Wall Street slides as Nvidia earnings and jobs data come into focus

Chip maker to deliver earnings this week amid growing discourse on stretched valuations

Nvidia chief executive Jensen Huang speaks during the company's annual GTC conference in Washington. AFP

US stocks fell on Monday as investors looked ahead to the Nvidia earnings and government data scheduled to be reported this week.

Nvidia's results, due to come out after the closing bell on Wednesday, are expected to test investor appetite amid growing talk about stretched valuations. Shares in the chip maker dipped 1.83 per cent on Monday.

Nvidia chief executive Jensen Huang last month expressed confidence that the company was due for another strong period of growth, saying it has $500 billion in orders for 2025 and 2026 combined.

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“This is how much business is on the books,” Mr Huang said at Nvidia's GTC conference in Washington.

The Dow Jones Industrial Average lost 557 points on Monday, or 1.18 per cent. The S&P 500 and Nasdaq Composite fell 0.92 and 0.84 per cent, respectively.

Meanwhile, Peter Thiel's hedge fund offloaded its entire 537,742 shares of Nvidia, valued at about $85 million at the end of the second quarter, according to a 13F filing with the Securities and Exchange Commission.

That followed Japanese firm SoftBank, which in an earnings statement last week said it sold its 32.1 million Nvidia shares in October.

SoftBank dumps entire $5.8bn Nvidia stake

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“Investors’ appetite for elevated levels of AI infrastructure spending has soured,” Deepwater Asset Management managing partner Gene Munster wrote to clients in a note last week.

“That appetite shift began when Meta reported on October 29 and guided for expenses next year to grow faster than revenue, a flipped script from what Meta had been delivering over the past years despite the high level of investment.”

Payrolls data

Investors will also be closely monitoring US jobs data due to be released this week that had been delayed by the government shutdown.

The payrolls data comes amid a rift inside the Federal Reserve, where officials are split on whether to cut interest rates next month.

Members on the Fed's rate-setting committee are deliberating which side of their dual mandate requires greater attention: inflation or employment.

The lack of government data has made the decision more challenging, with the Fed relying more on reports from the private sector.

One report from the Challenger, Gray and Christmas firm last week showed US employers announced more than 153,000 job cuts last month. And while pre-shutdown government data showed the unemployment rate at a relatively stable 4.3 per cent, the rate of hiring has slowed.

“My focus is on the labour market and after months of weakening it is unlikely that the September jobs report later this week or any other data in the next few weeks would change my view that another cut is in order,” Fed governor Christopher Waller, who is on US President Donald Trump's shortlist to succeed Jerome Powell as Fed chairman, said in prepared remarks during an event in London on Monday.

Speaking at the Kansas City Fed earlier on Monday, Fed vice chairman Philip Jefferson said the growing risks on both sides of the Fed's dual mandate requires it to “proceed slowly” with further rate cuts.