Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures, following a difficult market week. Earnings from Microsoft (MSFT), Meta Platforms (META), Tesla and plenty of more are on deck.
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The stock market suffered sharp losses up to now week. The Dow Jones actually rose a fraction. Nonetheless the S&P 500 and Nasdaq composite plunged below their respective 50-day moving averages, suffering their worst week in greater than a yr.
Most of all, leading stocks were a very powerful losers. Nvidia (NVDA), the ultimate word word AI stock and company, dived below key support.
Chip and AI stocks sold off on cautious comments from ASML (ASML) and Taiwan Semiconductor Manufacturing (TSM).
AI server maker Super Micro Computer (SMCI) crashed Friday after not releasing preliminary results, raising fears about AI demand overall.
The market environment is decidedly weak. Investors should be largely in money, waiting for renewed signs of strength contained in the foremost indexes and leading stocks.
Key Earnings Ahead
Microsoft, Meta Platforms, Google parent Alphabet (GOOGL) and Tesla (TSLA) headline an infinite week of earnings. General Electric (GE), ServiceNow (NOW), Chipotle Mexican Grill (CMG), Dexcom (DXCM) and Caterpillar (CAT) are amongst the various other notable reports on tap.
Google stock is in a buy zone. Meta stock, Chipotle and Caterpillar could possibly be organising, while Dexcom has retreated barely below a buy point. GE is greatly prolonged while Microsoft and ServiceNow are starting to crack. Tesla stock has plunged to 52-week lows amid a bunch of bad news.
These reports and guidance could have an unlimited effect on their sectors and overall market. Microsoft, Google, Meta and ServiceNow will offer insights into artificial intelligence, along with cloud computing, web promoting and business software.
For Tesla, there are huge questions regarding the EV giant’s growth strategy. Most of all, is Elon Musk shelving a next-generation Model 2? On Saturday, Tesla cut Model Y, S and X prices throughout the U.S. by $2,000, after raising Model Y prices by $1,000 on April 1.
Meta stock is on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Meta, DexCom and Google stock are on the IBD 50. Meta Platforms, Google and ServiceNow stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Be mindful that overnight motion in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the following regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Suffers Big Losses
The stock market suffered heavy losses this past week, especially the Nasdaq and leading growth plays.
The Dow Jones Industrial Average edged up 0.01% in last week’s stock market trading. The S&P 500 index tumbled 3.05%, its biggest weekly decline since March 2023. The Nasdaq composite plunged 5.5%, its worst week since November 2022. The small-cap Russell 2000 gave up 2.8%.
The market’s power trend, in force since November, is over since the Nasdaq’s 21-day exponential moving average undercut the 50-day line.
Some stocks are holding support, with just just just a number of making encouraging moves. But generally leading stocks are looking damaged or broken.
AI and chip stocks had been holding up reasonably well. But they led the downside this past week, with Nvidia and particularly Super Micro plunging on Friday.
The CBOE Volatility index, or VIX, briefly spiked Friday to the market fear gauge’s highest levels since late October. Meanwhile, various indicators suggest the market is significantly oversold. Nevertheless it’s been oversold for some time.
The ten-year Treasury yield jumped 11 basis points to 4.61%, hitting a five-month intraday high of nearly 4.7% on Tuesday.
U.S. crude oil futures fell 2.9% to $83.14 a barrel for the week.
Tesla Plunges With One Big Query For The Earnings Call
ETFs
Amongst growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) plunged 5.1%. Microsoft is an unlimited IGV holding, with ServiceNow stock a key component. The VanEck Vectors Semiconductor ETF (SMH) dived 9.7%. Nvidia stock is the No. 1 holding in SMH, with Taiwan Semi and ASML key members.
SPDR S&P Metals & Mining ETF (XME) dipped 0.8% last week. The Global X U.S. Infrastructure Development ETF (PAVE) retreated 2.8%. U.S. Global Jets ETF (JETS) jumped 4.7%. The SPDR S&P Homebuilders ETF (XHB) skidded 3.9%.
The Energy Select SPDR ETF (XLE) fell 1.25% and the Health Care Select Sector SPDR Fund (XLV) closed fractionally higher. The Industrial Select Sector SPDR Fund (XLI) gave up 2%, with Caterpillar and GE stock probably the most effective two holdings.
The Financial Select SPDR ETF (XLF) advanced 0.85% and the SPDR S&P Regional Banking ETF (KRE) climbed 1.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sold off 9.6% last week and ARK Genomics ETF (ARKG) 10%. Tesla stock is an unlimited holding across Ark Invest’s ETFs.
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AI Hardware Stocks Plunge
AI chip and hardware stocks, the driving force of the market rally from late October to early March, were the large losers last week.
ASML plunged 10.6% for the week on weak Q1 sales and guidance. That also dragged down other chip-equipment makers.
Taiwan Semiconductor stock dived 10.4% despite beating views and guiding higher, fueled by AI chip demand. Nonetheless the foundry giant was cautious about demand for chips overall.
Nvidia tumbled 13.6%, including Friday’s 10% dive to knife through the 50-day. It’s now given up over two-thirds of its gains following the fiscal Q1 earnings on Feb. 21.
Arm Holdings (ARM) crashed 31% for the week
SMCI stock dived 20.6% for the week even with Tuesday’s 10.6% spike. Shares dived 23.1% on Friday, literally on no news. Disappointing investors, Super Micro didn’t give preliminary results since the AI server maker announced its upcoming Q1 earnings date. Which can have also raised concerns about AI chip demand.
All of those stocks flashed sell signals.
SMCI and Nvidia are the two biggest winners on the S&P 500 in 2024, but they were the S&P 500’s biggest losers Friday.
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What To Do Now
The stock market is in bad shape. A very powerful indexes are all well below their 50-day moving averages. Nvidia and other tech standouts won’t be any longer resisting the selling but as a substitute beginning to steer the slide.
It’s just not a time to be buying stocks. Investors might wish to have slim-to-modest exposure, generally only keeping winners with a hefty cushion.
This is usually a time to construct watchlists. It’s best to search for stocks finding support and showing relative strength.
There are some names holding up, including GE, Google, Meta, Chipotle, Glaukos (GKOS), Martin Marietta (MLM) and Allstate (ALL).
Be mindful that in a downtrend, resilient stocks today may not stay that way tomorrow, as Nvidia, Super Micro and ServiceNow showed.
And relative winners may thoroughly be absolute losers.
Earnings season could provide a positive catalyst for stocks. But, as investors saw this past week, they may trigger fresh selling.
Read The Big Picture on every day basis to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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