Dow jumps as investors spin out of tech; Nvidia sinks

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.

Bottom line, Nvidia sinks
The Dow Jones Industrial Average rose 260 points as investors turned out of technology and into banking and energy stocks, such as Goldman Sachs and Chevron. Shares of Nvidia sank, extending last week’s decline, but are still up about 140% year-to-date. The S&P 500 and Nasdaq Composite both traded in negative territory. The 10-year Treasury yield was little changed as investors await Friday’s key inflation data. US oil prices rose 1% amid flared Israel-Lebanon tensions.

No pre-selection cuts
David Rubenstein, co-founder of The Carlyle Group, said Monday that the Federal Reserve is unlikely to cut rates before the November election because of political considerations. “Generally the Fed wants to stay out of politics,” Rubenstein told CNBC’s Andrew Ross Sorkin on “Squawk Box.” He expressed concern about possible criticism from former President Donald Trump if the rate cut happens before the election. “I suspect the market is more right than wrong in saying that a rate cut is likely to come after the election,” he said.

Bitcoin falls
The price of Bitcoin on Monday fell below $60,000, marking its lowest level in more than a month. It has lost nearly 11% in the past week. The decline coincided with a second straight week of exits from crypto investment products. James Butterfill, head of research at CoinShares, attributed the selloff to concerns over the number of rate cuts. “We’ve now seen $1.2 billion in outflows from crypto ETFs over the past two weeks, all of which started after the FOMC meeting,” he said, alluding to the Fed’s reluctance to cut rates until there is more evidence of falling inflation.

New factory Novo
Novo Nordisk will invest $4.1 billion in a new manufacturing plant in North Carolina to ramp up production of its in-demand weight loss drug Wegovy and diabetes treatment Ozempic. The investment is part of the Danish company’s broader effort to address ongoing supply shortages and increase its manufacturing presence in the US. Construction is expected to be completed between 2027 and 2029. The plant will employ 1,000 workers, bringing the total number of Novo Nordisk employees in North Carolina to 3,500.

Confidential IPO
Fast fashion retailer Shein has confidentially filed for a public listing in London after failing to get support from US lawmakers for its initial public offering due to concerns over labor practices and tax exemptions. The move to London does not guarantee an IPO there, as Shein would prefer to go public in the US and still needs approval from Beijing. Despite being headquartered in Singapore, Shein’s supply chain remains largely based in China, raising regulatory concerns about its operations and data.

[PRO] Peak Nvidia
Nvidia’s incredible rally has surpassed even dot-com-era records, with the chip stock now marking unprecedented historic moves – could this signal a peak for beloved AI?

After months of complaints from investors that Wall Street’s rally was too narrow and too reliant on a handful of tech stocks, the market appeared to be taking a step toward expansion. The Dow Jones Industrial Average was the standout performer, partly at the expense of AI favorite Nvidia.

Ray Wang, founder of Constellation Research, attributes Nvidia’s decline to broader economic concerns. “The pullback is coming from a macro level. People are concerned about the consumer side, where the economy is going, and they are making some gains before the summer,” Wang explained. “I’ll buy the dip.”

Wang has a $200 price target on Nvidia, which represents a nearly 70% upside from Monday’s close. During an interview with CNBC’s “Squawk Box,” he outlined several reasons for his bullish stance on stocks.

As investors cash in on Nvidia, the S&P 500 has shown remarkable resilience, going 377 days without experiencing a 2.05% selloff. This lack of volatility has been attributed to investor caution, with many sitting on the sidelines worried that the market and stocks may already have gone ahead.

Bank of America technical equity strategist Stephen Suttmeier believes there’s plenty of cash on the sidelines, but investors are concerned we’re in an “overbought” market.

“I think the market is continuing to grow because not enough people are on board with it,” Suttmeier told CNBC’s “Squawk Box” on Monday. “We’ve stayed overbought…and people hate chasing overbought markets, and I think that’s why overbought markets keep going up.”

Suttmeier noted that the benchmark S&P 500 could rise as much as 20% this year.

— CNBC’s Hakyung Kim, Yun Li, Gabrielle Fonrouge, Samantha Subin, Alex Harring, Jesse Pound, Tanaya Macheel and Spencer Kimball contributed to this report.