Dow Jones futures fell early Tuesday, along with S&P 500 futures and Nasdaq futures. Dow giants UnitedHealth Group (United nations) And Johnson & Johnson (JNJ) report early Tuesday.
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The stock market rally tried to rebound on Monday morning, but quickly turned lower in another ugly reversal. The S&P 500 and Nasdaq broke key levels. Treasury yields rose to new 2024 highs even amid uncertainty over how Israel will respond to the Iranian drone and missile attack on Saturday.
Tesla (TSLA) declined in large layoffs and a slew of other headlines, while Salesforce.com (Customer relationship management) has backed away from reports that it is in late-stage talks to buy a data management software maker Informatica (INFA).
while, Nvidia (NVDA) And Microsoft (MSFT), two giant AI leaders, fell below some key levels on Monday, though they have not yet collapsed.
Early Tuesday, Microsoft announced a major investment in G42, an Emirati company working in the field of artificial intelligence.
Nvidia stock is on IBD Leaderboard And the Bahraini dinar 50. Microsoft stock is on IBD's list of long-term leaders.
Dow jones futures today
Dow Jones futures fell 0.15% versus fair value. S&P 500 futures fell 0.2%. Nasdaq 100 futures tend to fall.
The yield on the 10-year Treasury note fell to 4.62%.
Crude oil futures rose a fraction.
China's economy grew 5.3% in the first quarter from a year earlier, better than estimates of 4.6% and up slightly from the fourth quarter's 5.2%. Meanwhile, March retail sales rose 3.1% from a year earlier, while industrial production rose 4.5%, both below expectations.
As for the US economy, investors will get March readings on housing starts and industrial production before the open.
Remember, an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Main profits
UnitedHealth, Johnson & Johnson and Morgan Stanley (Ms) report early Tuesday.
Shares of UnitedHealth and J&J are nearing 2024 lows. Morgan Stanley is between its 50- and 200-day lines after falling last week on reports that regulators are investigating its wealth management business.
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Stock market pool
Friday's selloff was a break in expectations for a stock market rally. Monday was a continuation of that, especially given the bearish reversal from the strong open.
The Nasdaq and S&P 500 closed below their 50-day line for the first time since early November, when the stock market rally was just beginning. The Nasdaq fell 1.8%, finally breaking out of its reversal day range on April 4. The S&P 500 hit resistance at its 21-day line before falling 1.2% in stock market trading on Monday.
The Dow Jones Industrial Average fell 0.7% to its lowest level since late January. Salesforce stock fell 7.3% as investors didn't like the Informatica acquisition hype. That displacement Goldman Sachs (A), which rose 2.9% on earnings.
The small-cap Russell 2000 index fell 1.4%, hitting a two-month low.
The broad market has been struggling for some time, with Nvidia, Microsoft and other leading AI companies and mega-caps supporting the Nasdaq. But with losses in the previous two sessions, these leaders are being pulled down.
The Nasdaq has now suffered three major downside setbacks in the past few weeks, starting with the March 8 tumble led by Nvidia. Overall, the market rose on lighter trading volume while distribution days increased.
US crude oil prices fell by 0.3% to $85.41 per barrel.
The 10-year Treasury yield rose 13 basis points to 4.63%, hitting new highs in 2024. Friday's safe-haven flow into Treasuries reversed on Monday as concerns in the Middle East eased, while strong retail sales led to… High returns.
The market's fear gauge is rising again
It is worth mentioning that CBOE Volatility IndexThe VIX, or VIX, jumped 11% on Monday to its highest closing level in 2024. On Friday, a gauge of market fear rose to its highest levels since late October on concerns about Iran. Concerns in the Middle East remain high while rising yields add to investor anxiety.
But the VIX does not appear to be at extreme levels that might indicate a market bottom.
However, the rising VIX, along with indicators pointing to oversold conditions in the market, is worth monitoring.
ETFs
Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) fell by 2.75%, with Microsoft and Salesforce, two IGV giants. VanEck Vectors Semiconductor ETF (Trait) 1.5% precipitation. Nvidia shares are SMH's dominant holding company.
Reflecting more speculative stocks, the ARK Innovation ETF (Ark(4.6% sold and ARK Genomics ETF)Arkj) 3.8%. Tesla stock is a prime holding across Ark Invest's ETFs.
SPDR S&P Metals and Mining Fund (XME) decreased by 0.2%. SPDR S&P Homebuilders ETF (XHB) Step down by 1.3%. Energy Select SPDR ETF (XLE(Down by 0.9% and the Healthcare Sector SPDR Fund)Forty-fifth) decreased by 0.2%.
Selected Industrial Sector SPDR Fund (forty-first) decreased by 0.7%. Financial Select SPDR ETF (XLF) fell 0.5%, with Goldman as a lead member.
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Nvidia stock
Nvidia stock fell 2.5% to 860.01 after hitting 906.13 Monday morning. The AI chipset leader fell below the 21-day line and is once again testing the 10-week line. NVDA stock has a flat-based buy point of 974.
Nvidia chipset maker Taiwan Semiconductor Co., Ltd (TSM) reports early Thursday.
Microsoft shares
Microsoft stock fell 2% to 413.65, surpassing its previous buy point of 420.82 and closing below its 50-day line for the first time since October 6.
MSFT stock has a three-week tight pattern with an entry at 429.37, which will remain relatively close to the 50-day level. It's possible that tech giant Dow is working on a new flat base.
Microsoft's third-quarter fiscal 2024 earnings are scheduled to return on April 25.
Early Tuesday, Microsoft said it would invest $1.5 billion in the G42 group, which recently committed to scaling back its ties with China.
Tesla stumbles into 'another bad day'
Tesla announced that it will cut more than 10% of its global workforce, which will amount to more than 14,000 jobs. This comes after stunningly weak deliveries in the first quarter, with first-quarter earnings expected on April 23.
Tesla also reduced discounts on Model Y inventory in the United States, despite rising inventories.
These moves could support profits and margins, but also indicate the potential for further production cuts.
Several senior Tesla executives resigned from key projects or were laid off, a bad sign for these efforts.
Electrek reported Monday that the next generation of electric vehicles has been put on the back burner. This largely confirms a Reuters report two weeks ago, despite Musk's vague denials.
Cybertruck deliveries have also reportedly been halted in recent days.
Monday was “another dark day” for Tesla, according to Wedbush analyst Dan Ives, a longtime TSLA supporter.
This slew of bad news and uncertainty raises the stakes for the first-quarter earnings report on April 23 and the conference call that will follow.
“The Street wants and needs answers next week on Tesla's first-quarter conference call,” Ives stressed in a note Monday.
Tesla stock fell 5.6% on Monday to 161.48, near an 11-month low of 160.51.
What are you doing now
The stock market entered the week with an “uptrend under pressure.” Monday's move certainly didn't help.
Investors should reduce exposure.
Also, earnings season will ramp up, hitting full steam next week, creating a great deal of uncertainty.
But stay involved and keep your watchlists updated.
Plenty of stocks have new rules or are in the works, though most have suffered setbacks recently. Focus on those who are holding key levels and showing relative strength. If the market regains momentum soon, these could be the stocks that lead the way.
Read The Big Picture every day to stay on top of the 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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