up 0.80% to 7497.4, followed by the UK100 rising 0.66% to 8369.0. Austria’s AUT20 advances 0.45% to 3580, while Germany’s DE40 gains 0.40% to 20420.1. Central European markets also show positive momentum with the W20 up 0.39% to 2323.6 and the EU50 gaining 0.39% to 4997.6. Switzerland’s SUI20 adds 0.11% to 11787. Only Spain’s SPA35 (-0.01% to 12056) and Italy’s ITA40 (-0.18% to 34720) are trading lower.

In S&P 500 sectors, Energy leads gains with a 0.68% advance, followed by Consumer Discretionary up 0.66% and Materials adding 0.35%. Health Care, Real Estate, Consumer Staples, Financials, and Industrials show modest gains between 0.02-0.10%. However, three sectors are trading lower: Utilities (-0.07%), Communication Services (-0.40%), and Information Technology (-0.72%). The overall market is slightly negative with the S&P 500 down 0.15%.

Current volatility observed on Wall Street. Source: xStation 

The Nasdaq-100 index, represented by the US100 contract, is hovering near its all-time highs. The mid-November high at 21,255 serves as initial support for bulls, followed by the mid-July high of 20,895.

For bears, key target levels include the 50-day SMA at 20,696 and the August highs near 19,917, which align with the 100-day SMA, providing strong support zones.

The RSI has bounced from the overbought zone but remains elevated, indicating continued bullish momentum. Meanwhile, the MACD is expanding and still shows bullish divergence, reinforcing the upward trend. Source: xStation

News

• Reddit (RDDT.US) shares rose 6.5% after Morgan Stanley analyst Brian Nowak upgraded the stock to Overweight and nearly tripled his price target to $200, the highest on Wall Street. Despite missing the stock’s 380% surge since its March IPO, Nowak believes Reddit’s rapidly expanding engagement and advertising initiatives present significant growth opportunities heading into 2025. The company’s shares saw their best performance in October with an 81% gain, driven by strong results and outlook that demonstrated successful advertising technology investments.
• Nvidia (NVDA.US) shares declined 2.45% after China’s State Administration for Market Regulation launched an antitrust investigation into the company. The probe focuses on potential violations of conditional approval terms from Beijing regarding Nvidia’s 2020 acquisition of Mellanox Technologies. The investigation comes just a week after the U.S. implemented additional export controls on China’s access to high-end semiconductors. The original approval required Nvidia to maintain uninterrupted supply of GPUs and networking equipment to China and ensure non-discriminatory treatment of Chinese customers.
• Omnicom Group (OMC.US) announced plans to acquire Interpublic Group (IPG.US) in an all-stock transaction that will create the world’s largest advertising business. Under the deal terms, Interpublic shareholders will receive 0.344 Omnicom shares for each IPG share, with Omnicom shareholders retaining 60.6% ownership of the combined entity. The merger, expected to close in the second half of 2025, aims to generate $750 million in cost synergies and combine complementary data and technology platforms. IPG shares jumped 10% while Omnicom fell 2.4%.
• Apollo Global Management (APO.US) and Workday (WDAY.US) will join the S&P 500 index effective December 23, replacing Qorvo and Amentum Holdings. Apollo shares climbed 4% to reach $184.45, while Workday surged 8% to $288. The addition comes as part of the index’s quarterly rebalancing, with Apollo’s market value exceeding $100 billion making it the third-largest alternative asset manager behind KKR and Blackstone.
• Super Micro Computer (SMCI.US) shares jumped 5.4% after receiving an extension from Nasdaq until February 25, 2025, to file its outstanding financial reports with the SEC. The AI server maker, which expects 67% revenue growth to $25 billion in fiscal 2025, has been working to resolve compliance issues following Ernst & Young’s resignation as auditor in October. The company recently announced plans to replace its CFO and appointed a new accounting chief following an internal investigation that found no evidence of wrongdoing.
• Chinese Tech Stocks surged after China’s Politburo announced plans for “moderately loose” monetary policy in 2025 and pledged to stabilize property and stock markets. Leading gainers included PDD Holdings (+11%), Bilibili (+12%), KE Holdings (+12%), Alibaba (+6.9%), JD.com (+9.5%), Baidu (+5.9%), NetEase (+9.1%), and Trip.com (+7.8%). The policy shift, China’s first major monetary stance change since 2011, aims to address persistent deflation concerns and support economic growth amid trade tensions.

Other news coming from individual S&P 500 index companies. Source: Bloomberg Financial LP

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