• Economic data sent stocks plunging. Major indexes closed firmly lower on Tuesday as new economic data poured in and Nvidia retraced from its record close. The S&P fell over 1.1%, the NASDAQ dropped about 1.9%, and the Dow Jones ended down roughly 0.4%. The 10-year Treasury yield gained about 7 basis points to hover just below 4.7%. 
• Fresh economic data. The Institute for Supply Management's manufacturing PMI indicated the manufacturing sector continued to expand last month. The prices paid index jumped to a nearly two-year high of 64.4, up from the prior 58.2. The jump in prices "is a worry for the Fed," Capital Economics North America economist Thomas Ryan wrote. Bets on when the Federal Reserve will next cut interest rates have been pushed back. "This serves as a good reminder that the Fed's fight against inflation is not over, particularly going into a year where tariffs and immigration curbs are set to reignite price pressures," added Ryan. 
• Fresh job data. The JOLTS job openings rose more than expected during the month of November. The hiring rate fell to 3.3% from the 3.4% seen in October. Also in Tuesday's report, the quits rate, a sign of confidence among workers, fell to 1.9% from 2.1% in October. Oxford Economics lead US economist Nancy Vanden Houten described Tuesday's release as consistent with a "no hire, no fire" labor market.
• More big jobs data on deck for Friday. Investors will have their eyes this week on Friday's December jobs report. Anticipation is building that central bank will keep interest rates unchanged later this month, according to the CME FedWatch tool. Traders are also placing a less than 50% chance the central bank cuts rates ahead of its June meeting.
• Trump backs away from aggressive tariff plan. The US dollar pushed higher on Tuesday, rebounding after the currency was on track for a one-week low following reports that President-elect Donald Trump won't commit to an aggressive tariff plan. Trump has also announced a new multibillion-dollar foreign investment to build new data centers across the United States.
• Nvidia saw a big pull back. Nvidia shares reversed gains to fall over 6% after hitting a record close on Monday. The chip maker was the Dow's worst performer of the session. Nvidia CEO Jensen Huang's CES keynote on Monday revealed a new AI superchip.
• Meta stock suffered after Zuckerberg move. Meta stock fell nearly 2% after CEO Mark Zuckerberg announced an end to the company's third-party fact-checking program.
• Palantir got an "underweight" rating. Shares of AI software firm Palantir Technologies fell more than 6% after Morgan Stanley reinstated coverage of the company with an Underweight rating.
• Feds lost its top banking cop. There was a surprise departure of Federal Reserve vice chair for supervision Michael Barr. Michelle Bowman has been named by analysts as the person most likely to become the Fed’s new top banking cop.
• Bitcoin dropped below $100K. The digital coin dropped below the critical $100,000 mark on Tuesday. Better than anticipated economic data sparked fears of an inflation resurgence.
• Bird flu sent vaccine makers higher. Vaccine makers such as Moderna rose Tuesday following the first reported bird flu death in the US as well as an uptick in COVID-19 cases, per CDC data.

• Tesla (TSLA)
• Lucid Group (LCID)
• Plug Power (PLUG)
• Aurora Innovations (AUR)
• Palantir Technologies (PLTR)
• Moderna (MRNA)
• Inari Medical (NARI)
• SoundHound AI (SOUN)
• MicroStrategy (MSTR)
• Enovix Corp. (ENVX)

Weekly Notables

Amazon's AWS is Investing $11B into This

Amazon.com said on Tuesday that its cloud computing division, Amazon Web Services (AWS), plans to invest about $11 billion to expand its infrastructure in Georgia to support cloud computing and AI technologies. It was last week that Microsoft also announced plans to invest about $80 billion in fiscal 2025 to develop data centers for training AI models and deploying AI and cloud-based applications.

Analyst Warns Palantir Could Drop and Issues Underweight Rating

Shares of data-analytics firm Palantir Technologies now have an Underweight rating from Morgan Stanley analyst Sanjit Singh, and a $60 target price. Palantir stock was one of 2024's artificial intelligence plays.

"While acknowledging strong execution and momentum, we see success more than priced in at the current multiple premium," said analyst Sanjit Singh. "2025 revenue estimates are only 10% higher compared to the beginning of 2024," Singh added. "More surprising, even underneath the narrow estimate revisions, the commercial business – where most of the AI narrative is supposed to play out — has contributed less to the 2025 revenue estimate revisions than the government business."