Dow Jones Futures: S&P 500 has worst week in year as Nvidia, Super Micro plunge; Tesla looms

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures, after a tough market week. Income out Microsoft (MSFT), Metaplatforms (META), Tesla and many more are on deck.

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The stock market suffered heavy losses last week. The Dow Jones even rose a fraction. But the S&P 500 and Nasdaq composite plunged below their respective 50-day moving averages for their worst week in more than a year.

Above all, the leading stocks were the biggest losers. Nvidia (NVDA), the ultimate AI stock and company, dipped under key support.

Chip and AI stocks sold off after cautious comments from ASML (ASML) And Taiwanese semiconductor manufacturing (TSM).

AI server maker Super microcomputer (SMCI) crashed the following Friday not releasing preliminary results, raising fears about demand for AI in general.

The market environment is definitely weak. Investors should be largely in cash, waiting for renewed signs of strength in the major indices and leading stocks.

Important profits in prospect

Microsoft, Meta Platforms, Google parent company Alphabet (GOOGL) And Tesla (TSLA) headline a huge week of earnings. General Electric (GE), Service now (NOW), Chipotle Mexican Grill (CMG), Dexcom (DXCM) And Caterpillar (CAT) are among the many other notable reports available.

Google stock is in a buy zone. Meta stocks, Chipotle and Caterpillar could settle, while Dexcom has retreated slightly below a buy point. GE is expanding massively while Microsoft and ServiceNow are starting to crack. Shares of Tesla have fallen to a 52-week low amid a slew of bad news.

These reports and guidelines will have a huge impact on their industries and the overall market. Microsoft, Google, Meta and ServiceNow will provide insights into artificial intelligence, as well as cloud computing, online advertising and enterprise software.

For Tesla, there are big questions about the EV giant’s growth strategy. Above all, is Elon Musk planning a next-generation Model 2? On Saturday, Tesla cut prices for Model Y, S and

Meta inventory is enabled IBD rankings. Microsoft stock is on the IBD Long-Term Leaders list. Meta, DexCom and Google stocks are on the list IBD50. Meta Platforms, Google and ServiceNow shares are on the market IBD Bigcap 20.

Dow Jones futures today

Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.

Join IBD experts as they analyze leading stocks and the market on IBD Live

The stock market is suffering big losses

The stock market has suffered heavy losses over the past week, especially the Nasdaq and leading emerging markets.

The Dow Jones Industrial Average rose 0.01% in stock market trading last week. The S&P 500 index fell 3.05%, its biggest weekly drop since March 2023. The Nasdaq index fell 5.5%, its worst week since November 2022. The small-cap Russell 2000 lost 2.8% .

The market’s power trend, in place since November, is over as the Nasdaq’s 21-day exponential moving average crosses below the 50-day line.

Some stocks are holding support, and a few are making encouraging moves. But overall, leading stocks look damaged or broken.

AI and chip stocks held up quite well. But last week they were the frontrunners, with Nvidia and especially Super Micro plummeting on Friday.

The CBOE Volatility Index, or VIX, briefly spiked Friday to the highest level of market fear since late October. Meanwhile, several indicators point to the market being significantly oversold. But it has been oversold for a while.

Ten-year Treasury yields rose 11 basis points to 4.61%, hitting a five-month intraday high of nearly 4.7% on Tuesday.

US crude futures fell 2.9% this week to $83.14 per barrel.

Tesla collapses with one big question before the earnings call

ETFs

Of the growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell by 5.1%. Microsoft is a huge IGV holding, of which ServiceNow stock is a major component. The VanEck Vectors Semiconductor ETF (SMH) plunged 9.7%. Nvidia stock is No. 1 in SMH, with key members from Taiwan Semi and ASML.

SPDR S&P Metals & Mining ETF (XME) fell 0.8% last week. The Global X US Infrastructure Development ETF (PAVE) retreated 2.8%. US Global Jets ETF (JETS) rose by 4.7%. The SPDR S&P Homebuilders ETF (XHB) slipped 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) lost 2%, with Caterpillar and GE stock the two largest holdings.

The Financial Select SPDR ETF (XLF) advanced 0.85% and the SPDR S&P Regional Banking ETF (KRE) rose by 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 makes up a huge holding in Ark Invest’s ETFs.

Time the market with IBD’s ETF market strategy

AI hardware stocks are plummeting

AI chip and hardware stocks, the driving force behind the market rally from late October to early March, were the big losers last week.

ASML fell 10.6% this week due to weak sales and expectations in the first quarter. This has also dragged other manufacturers of chip equipment along with it.

Shares of Taiwan Semiconductor fell 10.4% despite disappointing expectations and a rise fueled by demand for AI chips. But the foundry giant was cautious about demand for chips in general.

Nvidia plunged 13.6%, including Friday’s 10% plunge to break the 50-day mark. It has now given up more than two-thirds of its profits after fiscal Q1 earnings on February 21.

Arm positions (ARM) crashed 31% for the week

SMCI shares fell 20.6% this week, even with Tuesday’s peak of 10.6%. Shares fell 23.1% on Friday, literally because there was no news. Disappointing investors was that Super Micro didn’t report preliminary results when the AI ​​server maker announced its upcoming first-quarter earnings date. That may also have raised concerns about the demand for AI chips.

All these stocks gave sell signals.

SMCI and Nvidia are the S&P 500’s two biggest gainers in 2024, but were the S&P 500’s biggest losers on Friday.

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What to do now

The stock market is in bad shape. The major indexes are all well below their 50-day moving averages. Nvidia and other tech bigwigs are no longer resisting sales and are instead starting to lead the way.

Now is not the time to buy stocks. Investors should have limited to modest exposure, with winners generally retaining only a significant cushion.

This is a time to create watchlists. 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, Glaukos (GKOS), Martijn Marietta (MLM) And All states (ALL).

Remember, resilient stocks in a downtrend today may not remain that way tomorrow, as Nvidia, Super Micro, and ServiceNow have shown.

And relative winners can be absolute losers.

Earnings season could be a positive catalyst for stocks. But as investors have seen in the past week, they can lead to new selling.

Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.

Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.

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