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Investing.com -- Tech stocks faced pressure Friday following President Donald Trump’s Truth Social post threatening higher tariffs on China and potentially canceling a planned meeting with President Xi Jinping.
According to Wedbush tech analyst Dan Ives, the market reaction stems from China’s announcement about tightening restrictions on rare earth materials effective December 1.
"After a relatively calm few months and improving relations between the US and China this step up in tensions has created a white knuckle moment for the markets with tech stocks under major pressure today," Ives noted.
The analyst characterized the situation as "a game of high stakes poker" between the US and China amid the ongoing AI revolution, with Beijing also increasing scrutiny of NVIDIA’s advanced chips.
Ives maintained his bullish stance on tech stocks despite the sell-off, suggesting that "the bark will likely be worse than bite this time around as cooler heads prevail." He views such market reactions as buying opportunities for semiconductor, software, and Big Tech companies.
The analyst highlighted several companies leading what he called the "4th Industrial Revolution," including NVIDIA, Microsoft, Palantir (which he dubbed "the Messi of AI"), Meta, Alphabet, and Amazon.
Ives predicted tech stocks could rise another 7% or more by year-end, describing the current market as a "1996 Moment...and NOT a 1999 Moment." He also pointed to OpenAI’s recent investments in NVIDIA and AMD as evidence of ongoing capacity expansion and enterprise demand.
"Sell-offs like today we encourage investors to buy the tech winners and not head for elevators despite this war of words between Trump and Xi," Ives concluded.