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Nvidia shares sink up to 8% as tech sell-off reignites

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Nvidia shares sink up to 8% as tech sell-off reignites

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Nvidia shares sank by as much as 8 per cent on Tuesday as a heavy sell-off in chipmaking stocks reignited ahead of a number of closely watched earnings reports from Big Tech companies this week.

The Silicon Valley chipmaker, which is the dominant provider of the powerful processors needed for building artificial intelligence systems, has fallen more than 20 per cent, cutting its market capitalisation by almost $750bn, since it briefly became the world’s most valuable publicly traded company last month.

Other chip stocks followed. Arm, the semiconductor designer that has also been a big beneficiary of investors’ enthusiasm for AI-related stocks this year, was down about 7 per cent in late-afternoon trading in New York.

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Both companies are still more than double their value this time last year, driven by a wave of capital spending by the likes of Microsoft, Google, Amazon and Meta to build out the technical underpinnings of AI.

Ahead of Microsoft’s earnings report after Tuesday’s market close, traders were fretting that profit expectations for companies involved in AI are too high and that capital spending is running far ahead of returns.

“We’ve seen money flow out of Big Tech, mostly I think because they have had an incredible run-up, and that of course gave room for a little bit of a sell-off,” Daniel Newman, chief executive of The Futurum Group, told the Financial Times. “Sector rotation, continued economic uncertainty, elections, geopolitics, and concerns around China” had all contributed to Nvidia’s fall.

The tech-heavy Nasdaq Composite index was down 1.3 per cent while the benchmark S&P 500 was 0.6 per cent lower. Shares in chipmakers AMD and Intel — which report earnings this week — were also trading lower.

“There’s a lot of angst in the market ahead of reporting,” said Emmanuel Cau, head of European equity strategy at Barclays. Apple, Amazon and Meta will also be publishing their quarterly numbers later this week.

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He added that investors were also cautious ahead of a busy few days for central banks, with interest rate decisions by the Bank of Japan, Federal Reserve and Bank of England all due.

Investors have been selling tech companies in recent weeks, pushing the Nasdaq down about 9 per cent from its peak in mid-July. The index suffered its worst day since 2022 last week after results from Alphabet and Tesla sparked investor worries about the size and timing of likely returns from the so-called Magnificent Seven tech companies’ vast investments in AI.

AI-related stocks have driven the stock market rally this year. Despite recent pullbacks, the Nasdaq and the broader S&P 500 are still ahead by roughly 14 per cent.

“Market participants used this morning’s equity gains to unload stocks in the afternoon ahead of pivotal announcements from the Fed and Bank of Japan tomorrow — and four of the Mag Seven reporting this week,” said José Torres, senior economist at Interactive Brokers.

“Bullish players will be aiming for a bright picture on the future of AI in Mag Seven earnings calls.”

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Gaza ceasefire announced after 15 months of war

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Gaza ceasefire announced after 15 months of war

Israel and Hamas have agreed a ceasefire to halt the 15-month war in Gaza and free the remaining hostages, mediators said, raising hopes of an end to a devastating conflict that has shaken the Middle East and the world beyond.

But, despite celebrations erupting across the region, the office of Israel’s Prime Minister Benjamin Netanyahu warned that some details still had to be finalised as of Wednesday night.

The multiphase agreement, due to take effect on Sunday, a day before Donald Trump returns to office as US president, was announced by Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin al-Thani. However, he noted that the parties still had to give final approval.

The agreement offers hope of a halt — and potentially an end — to a brutal war that has become the deadliest chapter in the decades-long history of the Israeli-Palestinian conflict, leaving Gaza in ruins, consuming Israeli society, and pushing the Middle East to the brink of a full-blown war.

The fighting was triggered by Hamas’s brutal October 7, 2023 attack on Israel, during which fighters from the Palestinian militant group killed 1,200 people, and took 250 hostage, in the deadliest day for Jews since the Holocaust.

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Israel responded with a ferocious offensive in Gaza that has killed more than 46,000 people and fuelled a humanitarian catastrophe in the enclave.

Previous attempts to broker a deal to end the conflict and secure the release of the 98 mainly Israeli hostages still in Gaza — not all of whom are alive — had repeatedly foundered when Israel and Hamas refused to make the necessary concessions.

Supporters of Israeli hostages kidnapped during the October 7 2023 attack by Hamas © Ronen Zvulun/Reuters

But the re-election of Trump — who threatened that there would be “all hell to pay” if the hostages were not released before his inauguration — injected renewed momentum into the long-stalled talks.

Trump was among the first leaders to hail the deal on Wednesday, writing on his Truth Social platform ahead of the formal announcement: “WE HAVE A DEAL FOR THE HOSTAGES IN THE MIDDLE EAST. THEY WILL BE RELEASED SHORTLY.”

He added his national security team would “continue to work closely with Israel and our Allies to make sure Gaza NEVER again becomes a terrorist safe haven”.

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In comments of his own hailing the deal, US President Joe Biden described the Doha-based talks as “one of the toughest negotiations I have ever experienced”.

He added that the agreement would “halt the fighting in Gaza, surge much needed-humanitarian assistance to Palestinian civilians, and reunite the hostages with their families after more than 15 months in captivity”.

But Netanyahu’s office said shortly after Trump’s announcement that there were “still several sections left open in the proposal and we hope that the details will be finalised tonight”.

A person close to the talks said a deal had been done after the Qatari prime minister had met Hamas and Israeli negotiators separately in a final push for an agreement.

But the person added that, while Hamas had agreed to the deal, conceding on one of its final demands, Israel had since “raised a new outstanding issue”. They said: “Mediators are working to resolve it.”

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An Israeli official said that the final details which Netanyahu’s office said still needed to be finalised related to the identity of those Palestinian prisoners set to be released in exchange for hostages.

Israel’s government is due to vote on the deal, which is based on a three-phase proposal first outlined by Biden last year. Far-right ministers, including national security minister Itamar Ben-Gvir, have expressed opposition, but are not expected to be able to block the deal.

The first phase will involve a 42-day truce, during which 33 Israeli hostages — including children, all female prisoners, the sick and elderly — will be freed in exchange for Palestinian prisoners held in Israeli jails and a dramatic increase in humanitarian aid deliveries into Gaza.

The two parties would begin negotiating the second phase no later than day 16 of the truce. During this period the remaining hostages, including male soldiers, are meant to be released in exchange for more Palestinian prisoners.

If fully implemented, the second phase will also lead to a permanent ceasefire and the full withdrawal of Israeli troops from Gaza. 

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The final phase would involve the return of all the bodies of hostages who died, and the reconstruction of Gaza, under the supervision of Egypt, Qatar and the UN.

The talks over a deal intensified in mid-December after a ceasefire between Israel and Hizbollah in Lebanon.

A senior Biden administration official said one issue impeding the completion of the talks was Hamas’s refusal to acknowledge how many hostages it was holding and which ones would come out in the first phase of a deal.

The Palestinian group agreed at the end of December to a list of some 33 hostages, accelerating the end of the talks.

Biden’s top Middle East adviser Brett McGurk was joined in the last days of the talks by Trump’s Middle East envoy Steve Witkoff. A senior Biden administration official called it “a historic and crucial partnership” to finalise the arrangements. 

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The talks ran into the early hours of Wednesday, with McGurk, Witkoff and Egyptian and Qatari officials upstairs with the Israeli negotiators, and Hamas downstairs, nailing down dozens of final details.

Abu Shukri, a community organiser sheltering in the Maghazi refugee camp in Gaza, said people in the neighbourhood had lined the streets and balconies in anticipation of the announcement of the ceasefire deal. As news reached them, people shouted and shot in the air in celebration. 

“We just thank God,” Abu Shukri said of the news. “But we’ve given our children, we gave our parents.” 

Additional reporting by Malaika Tapper in Beirut and Neri Zilber in Tel Aviv

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LA fires are still raging, but forecasters expect calmer winds in the coming days

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LA fires are still raging, but forecasters expect calmer winds in the coming days

An urban search and rescue team from Mexico combs through the ruins of a beachfront house searching for victims in the aftermath of the Palisades Fire in Malibu, Calif., on Tuesday.

Valerie Macon/AFP via Getty Images


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Valerie Macon/AFP via Getty Images

This is a developing story. For the latest local updates head to LAist.com and sign up for breaking news alerts.

Another day of fierce winds gusting to 65 mph in mountainous areas of Los Angeles and Ventura Counties in Southern California was expected on Wednesday, but weather more conducive to firefighting operations is expected soon.

The National Weather Service (NWS) issued another red flag warning for the area until 3 p.m. PST, cautioning of more of the windy and dry conditions that have fed raging fires for more than a week. The strong Santa Ana winds have helped push the deadly blazes through the Los Angeles suburbs, killing at least 25 people and leveling expensive real estate in Pacific Palisades and Altadena.

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All told, the fires have engulfed more than 40,000 acres (more than 62 square miles), according to Cal Fire.

“The good news is that for the last two days we’ve had no increase in acreage at the Eaton Fire and it remains estimated at 14,117 acres with 35% containment,” Los Angeles County Fire Chief Anthony Marrone said of one of the largest fires. 

The Palisades fire, which spans more than 23,000 acres, is just 19% contained, according to Cal Fire.

On Tuesday, meteorologists initially called for particularly strong winds that turned out to be lighter that expected, according to NPR member station LAist.

But a reprieve in the high winds was expected from Thursday into Saturday. NWS meteorologist Ryan Kittell noted that the service is worried about “one last [wind] enhancement” through Wednesday and that peak winds would be highest in Ventura County.

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Speaking at a news conference on Wednesday, Los Angeles Mayor Karen Bass had difficulty describing the devastation that has befallen her city.

“The massive, massive destruction. Is unimaginable until you actually see it,” Bass said. Even so, she said, it was time “to begin to think about how we rebuild.”

Since the fires broke out last week, responders from across the U.S., Canada and Mexico have come to the aid of Southern California. “Yesterday, I also had the opportunity to meet with our international partners from Mexico to express our heartfelt gratitude for their assistance. The outpouring of support from both near and far, I tell you, is absolutely remarkable,” LA Fire Chief Kristin Crowley said.

Of the 25 dead, 17 were killed in the Eaton Fire and eight in the Palisades Fire, LAist says. Officials said of the 13 still listed as missing, two bodies had been recovered but not yet positively identified.

More than 55,000 customers were without power on Wednesday in Los Angeles and Ventura counties, according to PowerOutage.us.

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How to help and stay safe

Resources to help stay safe:

➡️ With fire danger still high, authorities implore you to follow evacuation orders

➡️ What to do — and not do — when you get home after a fire evacuation

➡️ Is smoke in your home? Here’s how to make an air purifier from a box fan

➡️Trying to stay safe in a wildfire? There’s an app that can help

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Ways to support the response and recovery:

➡️ Want to help fire victims? Here’s what experts say does the most good and places seeking volunteers

➡️ Wildfire donations and volunteering: How and where to help

➡️ Share: These are the steps fire victims need to take to make an insurance claim

The California Newsroom is following the extreme weather from across the region. Click through to LAist’s coverage for the latest.

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Pilots Battling L.A Fires Face Heat, Turbulence, and High-Pressure Risks

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Pilots Battling L.A Fires Face Heat, Turbulence, and High-Pressure Risks

Piloting a firefighting aircraft is sweaty, tiring work, Mr. Mattiacci said. The conditions that increase fire risk — hot days, high wind, often mountainous areas — also make for turbulent flying conditions. The aircraft fly at low speeds, increasing the turbulence, he added.

“You get pulled up out of your seat and your head bangs against the roof,” he said. In the hot conditions, pilots must keep just hydrated enough not to have to use the bathroom, on flights that can last up to five hours, he said.

There’s also a risk of flying into the thick, blinding smoke that wildfires send up, he said. The aircraft flying low to the ground — sometimes as low as the height of treetops — meaning there’s a significant risk of flying into power lines, radio towers and buildings.

“When we lose all visual reference, it gets a bit scary,” he said.

The stronger the winds, the harder it is to get close to the fire, as winds push the smoke around and obstruct visibility.

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The large air tankers in Australia drop retardant from an altitude of about 100 to 150 feet, he said, while smaller ones can fly even lower. The largest tankers — which can carry up to 9,400 gallons of fire retardant at a time, and have been used to fight the Southern California fires — drop from about 250 feet, according to the National Interagency Fire Center.

Mr. Mattiacci said that he often feels pressure as he looks down from the cockpit at homes and structures under threat, knowing his job is to help save them. And if the fire retardant doesn’t land where it’s needed, he added, during a fast-moving fire, “there might not be another chance.”

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