Wall Street ends down as Nvidia slides and private equity stocks sink

NEW YORK - Wall Street ended lower on Feb 19, with losses in private equity companies and weakness in Walmart and Apple, while earnings-driven gains in industrials limited losses.

Private equity companies slid after Blue Owl Capital’s decision to sell US$1.4 billion (S$1.7 billion) in assets and freeze redemptions at one of its funds to manage debt and return capital.

Apollo Global Management, Ares, KKR & Co and Carlyle Group all fell between 1.9 per cent and 5.2 per cent as Blue Owl’s troubles added to recent worries about credit quality and lenders’ exposure to software stocks. Blue Owl tumbled 6 per cent.

Apple dipped 1.4 per cent, weighing more than any other stock on the S&P 500.

Walmart dipped 1.4 per cent after new chief executive officer John Furner kicked off his tenure with a conservative fiscal 2027 forecast, as well as a US$30 billion buyback plan.

AI-linked technology stocks have faced turbulence in recent months due to concerns about high valuations and limited evidence that massive investments in AI are driving revenue and profit growth.

Industries ranging from software to logistics have also been hit by concerns that rapidly improving AI tools could disrupt their business models and steepen competition.

“The market is trying to grapple with what business lines are under threat in a material way from AI. This technology is developing extraordinarily rapidly and days like today feel natural. We’re at a moment in the cycle where you realise that not everyone’s going to win and not all expectations are going to be met,” said Mr Keith Buchanan, senior portfolio manager at GLOBALT Investments in Atlanta.

Deere & Co jumped 11.6 per cent after the farm-machinery maker raised its annual profit forecast and beat first-quarter results estimates.

The S&P 500 declined 0.28 per cent to end the session at 6,861.89 points.

The Nasdaq declined 0.31 per cent to 22,682.73 points, while the Dow Jones Industrial Average declined 0.54 per cent to 49,395.16 points.

The S&P 500 energy index added 0.6 per cent as crude oil prices rose on mounting fears of a military conflict between the United States and Iran.

The S&P 500 financial index declined 0.9 per cent.

Omnicom jumped 15 per cent after the ad giant beat analysts’ estimates for fourth-quarter revenue, while Carvana dropped almost 8 per cent after the online used-car retailer missed fourth-quarter profit estimates.

Software provider EPAM Systems plunged 17 per cent as its cautious first-quarter outlook disappointed investors.

Minutes from the US Federal Reserve’s most recent policy meeting released on Feb 18 showed policymakers remained split about the policy path later this year.

Investors were assessing Feb 19’s weekly jobless claims data that pointed to a stabilising labour market, and will closely parse the Personal Consumption Expenditures report - the Fed’s preferred inflation gauge - which is due on Feb 20, for hints on the Fed’s rate outlook.

Interest-rate trades suggest a 50 per cent likelihood the Fed will cut rates by its June policy meeting, according to CME’s FedWatch Tool.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.5-to-one ratio.

The S&P 500 posted 27 new highs and 6 new lows; the Nasdaq recorded 62 new highs and 146 new lows.

Volume on US exchanges was relatively light, with 16.4 billion shares traded, compared with an average of 20.5 billion shares over the previous 20 sessions. REUTERS