Stock Market: Tech Rally Boosts Market Amidst Boeing Woes and Oil Price Plunge

The stock market saw a rebound on Monday, with significant gains in big tech stocks following product announcements from industry giants like Apple and Nvidia, just ahead of the Consumer Electronics Show. The Nasdaq Composite surged by 2.2%, marking its best performance since November, while the S&P 500 gained 1.4%, and the Dow Jones Industrial Average increased by 0.6%.

Nvidia set a record high after unveiling new AI chips designed for personal computers. However, Boeing faced a substantial setback as the Federal Aviation Administration (FAA) ordered the temporary grounding of over 170 Boeing 737 Max 9 jets, leading to an 8% drop in Boeing’s stock.

Bitcoin briefly surpassed $47,000, awaiting the Securities and Exchange Commission’s decision on a spot Bitcoin ETF scheduled for Wednesday. Meanwhile, oil prices experienced a decline after Saudi Arabia reduced the price of February crude oil orders.

Investors anticipated December inflation data and the upcoming earnings reports from major banks such as JPMorgan Chase, Bank of America, and Wells Fargo. The previous week witnessed a sell-off, particularly impacting high-flying tech stocks of 2023.

Salesforce and Intel led the Dow higher, with gains of 4% and 3.3%, respectively. Apple rose by 2.4% after announcing the launch date for its Vision Pro virtual reality headset. Nike shares increased by 1.5% amid reports of ending its long-standing partnership with golf legend Tiger Woods. Johnson & Johnson inched up 0.2% following the announcement of its $2 billion acquisition of biotech company Ambrx Biopharma. Merck also made a 0.1% gain after offering to acquire Harpoon Therapeutics for $680 million.

Boeing’s stock took a hit, dropping by 8% after the FAA ordered the grounding of some of its 737 Max 9 jets for inspection, triggered by an incident where part of an Alaska Airlines plane’s fuselage detached after takeoff.

Chevron slipped by 0.6%, reflecting a broader decline among oil majors after Saudi Arabia’s price cuts on February orders of Arab Light Crude.

In the S&P 500, American Airlines led with a 7.2% gain following an upgrade from Morgan Stanley. Big tech companies like Microsoft, Amazon, and Alphabet contributed significantly to the index’s boost, with gains ranging from 1.9% to 2.7%. Oil companies lagged due to the 4% slump in oil prices, impacting Schlumberger, ConocoPhillips, and ExxonMobil.

The Nasdaq 100 experienced a rebound in chip stocks, led by Marvell Technologies, up 7%. Nvidia rose by 6.4% after unveiling new AI chips, and competitor Advanced Micro Devices (AMD) gained 5.5% with the release of its AI PC chip. Cybersecurity firms CrowdStrike Holdings and Fortinet climbed by 5.6% and x%, respectively. DoorDash rose by 3.9% after receiving an upgrade to “buy” from analysts at Jefferies. Oilfield services provider Baker Hughes fell by 2.9% alongside declining oil prices. Regeneron shares lost 1.1% after the drugmaker reported lower-than-expected sales of its best-selling drug, Eylea, in the fourth quarter.

Oil futures saw a significant drop as Saudi Arabia cut prices for February crude oil shipments, with West Texas Intermediate falling by 4% to trade at less than $71 a barrel, and Brent crude, the European benchmark, dropping a little over 3% to trade around $76.

In summary, the market experienced a mixed day with tech stocks rallying, oil prices plunging, and Boeing facing challenges. The week ahead holds key economic data and earnings reports that will likely influence market trends.