After a tough market week, Dow Jones futures will begin trading Sunday night, along with S&P 500 futures and Nasdaq futures.revenue from microsoft (MSFT), meta platform (META) and many others are on the deck. Tesla lowered its EV and FSD prices over the weekend, according to a report on Tuesday.
X
The stock market has suffered a significant decline over the past week. In fact, the Dow Jones rose only slightly. However, the S&P 500 and Nasdaq Composite fell below their respective 50-day moving averages, marking their worst week in more than a year.
Above all, major stocks experienced the biggest decline. Nvidia (NVDA), the ultimate AI stock and company, fell below major support.
Semiconductor and AI stocks sold off following cautious government comments. ASML (ASML) and taiwan semiconductor manufacturing (TSM).
AI server manufacturer super microcomputer (SMCI) crashed on Friday do not have The company announced preliminary results, raising concerns about overall AI demand.
Market conditions are clearly weak. Investors will likely be sitting mostly in cash, waiting for signs of strength to return to major indexes and stocks.
Significant future earnings
Microsoft, Metaplatform, Google’s parent company alphabet (GOOGL) and tesla (TSLA) made huge gains this week. general electric (GE), ServiceNow (now), Chipotle Mexican Grill (CMG), dexcom (DXCM) and caterpillar (CAT) is one of many other notable reports.
Google stock is in a buy zone. While Meta stock, Chipotle, and Caterpillar could move higher, Dexcom is retreating just below its buy point. GE is expanding significantly, but Microsoft and ServiceNow are starting to show rifts. Tesla stock fell to a 52-week low after a lot of bad news.
These reports and guidance will have a significant impact on the sector and the market as a whole. Microsoft, Google, Meta, and ServiceNow provide insights into artificial intelligence, cloud computing, online advertising, and business software.
For Tesla, there are big questions regarding the EV giant’s growth strategy. Most of all, is Elon Musk shelving the next-generation Model 2?
On Saturday, Tesla cut the price of its Model Y, S, and
Tesla on Sunday cut the Chinese prices of its Model 3 and Model Y by nearly $2,000, and slashed the prices of its Model S and Model X by up to 22%. Tesla also lowered the price of the Model 3 by about $2,100 to $3,200 in key European markets.
Meta stocks are listed on the IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders List. Meta, DexCom, and Google stocks are included in the IBD 50. Shares of Meta Platforms, Google and ServiceNow are included in the IBD Big Cap 20.
Dow Jones futures today
Dow Jones futures will open at 6pm ET, along with S&P 500 futures and Nasdaq 100 futures.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
Stock market suffers huge losses
The stock market suffered heavy losses last week, especially on the Nasdaq and major growth stocks.
In last week’s stock market trading, the Dow Jones Industrial Average rose 0.01%. The S&P 500 index fell 3.05%, its biggest weekly decline since March 2023. The Nasdaq Composite Index fell 5.5%, its worst week since November 2022. The small-cap Russell 2000 fell 2.8%.
The NASDAQ’s 21-day exponential moving average has fallen below its 50-day line, ending the market’s power trend that has continued since November.
Some stocks are holding support and some are showing positive movement. But in general, leading stocks appear to be damaged or broken.
AI stocks and chip stocks were performing reasonably well. However, Nvidia, and Supermicro in particular, fell sharply on Friday and led the decline last week.
The CBOE Volatility Index (VIX) briefly surged on Friday to the market’s fear gauge’s highest level since late October. Meanwhile, various indicators suggest that the market is significantly oversold. But it was oversold for a while.
The yield on the 10-year U.S. Treasury rose 11 basis points to 4.61%, hitting a five-month high of nearly 4.7% on Tuesday. The market currently expects the Fed to cut interest rates only once in 2024.
US crude oil futures fell 2.9% for the week to $83.14 per barrel.
Tesla plummets due to one big question in earnings release
ETF
Among growth stock ETFs, the iShares Expanded Technology Software Sector ETF (IGV) fell 5.1%. Microsoft is a huge IGV holding, with ServiceNow stock being a major component. The VanEck Vector Semiconductor ETF (SMH) plunged 9.7%. Nvidia stock is his No. 1 holding in SMH, with Taiwan Semi and ASML as key members.
SPDR S&P Metals Mining ETF (XME) fell 0.8% last week. The Global XUS Infrastructure Development ETF (PAVE) fell 2.8%. The US Global Jets ETF (JETS) rose 4.7%. The SPDR S&P Home Builders ETF (XHB) fell 3.9%.
The Energy Select SPDR ETF (XLE) fell 1.25% and the Healthcare Select Sector SPDR Fund (XLV) closed slightly higher. The Industrial Select Sector SPDR Fund (XLI) gave up 2%, with Caterpillar stock and GE stock becoming its top two holdings.
Financial Select SPDR ETF (XLF) rose 0.85% and SPDR S&P Regional Banking ETF (KRE) rose 1.8%.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) fell 9.6% and the ARK Genomics ETF (ARKG) fell 10% last week. Tesla stock is a huge holding across Ark Invest’s ETFs.
Timing the Market with IBD’s ETF Market Strategy
AI hardware stocks plummet
AI chip and hardware stocks, which were the driving force behind the market’s rally from late October to early March, fell sharply last week.
ASML fell 10.6% for the week following weak first-quarter sales and guidance. This hindered other chip equipment manufacturers.
Taiwan Semiconductor’s stock price fell 10.4%, even as demand for AI chips drove the rally higher than the view. However, the foundry giant was cautious about overall chip demand.
Nvidia is down 13.6% in 50 days, including a 10% plunge on Friday. Following its first quarter results on February 21st, the company has now given up more than two-thirds of its profits.
arm holdings (ARM) plunged 31% in a week.
SMCI stock has plunged 20.6% this week despite surging 10.6% on Tuesday. With literally no news, the stock price plummeted 23.1% on Friday. To the disappointment of investors, AI server maker Super Micro did not release preliminary results despite announcing its upcoming first-quarter earnings date. This may also have raised concerns about demand for AI chips.
All of these stocks issued sell signals.
SMCI and Nvidia, two of the S&P 500’s biggest winners in 2024, became the S&P 500’s biggest losers on Friday.
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what to do now
The stock market is in bad shape. All major indexes are well below their 50-day moving averages. Nvidia and other tech companies are no longer resisting the sell-off, but are instead starting to lead the decline.
This is not the time to buy stocks. Investors should have small to moderate exposure and usually just keep winners on a heavy cushion.
Now is the time to create a watchlist. You want to look for stocks that are finding support and showing relative strength.
Several names are favored, including GE, Google, Meta, and Chipotle. glaucus (GKOS), martin marietta (MLM) and allstate (all).
As Nvidia, Super Micro, and ServiceNow have shown, in a downtrend, remember that a stock that’s resilient today doesn’t necessarily mean it’ll stay that way tomorrow.
And relative winners can become absolute losers.
Earnings season can be a positive trigger for stock prices. But it could trigger another selloff, as investors saw last week.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
Follow Ed Carson’s thread @edcarson1971 and X/Twitter. @IBD_ECarson The latest information on the stock market, etc.
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