IonQ (NYSE: IONQ) stock is falling in Monday’s trading. The quantum-computing company’s share price was down 7.9% as of 3:15 p.m. ET. Meanwhile, the S&P 500 index was down 0.6%, and the Nasdaq Composite index was down 0.7%.
IonQ stock is falling today in conjunction with an uptick in focus on potential bearish catalysts for the tech industry and broader market. In addition to concerns that upcoming inflation data could come in higher than previously anticipated, China also announced that it had launched an antitrust investigation into Nvidia. But even with today’s pullback, IonQ stock is up roughly 182% this year.
On the heels of an impressive rally, stocks are taking a breather in Monday’s trading. The Bureau of Labor Statistics is scheduled to release its latest Consumer Price Index (CPI) data on Wednesday, and investors are looking to the upcoming report to provide insight on the state of inflation.
While the Federal Reserve is broadly expected to deliver another cut for interest rates this month, some investors are feeling skittish ahead of the upcoming CPI report. If the latest update shows that prices in the basket of goods included in the CPI rose more than expected, that could cause investors to become more bearish on the Fed’s timeline for rate cuts.
If that winds up being the case, it could be particularly bad news for IonQ and other stocks with growth-dependent and otherwise speculative valuations. Stocks in these categories have enjoyed strong bullish momentum amid assumptions that inflation is largely under control and that the Fed will continue cutting rates, but they could face intense bearish pressures if that winds up not being the case.
Nvidia has been this year’s hottest and most influential stock, and news for the company has often had ripple effects for other companies in the tech sector. Today, China announced that it had launched an antitrust probe into the company. Nvidia has a dominant position in the market for high-performance graphics processing units (GPUs) used to power advanced artificial intelligence (AI) applications. Access to its GPUs has become a divisive issue amid already rising tensions between the U.S. and China.
Notably, IonQ has recently been demoing technologies using Nvidia’s CUDA-Q software platform for hybrid quantum-classical computing. China’s Nvidia antitrust investigation is unlikely to have any material effect on IonQ in the near term, but geopolitical dynamics and potential regulatory issues could emerge as bearish catalysts that put significant pressure on valuations for growth-dependent tech stocks.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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