Nvidia (NVDA) stock continued to decline on Tuesday after shares fell more than 10% from their record close in November. The chip giant’s stock fell nearly 3% in early trading before bouncing off session lows.
These moves reflected declines in all three major indexes, which took a breather as investors debate what could happen to the US economy in 2025.
“This rally, which has been really dramatic since July, is starting to look a little soft,” said James Demert, chief investment officer at Main Street Research. Yahoo Finance Morning Brief.
“So, going into 2025, I think investors should start preparing themselves emotionally for a natural 8% to 12% correction in the markets,” he warned.
Demert, who said the Fed is “probably already at neutral” and likely won’t need to cut rates further from here, also touched on the market’s breadth in the new year following a rapid rise in Big Tech giants. Stocks.
According to Bank of America’s latest survey of fund managers, the Long Magnificent 7 is the busiest trade, for 57% of investors surveyed.
“It was a Mag 7 market,” Demert said. “In 2025, we think these stocks will do well, but other things will also do as well or better” amid more attractive valuations and AI-driven use cases, which are expected to fuel earnings.
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