On Friday, June 21st local time, the three major US stock indexes closed with mixed gains and losses, with the Nasdaq down 0.18% and closing flat this week; The S&P 500 index fell 0.16%, with a cumulative increase of 0.61% this week; The Dow Jones Industrial Average rose 0.04%, with a cumulative increase of 1.45% this week.
Technology giant Nvidia fell more than 6% in two days, with its market value evaporating over 220 billion US dollars. Apple fell by over 1%. Microsoft and Google A rose 0.92% and 1.89% respectively, with their latest closing prices reaching historic highs.
The trading volume of "Sanwu Day" skyrocketed
Nvidia's stock price has fallen for the second consecutive day
On that day, the volatility of the three major indices increased due to the curse of the Three Witches Day. Friday is the so-called "first day of the Three Witches Gathering", which refers to the quarterly expiration date of ETFs, stocks, and index options, occurring on the third Friday of March, June, September, and December each year. It usually leads to a surge in US stock trading volume and sudden price fluctuations.
According to the estimation of option platform SpotGamma, the quarterly option maturity this Friday will be the largest in history, reaching $5.5 trillion in nominal option value. This may trigger short-term market volatility, and with the largest exchange traded fund (ETF) tracking technology stocks also experiencing quarterly rebalancing, the weights of giants such as Microsoft, Nvidia, and Apple will undergo significant changes. It is expected to increase the volatility of the US stock market.
With the expiration of contracts and the emergence of a large number of closing positions, the trading volume of US stocks usually amplifies and leads to significant fluctuations in the market, which may bring some short-term operational opportunities to traders who are eager for volatility.
At the same time, about one-third of NVIDIA's open call contracts expired on Friday, June 21st. Nvidia options expire every Friday, but the trading volume and open contracts typically increase during the weeks when monthly options expire.
On Friday local time, NVIDIA experienced a significant decline after opening, dropping nearly 5% at one point and closing down 3.22%. Nvidia's rise to become the world's most valuable company did not last long. The stock price of this semiconductor giant has fallen by a total of 6.7% in the past two days, with a market value of over 220 billion US dollars evaporated. The latest market value is 3.11 trillion US dollars, lower than Apple's 3.18 trillion US dollars and Microsoft's 3.34 trillion US dollars.
Steve Sosnick, Chief Strategist at Interactive Brokers and former stock trader at Salomon Brothers, said, "Currently, this situation is indeed unsettling. Of course, a short-term consecutive decline does not mean Nvidia's stock price is heading towards weakness in the long term."
The group that continues to be bullish on Nvidia believes that Nvidia will have more profits in the future. They believe that Nvidia is at the forefront of large-scale technological change and is a major supplier of chips supporting artificial intelligence applications. It is expected that revenue will double this fiscal year to $120 billion and increase to $160 billion next year. In contrast, Nvidia's competitor Microsoft expects revenue to only grow by about 16% this fiscal year.
Jamie Cox, Executive Partner of Harris Financial Group, said that although there have been some signs of excessive expansion in the market, it is currently unclear whether the market has reached the limit of artificial intelligence driven rebound - unable to continue its "rapid growth".
Analysis shows that American investors are facing a stock market twin story: Nvidia is pushing the S&P 500 index to new highs on its own, while less important companies are falling and far below the high. The Russell 2000 index, which tracks small cap stocks, has fallen 17% from its peak in November 2021 and has not seen any growth since the beginning of this year.
Huang Renxun still has 700 million unsold items
Previously, according to 144 documents released on NVIDIA's official website, NVIDIA CEO Huang Renxun sold the company's shares again after a nine month hiatus, selling 240000 shares on June 13-14, totaling $31.2 million in cash. Just three days later, from June 17th to 18th, Huang Renxun sold another 240000 shares and cashed out a total of $31.89 million.
It is understood that as early as March 14th this year, Huang Renxun set up a stock sales plan called "10b5-1", which is expected to sell up to 600000 shares of NVIDIA stocks by March 31st, 2025. It is worth noting that 600000 shares are calculated based on the number before the split. Due to Nvidia's announcement of a 10-1 shareholding plan on May 23 this year, Huang Renxun will sell up to 6 million shares of Nvidia's stock by the end of March 2025, with a total value of over 756 million US dollars (approximately RMB 5.49 billion) based on the latest market price. Although this is far from the market value of Nvidia of more than $3 trillion, with more and more comments about the imminent collapse of Nvidia's foam in the market, the CEO's share sale plan has caused investors' confidence in holding Nvidia shares to fluctuate.
Billionaire investor Stanley Druckenmiller said last month that he reduced his big bet on Nvidia in 2024 and said, "Artificial intelligence may be over hyped now, but underestimated in the long run."
Microsoft and Google reach new heights
On Friday, the 11 major sectors of the S&P 500 index rose 6 times and fell 5 times. Among them, stocks in the information technology sector led the decline.
Popular technology stocks have fluctuated in price. Google A, Amazon, Intel, Texas Instruments, Cisco, and NetEase saw a surge of over 1%, while Microsoft and Tesla saw a slight increase. Lilly, Arm, Chaowei Semiconductor, and TSMC saw a slight decline. Apple, ASMC, AMD, Qualcomm, and Meta saw a drop of over 1%, while Micron and Nvidia saw a drop of over 3% and Broadcom saw a drop of over 4%.
Microsoft rose 0.92% to its latest closing price of $449.78, setting a new historical high. Microsoft partner OpenAI recently acquired enterprise search and analysis startup Rockset. Rockset was founded by former Facebook employees, focusing on providing data retrieval, indexing, and search technologies for commercial clients, covering multiple industries from gaming to fintech. OpenAI announced on Friday that it will integrate Rockset's technology and team to enhance its data utilization capabilities on the platform, helping commercial customers and developers better utilize data. OpenAI's Chief Operating Officer, Brad Letkap, stated that by integrating Rockset's foundational technology into OpenAI's products, customers will be able to transform data into actionable intelligence. This is the first time OpenAI has integrated both the technology and employees of the acquired company in an acquisition. The specific terms of this transaction have not been disclosed.
Google A rose 1.89%, with its latest closing price at $179.630, setting a new historical high. According to Caixin, according to data from the Securities and Exchange Commission (SEC), Sandal Pichai, CEO of Google's parent company Alphabet, sold 22500 shares of Google stock on Thursday, June 20th, for $3.99 million.
Apple fell 1.04%. Apple announced on Friday that due to strict regulations under the European Union's Digital Markets Act (DMA), it will not launch its latest Apple Intelligence, iPhone mirroring, and SharePlay screen sharing features in the EU market this year. Apple stated in a statement, "We are concerned that the interoperability requirements of DMA may force us to compromise the integrity of our products in a way that endangers user privacy and data security."
The European Union has designated six major technology companies, including Apple, as "gatekeepers" for online services and requires stricter scrutiny. In response to Apple's plan, the European Commission stated, "As long as we comply with our rules aimed at ensuring fair competition, 'gatekeepers' can provide services in Europe." In addition, Apple is facing formal warnings from EU regulatory agencies that prevent applications from guiding users to find cheaper subscription solutions online.