Giant stock plunges to a 12-year low on Wall Street: What happened to the beloved company?

An extremely volatile trading day passed on Wall Street, as the main indices moved between declines and slight gains against the backdrop of two significant points of interest: the publication of inflation data in the USA and the wait for Nvidia's financial reports. Towards the end of trading, the trend reversed, the Nasdaq rose by about 0.1% and the S&P 500 index strengthened by about 0.2%, while the Dow Jones index weakened by 0.1%.

At the center of the evening is Nvidia, which published its results after the market closed. The company's stock traded in negative territory after an extraordinary streak of seven days of declines, the longest recorded since 2022. Activity in the options market indicates that investors are preparing for a sharp move of about 6% in the stock, up or down, following the publication of the data.

Earlier, trading opened with declines after the PCE index, considered the preferred inflation measure for the US Federal Reserve, rose by 0.2% in July. Preliminary forecasts pointed to a more moderate increase of 0.1%. In annual terms, inflation reached 3.7%. The core index, which does not include food and energy prices, also climbed by 0.2%, in line with estimates, and set the annual rate at 3.3%.

Following the publication, the dollar strengthened and US government bond yields rose. At the same time, the probability that investors attribute to an interest rate hike in September increased by about two percentage points and reached 40%.

Alongside Nvidia's reports, investors are also waiting for the words of Federal Reserve Chairman Kevin Warsh at the central bank's annual conference in Jackson Hole. The market hopes to get a clearer picture from him regarding the way the Fed intends to deal with high inflation, especially after the sharp rise recently recorded in bond yields.

Israel's SolarEdge stock stood out with gains after UBS bank raised its recommendation from "neutral" to "buy". The target price was updated from $36 to $42, reflecting a premium of 40.6% relative to the stock price on the Nasdaq. The bank noted that regulatory concern in the US over cyber threats in inverters connected to the grid may reduce competition and allow SolarEdge to expand market share and raise prices.

Meta also attracted attention following a report on a settlement in a lawsuit filed against it by 29 states in the US, claiming that its platforms were designed to be addictive for teenagers. According to the report, the company will be required to make changes to Facebook and Instagram, including nightly blocks for young users, improvement of age verification mechanisms, and expansion of supervision tools intended for parents.

On the other hand, Nike's stock fell to a level not seen in 12 years, after Truist Securities downgraded its recommendation from "buy" to "hold". In the background was the weak forecast published by the Dick's Sporting Goods chain, which purchases between 35% and 40% of its merchandise from Nike. Since the beginning of the year, Nike's stock has lost about 40% of its value.

In the business arena, it was also reported that Perion Network will acquire the company PRN, which operates in the field of in-store advertising, in a deal whose value may reach $12 million. At Perion, they estimate that the acquisition will contribute to profitability from the moment of its completion and will strengthen the company's activity in the retail media market.

At the same time, according to a report in Bloomberg, Anthropic signed a deal worth 45 billion shekels to purchase computing power from the Nscale data center in West Virginia. The deal, planned for a period of more than six years, is expected to be based on Nvidia's Vera Rubin chips and include the utilization of about 460 megawatts. Anthropic, the company behind the Claude model, plans according to the report to launch an IPO in mid-September and raise about $100 billion at a valuation of $2 trillion.