WSJ What’s News - What’s News in Markets: Nvidia Selloff, JetBlue Soars, U.S. Steel Deal

Episode Date: September 7, 2024

What’s causing Nvidia’s recent decline? And how did a summer tech outage help JetBlue? Plus, why is deal uncertainty weighing on U.S. Steel? Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ecolab Water for Climate. Less water, more growth. Results will vary. Learn more at Ecolab.com slash EWC. Ecolab Water for Climate. Transforming the way the world thinks about water. Hey, listeners. It's Saturday, September 7th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it! Hope you all had a great Labor Day weekend. The holiday, as you know, meant that our first September week trading was a short one. Markets closed Monday. On Tuesday, the gloom was back with major indexes notching their worst day in nearly a month, thanks to weak manufacturing data that rekindled these ongoing concerns about the health of

the economy. Then on Wednesday, we heard from the Labor Department, which said U.S. job openings in July fell more than expected. So investors were pretty on edge ahead of Friday's monthly jobs report, which stood to influence how big the Fed's expected interest rate cut will be later this month. That report showed that U.S. job growth rebounded in August. That was an uptick from July data that, as we saw last month, sparked recession fears and rattled markets around the world.

This week's mixed labor data didn't give traders the clarity that they were hoping for. And, as you might expect, the gloom only got worse for stocks on Friday. All in all, the three major indexes ended the week lower. The Nasdaq lost nearly 6%, the S&P 500 fell about 4%, and the Dow Jones Industrial Average slipped about 3%. Economy worries weren't the only thing that had the market down this week. Let's talk about tech stocks. Specifically, the chipmakers at the center of the AI craze that powered huge rallies earlier this year. The tide has changed a bit now, and they're getting hit

by concerns that AI demand won't live up to these lofty, priced-in expectations. I mean, just look at Nvidia, the AI poster child, right, whose stock more than tripled in 2023 and has more than doubled in 2024. On Tuesday, it lost nearly $280 billion in market value, the most ever by a company in a single session. And that huge drop wasn't on any company-specific news, either. We did get some company-specific news this week, though, about another chipmaker, Broadcom, which posted its quarterly results on Thursday.

Broadcom actually beat earnings and revenue expectations, but investors seemed to care much more about its revenue guidance that fell short of analysts' expectations. As a result, Broadcom shares fell 10% on Friday. A bright spot this week was June 20th, result, Broadcom shares fell 10% on Friday. A bright spot this week was JetBlue Airways, which you might say was flying high after boosting its third-quarter guidance. The airline bumped up its capacity and revenue outlook,

thanks to favorable fuel prices and thanks to strength in its July bookings. You don't have to be a frequent flyer to remember how July's tech outages totally upended air travel and led to mass cancellations. Total meltdown. Well, JetBlue was one of the carriers that had relatively smoother operations, and the company said it got a windfall of demand from other airlines' disruptions as a result. So investors gave the stock a lift. Sorry for the pun. JetBlue shares gained

about 7% on Thursday, and the stock ended the week up about 4%. And last but not least, let's talk U.S. Steel and the uncertain future of its pending sale. The Wall Street Journal reported this week that President Joe Biden is poised to block the planned $14.1 billion takeover by Japan's Nippon Steel using his executive powers, after earlier this year saying that the steelmaker should remain domestically owned and operated. Meanwhile, U.S. Steel CEO told the Journal in an article published on Wednesday that the company would close steel mills and potentially move its headquarters if the plant's sale collapsed.

Then, we heard from another supporter of scrapping the deal, rival steelmaker Cleveland Cliffs, would close steel mills and potentially move its headquarters if the planned sale collapsed. Then we heard from another supporter of scrapping the deal, rival steelmaker Cleveland Cliffs, which on Thursday said it'd be open to acquiring assets from US Steel. For context, US Steel had earlier chosen Nippon's acquisition offer over one from Cleveland Cliffs. US Steel's shares dropped 17% on Wednesday and didn't manage to claw back much ground the rest of the week. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in The Score, my column

in the Wall Street Journal's Exchange section. Today's show was produced by Pierre Bienamé, with supervising producer Tali Arbel. I'm Francesca Fontana, have a great weekend, and see you next Saturday.