Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures, after a tough week in the market. Profits from Microsoft (MSFT), Meta platforms (dead) and many more on deck. Tesla, announced on Tuesday, reduced prices for electric vehicles and FSD over the weekend.
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The stock market suffered severe losses last week. In fact, the Dow Jones rose slightly. But the S&P 500 and Nasdaq fell below their 50-day moving averages, suffering their worst week in more than a year.
Most important of all, blue-chip stocks were the biggest losers. Nvidia (NVDA), the stock and ultimate artificial intelligence company fell below a key support level.
Chip and AI shares were sold off amid dovish comments from ASML (ASML) And Taiwan Semiconductor Manufacturing Co., Ltd (TSM).
Artificial intelligence server maker Super micro computer (SMCI) crashed on Friday after no Initial results released, raising concerns about demand for AI in general.
The market environment is definitely weak. Investors should largely have cash on hand, waiting for renewed signs of strength in major indices and blue-chip stocks.
Next major earnings
Microsoft, Meta platforms, Google parent the alphabet (Google) And Tesla (TSLA) headline a huge week of earnings. General Electric (General Electric), Service now (now), Chipotle Mexican Grill (CMG), Discom (DXCM) And Larva (cat) among many other notable reports available.
Google stock is in a buy zone. Shares of Meta, Chipotle and Caterpillar could be setting up, while Dexcom has fallen slightly below a buy point. GE has stretched considerably while Microsoft and ServiceNow are beginning to unravel. Tesla stock fell to 52-week lows amid a batch of bad news.
These reports and guidance will have a significant impact on their sectors and the market in general. Microsoft, Google, Meta, and SpaceNow will provide insights into artificial intelligence, as well as cloud computing, online advertising, and business software.
For Tesla, there are big questions regarding the electric car giant's growth strategy. And most important of all, is Elon Musk shelving the next-gen Model 2?
On Saturday, Tesla reduced the prices of the Model Y, S and
On Sunday, Tesla reduced the prices of the Model 3 and Y in China by nearly $2,000, while cutting the prices of the Model S and Tesla also reduced Model 3 prices in major European markets by about $2,100 to $3,200.
Meta stock is running IBD Leaderboard. Microsoft stock is on IBD's list of long-term leaders. Meta, DexCom and Google stocks are on Bahraini dinar 50. Meta, Google, and ServiceNow platforms are available at IBD Big Cap 20.
Dow jones futures today
Dow Jones futures open at 6pm EST, along with S&P 500 futures and Nasdaq 100 futures.
Remember, an overnight move in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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The stock market suffers huge losses
The stock market suffered huge losses last week, especially the Nasdaq and leading growth indices.
The Dow Jones Industrial Average rose 0.01% in stock market trading last week. The S&P 500 fell 3.05%, its biggest weekly decline since March 2023. The Nasdaq Composite fell 5.5%, its worst week since November 2022. The Russell 2000 small-cap index gave up 2.8%.
The market's strength trend, which had been in effect since November, came to an end as the Nasdaq's 21-day exponential moving average undermined its 50-day line.
Some stocks hold support, with a few making encouraging moves. But blue chips generally look damaged or broken.
AI and chip stocks have been holding up reasonably well. But they led the downside last week, with Nvidia and especially Super Micro falling on Friday.
the CBOE Volatility IndexThe VIX, or VIX, briefly rose on Friday to the highest levels of the market's fear gauge since late October. At the same time, many indicators indicate that the market is noticeably oversold. But it was oversold for some time.
The 10-year Treasury yield jumped 11 basis points to 4.61%, hitting a five-month high of nearly 4.7% on Tuesday. Markets now expect just one Fed rate cut in 2024.
US crude oil futures fell 2.9% to $83.14 per barrel during the week.
Tesla is flooded with a big question on its earnings call
ETFs
Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) decreased by 5.1%. Microsoft is one of the IGV's massive holding companies, and ServiceNow stock is a major component. VanEck Vectors Semiconductor ETF (Trait) decreased by 9.7%. Nvidia stock is the No. 1 stock in SMH, with major members Taiwan Semi and ASML.
SPDR S&P Metals and Mining Fund (XME) fell 0.8% last week. Global X US Infrastructure Development Foundation (ETF)cradle) decreased by 2.8%. US Global Jets ETF (Planes) jumped 4.7%. SPDR S&P Homebuilders ETF (XHB) slid 3.9%.
Energy Select SPDR ETF (XLE(Depreciated by 1.25% and Healthcare Sector SPDR Fund)Forty-fifth) closed slightly higher. Selected Industrial Sector SPDR Fund (forty-first) gave up 2%, with Caterpillar and GE shares the top two shares.
Financial Select SPDR ETF (XLF) Advance 0.85% SPDR S&P Regional Banking Fund (ETF)Cree) rose 1.8%.
Reflecting more speculative stocks, the ARK Innovation ETF (Ark) sold off 9.6% last week and the ARK Genomics ETF (Arkj) 10%. Tesla stock is a huge holding across Ark Invest's ETFs.
Time the market with IBD's ETF market strategy
Artificial intelligence hardware stocks decline
Artificial intelligence chips and devices stocks, the driving force of the market's rally from late October to early March, were the biggest losers last week.
ASML stock fell 10.6% over the week on weak sales and guidance in the first quarter. This has also caused other chip equipment manufacturers to decline.
Taiwan Semiconductor shares fell 10.4% despite beating views and trending higher, supported by demand for artificial intelligence chips. But the foundry giant was cautious about demand for chips overall.
Nvidia stock fell 13.6%, including Friday's 10% decline in 50 days. It has now given up more than two-thirds of its gains after fiscal first-quarter earnings on February 21.
Holding arm (arm) crashed 31% for the week
SMCI stock is down 20.6% for the week even with Tuesday's 10.6% rise. Shares fell 23.1% on Friday, due to the lack of actual news. Much to the disappointment of investors, Super Micro did not report preliminary results as the AI server maker announced its next Q1 earnings date. This may also have raised concerns about demand for AI chips.
All these stocks are flashing sell signals.
SMCI and Nvidia are the S&P 500's biggest winners in 2024, but they were the S&P 500's biggest losers on Friday.
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What are you doing now
The stock market is in bad shape. All major indices are well below their 50-day moving averages. Nvidia and other leading technology companies are no longer resisting selling, but are instead starting to lead the segment.
This is not a good time to buy stocks. Investors must have small to modest exposure, and generally only hold winners with a huge cushion.
This is a good time to build watch lists. You want to look for stocks that are finding support and showing relative strength.
There are some names that are holding up, including GE, Google, Meta, Chipotle, Glaucus (Gecos), Martin Marietta (MLM) And Allstate (everyone).
Remember, in a downtrend, stocks that are resilient today may not remain that way tomorrow, as Nvidia, Super Micro, and ServiceNow have shown.
And relative winners can be total losers.
Earnings season can provide a positive catalyst for stocks. But, as investors saw last week, that could lead to new selling.
Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.
Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.
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