Nvidia, 'Great 7' And The Honest Truth About The Market

I think that's the case today. Next month, there's going to be a lot of news that can bring new volatility to the market.

What's coming out of that fire hose include market trends posted by Trump on social media, immediate tariffs on countries like Mexico and Canada, and the possibility of further cuts in interest rates at the Federal Reserve in late January (more market trends posted by that president on social media).

"You see [popular] companies like Palantir, Tesla, and you see some of the selling that we're seeing. I think over the next six months we're just going to see a white fist," Wedbush analyst Dan Ives told me on Yahoo Finance's opening bidding podcast (see video above, listen to it below). "The risks that Trump headlines, tariffs, 10 years of government bonds going up to 5% and the impact of this on the Federal Reserve is [all risks]. So I think we're going to see [variability]."

Case in point: Markets tumbled on Friday after the December jobs report beat expectations and added 256,000 jobs. That compares with 155,000 estimates. The S&P 500 (^GSPC) fell 1.5%, while Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) fell 1.6%, respectively. The 10-year Treasury yield (^TNX) continued its recent gains as investors braced for a higher long-term interest rate environment.

Even before Friday, markets were starting to experience convulsions in some areas that had already led the bull market.

Investors longed for more during Nvidia CEO Jensen Huang's CES keynote on Monday evening. The stock hit its worst day since Sept. 3, accordingly, on Tuesday.

Nvidia shares are down 11% since the all-day high on Jan. 6.

High-value momentum names (aka "Momo" deals) like Palantir (PLTR) and AMD ( AMD) sold more than 10% last month as traders reflected a higher interest rate environment, a bullish U.S. dollar and increased headline risk in their prices.

The risk-averse atmosphere has also extended to crypto patches.

Bitcoin (BTC-USD) is trading at its lowest level since November and is down about 15% from its all-time high.

Meanwhile, Wall Street has made a downgrade on shares of long-popular companies, including Apple Inc AAPL, starting this year.

The Momo name and crypto sell-off coincided with a move into more defensive territory in the market as investors braced for greater volatility.

The iShares US Healthcare ETF (IYH) and SPDR Gold ETF (GLD) have outperformed the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) since the start of the year.

This week, Goldman Sachs even went as far as saying the market is headed for the necessary correction due to high valuations and an over-focus on "Magnificent Seven" stocks. Where will Goldman find the best short-term opportunities?

a defensive sector of the market.

"We think there's an attractive opportunity for high-quality combinations, even in markets that aren't in the tech sector. Many of these companies are relatively defensive and have been hurt more by rising interest rates than by megacap technology," said Goldman Sachs strategist Peter Oppenheimer.

Others on Wall Street also agree that the market path could be bumpier going forward.

"The weight of the evidence is driven by a resilient economy, with key market trends remaining higher, underpinning solid earnings growth of nearly 10% in 2025." Keith Lerner, co-chief investment officer at Truist, wrote in a client note. "But investors should expect a bumpier path compared to last year, which should present tactical opportunities."

Fasten your seatbelts, everyone.