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It was a mixed session for stocks on Thursday, with market participants reducing exposure to tech names and boosting bets on cyclical plays. The main indexes failed to make any major moves, though, as caution took hold ahead of a key jobs report and the start of fourth-quarter earnings season.
Technology was the worst-performing S&P 500 sector today, shedding 1.6% as several Magnificent 7 stocks slumped. Most notable was Nvidia’s (NVDA) 2.2% drop, which came after Stifel analyst Ruben Roy said following an investor meeting with the chipmaker’s chief financial officer, Colette Kress, that the company is “still cautious” toward China.
While President Donald Trump said last month that he would allow sales of Nvidia’s H200 artificial intelligence (AI) chips to China in exchange for a 25% cut of revenue, several media reports suggest Beijing has asked tech companies not to buy them.
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“We would say the tone remained optimistic around China, but the statements remained prudently conservative,” says Ruben. “In our view, China is a swing factor to the positive for NVDA, with sell-side and buy-side models not counting on these sales just yet.”
Ruben has a Buy rating on the blue chip stock and a $250 price target, representing implied upside of 35% to current levels.
Apple extends losing streak to seven
Thursday’s loss made Nvidia one of the worst Dow Jones stocks on the day, as was fellow Mag 7 member Apple (AAPL) was not far behind.
AAPL stock dropped 0.5% for its seventh straight daily loss. It’s now down 5% for the year to date.
Amid this pullback, Apple has lost its ranking as the world’s second-biggest company by market cap. That honor now goes to Alphabet (GOOGL, +1.1%), whose 4% year-to-date advance now gives it a market capitalization of $3.94 trillion. AAPL’s market cap closed today at $3.84 trillion. (For what it’s worth, Nvidia is tops at $4.50 trillion.)
The big losses in these mega-cap tech stocks caused the Nasdaq Composite (-0.4% to 23,480) to close in the red, while gains in consumer stocks helped the S&P 500 finish flat at 6,921 and pushed the blue-chip Dow Jones Industrial Average up 0.6% at 49,266.
Home Depot, Nike top the Dow
Home Depot (HD) was the second-best Dow stock on Thursday, gaining 3.0%, while Nike (NKE) came in first with its 3.2% advance. NKE rose even after Needham downgraded the athletic apparel and footwear retailer to Hold from Buy.
“Although we continue to believe that [Nike] CEO Elliott Hill is doing the right things for the brand long-term, we believe that the turnaround is taking longer than expected, and visibility into the turnaround remains low,” writes Needham analyst Tom Nikic.
Defense stocks pop on Trump’s budget proposal
Defense stocks also saw notable gains Thursday after President Trump called for a $1.5 trillion defense budget.
“I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” Trump wrote on Truth Social. This marks a significant increase to the $901 billion defense budget Congress passed for 2026.
Honeywell International (HON) climbed 2.9%, Lockheed Martin (LMT) rose 4.3% and Kratos Defense & Security Solutions (KTOS) surged 13.8%.
Jobs data, earnings season on tap
The next few weeks will be busy with a string of economic reports set to be released ahead of the next Fed meeting and fourth-quarter earnings season about to kick off.
First up on the economic calendar is tomorrow morning’s release of the December nonfarm payrolls report, which is expected to show lukewarm jobs growth.
Next week, meanwhile, we’ll start to see corporate earnings reports start to roll in, with big banks JPMorgan Chase (JPM) and Bank of America (BAC) among those reporting.