S&P 500 Slips as Tech Giants Nvidia and Tesla Tumble Into Year-End

Tech Rout Drags S&P 500 Lower on Monday

Wall Street closed the first trading day of the week with a bruised ego and lighter wallets, as investors dumped high-flying tech stocks in a bid to lock in gains before the calendar flips. The S&P 500 finished down 0.9%, weighed by a broad-based retreat led by two household darlings: Nvidia and Tesla.

Chipmaker Nvidia Sheds 4.2%

Once the market’s undisputed AI king, Nvidia slipped 4.2% after reports that export-license headwinds could crimp overseas sales. Traders who rode the stock’s 240% surge this year wasted little time booking profits, sending the chip giant to its worst single-day drop since October.

“When a name that’s up triple digits starts to wobble, it triggers a cascade of stop-losses,” said Quincy Karter, senior equity strategist at Atlantic Meridian. “Add in thin holiday volume and the moves get exaggerated.”

Tesla Tanks 5.1% on Delivery Jitters

Elon Musk’s electric-vehicle juggernaut fared even worse, sliding 5.1%. Investors keyed off fresh rumors—later denied by the company—that December deliveries might miss internal targets. With Tesla up more than 100% year-to-date, portfolio managers opted to ring the register rather than risk a downbeat announcement in early January.

Year-End Rebalancing in Focus

Monday’s selling pressure wasn’t confined to headline names. The tech-heavy Nasdaq Composite dropped 1.3%, while the Dow Jones Industrial Average managed a modest 0.2% gain thanks to strength in consumer staples and healthcare. Market veterans note that December’s final stretch often sees position squaring as fund managers lock in performance fees and reposition for the new year.

• Apple, Microsoft and Alphabet each fell more than 1%
• Cyclical sectors—industrials and materials—also retreated on softer-than-expected PMI data
• Small-cap Russell 2000 eked out a 0.4% advance, hinting at rotation into cheaper corners of the market

What’s Next for the S&P 500?

With only three trading sessions left in 2023, the index is clinging to a 23% year-to-date advance—its best annual return since 2019. Historically, the week between Christmas and New Year’s produces low-volume chop, but surprises can still surface. Traders will be watching Thursday’s jobless claims and next Tuesday’s ISM manufacturing print for early clues about the economy’s trajectory heading into 2024.

For now, the takeaway is simple: even bull markets need to catch their breath, and Monday’s tech-led pullback may be just that—a pause, not a panic.