Market Wrap | Tech Stocks Sink on Fed Rate Worries While Arqit Quantum and DouYu Dazzle with Double-Digit Gains

On Thursday, January 16, Eastern Time, all three major U.S. stock indices ended the day lower, with the S&P 500 dropping 0.21% to 5,937.34 points, the Dow Jones Industrial Average down 0.16% at 43,153.13 points, and the Nasdaq Composite Index losing 0.89% to close at 19,338.29 points.

The session saw significant movements in several stocks, with Arqit Quantum surging by 37.35%, DouYu jumping 27.67%, and ImmunityBio climbing 27.20%. Conversely, Blaize Holdings plummeted by 32.29%, Atomera dropped 24.80%, and Jupiter fell by 20.93%.

In the tech sector, major names suffered declines after failing to meet short-term investor expectations for product launches. NVIDIA pulled back more than 6%, marking its largest single-day drop since September 3, 2024, while Tesla and Amazon fell over 4% and 2%, respectively. Chips stocks mostly tumbled; AMD slid over 5%, whereas Broadcom and TSMC declined over 3%. Notably, some pharmaceutical stocks opposed the trend, with Moderna rising more than 11% and Novavax increasing over 10%.

U.S. economic indicators showed robust performance, with November job openings rising to a six-month high and the December ISM services index growing faster than anticipated. The upbeat economic data suggests persistent inflation, which triggered fears about the likelihood of the Federal Reserve cutting rates later this year as U.S. Treasury yields soared.

The Nasdaq Golden Dragon China Index marginally dipped by 0.2%, with mixed performances in popular Chinese stocks; Xiaomi soared nearly 10%, while Miniso surged by over 5%. Conversely, NIO dropped more than 4%, and Alibaba and VIPShop slid over 1%.

In the commodities market, global oil prices gained traction. The New York Mercantile Exchange saw February deliveries of light crude futures increase by 69 cents, finishing at $74.25 per barrel, while March Brent crude futures escalated by 75 cents to $77.05 per barrel. International gold prices climbed, with COMEX gold futures rising by $18.00, or 0.68%, to $2,665.40 per ounce.

The release of strong economic data in the U.S. dampened prospects of a Federal Reserve rate cut, causing stocks to descend further as investors reassess inflation risks. Despite economic data buoying market sentiment earlier, tech stocks led the market's downward push with significant losses among industry giants. Meanwhile, financial stocks provided limited upside as Morgan Stanley's Q4 earnings exceeded estimates, boosting its share price by more than 4%.

Among Chinese concept stocks, DouYu made headlines with a spectacular 27.66% increase following the announcement of a special $3 billion dividend plan and new joint-CEO appointment. Additionally, the electric vehicle sector showed strength, with Xpeng Motors climbing 6.28%, NIO gaining 1.46%, and Li Auto rising 0.91%.

Cryptocurrencies also experienced volatility, with Bitcoin failing to maintain the morning high above $100,000, closing at $99,000 during U.S. trading hours. Ethereum plunged nearly 4% for the day, reflecting the turbulent nature of digital currencies.