Stock Market Today: Stocks Go Into Reverse as Nvidia Slumps

Green Nvidia sign at booth at 2023 Chinajoy

(Image credit: Costfoto/NurPhoto via Getty Images)

Stocks opened higher Friday as investors mulled over the February jobs report. However, the main indexes swung lower mid-morning and stayed there through the close as several heavy hitters in the tech sector sold off.

Ahead of the open, data from the Bureau of Labor Statistics showed the U.S. added 275,000 new jobs in February, blowing past economists' expectations for 200,000 jobs. Still, job gains for both December and January were revised lower and the unemployment rate rose to 3.9% from 3.7%.

The February jobs report signaled robust hiring "while also showing an increase in unemployment, moderating wage growth, and anemic labor force participation," says José Torres, senior economist at Interactive Brokers. "Bulls were focusing on the weaker aspects of the report by buying up speculative assets, stocks, and bonds," Torres adds, but bears pulled "an intraday interception."

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Indeed, any excitement over the downwardly revised readings and the rising unemployment rate quickly vanished as several large and mega-cap tech stocks sold off sharply – dragging the main indexes with them.

Nvidia's reversal erases $127 billion in market value

Most notable was Nvidia (NVDA), which was up more than 5% in early trading only to end the day down 5.6% – a drop of $127 billion in market value. The red-hot chipmaker is one of the best stocks of the year, up nearly 77% even with today's decline.

For some additional context, consider the fact that this year-to-date gain has increased NVDA's market value by $967 billion, or $95 billion more than Berkshire Hathaway's (BRK.B) entire market cap.

Given NVDA's jaw-dropping run up the price charts, it's likely today's decline was a result of profit-taking. However, there was weakness seen across the industry.

Fellow semiconductor stocks Broadcom (AVGO, -7.0%) and Marvell Technology (MRVL, -11.4%), for instance, both fell sharply after earnings. While Broadcom beat on its top- and bottom-lines for fiscal Q1, its full-year revenue fell short of analysts' estimates. Marvell, meanwhile, reported in-line results for its fourth quarter but gave weaker-than-anticipated first-quarter guidance.

SOTU address does little to move markets

Also making headlines Friday was President Joe Biden's State of the Union address. The president covered a variety of topics Thursday evening, including new homebuyer tax credits and drug prices. He also proposed raising the rates for large corporations and billionaires.

However, considering anything proposed in the State of the Union likely has a long and arduous path to becoming a reality, "the potential for higher taxes on the wealthy … isn't upsetting the apple cart for markets," says Ryan Detrick, chief market strategist at Carson Group.

Indeed, today's volatile session came courtesy of the jobs report and sell-off in tech stocks. As for the indexes, the Nasdaq Composite, which was up 1% at its intraday high, finished the day down 1.2% at 16,085. The S&P 500 closed down 0.7% at 5,123, while the Dow Jones Industrial Average shed 0.2% to 38,722.

February CPI on deck

Looking ahead, the February Consumer Price Index (CPI) is arguably the most anticipated event on next week's economic calendar. The report, due out Tuesday morning, "should alleviate concerns that inflation is reaccelerating after the January data," writes Stephen Juneau, economist at BofA Securities, in a note to clients.

Juneau expects the headline CPI to rise 0.4% month-over-month – quicker than January's 0.3% increase – due to rising gas prices. But core CPI, which excludes volatile food and energy prices, is believed to be up 0.3% from January to February, below the prior month's 0.4% reading.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.