According to CNBC Pro analysis, several stocks in the S&P 500 often rise whenever Nvidia’s stock price falls. The U.S.-listed stocks include energy utility Xcel Energy, beverage makers Coca-Cola and Keurig Dr Pepper, food manufacturer General Mills, health care companies Solventum, Sencora, Becton Dickinson and AbbVie, and defense contractors Lockheed Martin and Northrop Grumman. CNBC Pro screened S&P 500 stocks that were inversely correlated with Nvidia during July, when Nvidia’s stock price fell 11.6%. In contrast, the stocks identified by CNBC returned 9% overall during the same month. NVDA YTD LINE Disappointing tech earnings combined with impending interest rate cuts have eroded some of the bullish sentiment toward technology and semiconductor stocks. Instead, investors have been moving into small-cap stocks recently, with the Russell 2000 Index up 10.9% in July, compared with a 1.1% rise in the S&P 500 and a 0.8% fall in the tech-heavy Nasdaq Composite Index. In the table below, a negative 1 in the correlation column means that when Nvidia’s stock price rises or falls, the stock prices of the companies listed below move in the opposite direction. A correlation of zero indicates that there is no statistical relationship between Nvidia’s stock price and the stock prices of other companies. CNBC Pro’s analysis used the Pearson correlation coefficient, the most common way to measure linear correlation between two variables, such as stock prices. CNBC’s calculation measures only the direction and magnitude of daily price changes. It does not take into account long-term returns. Correlated returns do not indicate causation or guarantee future returns or price change patterns. The table below shows the 10 S&P 500 stocks that showed the strongest inverse correlation with Nvidia’s stock price in the first week of August. Food maker General Mills was the only stock that was inversely correlated with Nvidia on a weekly and monthly basis. A number of investment banks have urged investors to buy the stock following Nvidia’s share price decline over the past few weeks. Morgan Stanley said Nvidia’s July sell-off was overdone and restored the stock to its “top pick” status in the chip industry. Meanwhile, Goldman Sachs continued to keep Nvidia on its “Convict List – Director’s Cut” in August. —CNBC’s Arjun Kharpal, Lisa Kailai Han and John Melloy contributed to this report.
