Dow Jones futures rose slightly last night, along with S&P 500 futures and Nasdaq futures. Nvidia chip manufacturer taiwan semiconductor (TSM) released a report early Thursday that has huge implications for the chip sector.
X
The stock market rally started with a slight uptick, but quickly headed back down, with the Nasdaq leading the pullback.
Chip stocks fell sharply on Wednesday.Disappointing performance and guidance from semiconductor manufacturing equipment giants are the culprits ASML (ASML) and Taiwan Cicada's performance requires caution.
AI chip manufacturer Nvidia (NVDA), broadcom (AVGO) and arm holdings (ARM) suffered significant or substantial losses. As for chip gear manufacturers, while ASML stock fell sharply, applied materials (AMAT), ram research (LRCX), KLA Co., Ltd. (KLAC) Beat the major level.
AI server manufacturer super microcomputer (SMCI) triggered a buy signal near the approach, then reversed and fell.
meanwhile, tesla (TSLA) fell slightly and reached a 2024 low. Cathie Woods' Ark Invest continued buying TSLA stock on Wednesday.
Investors should be aware that the nature of the stock market has changed.
Nvidia stock is listed on the IBD Leaderboard. KLAC stock is listed on the IBD Long-Term Leaders List. Nvidia, ASML, and Broadcom stocks are included in the IBD 50. Nvidia, ASML, Broadcom, and SMCI stocks are included in the IBD Big Cap 20.
Dow Jones futures today
Dow Jones futures traded 0.1% above fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.3%.
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 rise
Stock market gains continue to come under increasing pressure, with Wednesday's initial modest gains quickly turning into losses again.
The Dow Jones Industrial Average fell 0.1% in stock market trading Wednesday, its worst level since late January. The S&P 500 Index fell 0.6%, and the Nasdaq Composite Index fell 1.15%, both their worst levels in two months. The small-cap Russell 2000 fell 1% to its lowest point in two months.
Both are well below the 50-day line.
Most of the recent breakouts and buy signals have either struggled or failed completely over the past few days.
Various indicators indicate that the market is oversold, and that has been true all week. The CBOE Volatility Index is hovering near its 2024 high, but it is not overly bearish.
But even if a market is “supposed” to experience some kind of rebound, it doesn't have to happen immediately or last.
US crude oil prices fell 3.1% to $82.69 per barrel.
The 10-year Treasury yield fell 7 basis points to 4.58%. But it's still up 38 basis points in April alone.
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ETF
Among growth ETFs, the iShares Expanded Technology Software Sector ETF (IGV) fell 0.6%. The VanEck Vector Semiconductor ETF (SMH) fell 3.1%. Nvidia and TSM stocks are his largest holdings in SMH, with Broadcom, ASML, Applied Materials, Lam Research and KLA also being major components.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 1.4% and the ARK Genomics ETF (ARKG) fell 2.3%. Tesla stock is a major holding across Ark Invest's ETFs.
The SPDR S&P Metals Mining ETF (XME) reversed and fell 0.15%. The U.S. Global Jets ETF (JETS) rose 3.9%. united airlines (UAL) Profits soared. The SPDR S&P Home Builders ETF (XHB) fell 0.8%. The Energy Select SPDR ETF (XLE) fell 0.3% and the Healthcare Select Sector SPDR Fund (XLV) fell 0.2%.
The Industrial Select Sector SPDR Fund (XLI) fell 0.5% and the Financial Select SPDR ETF (XLF) rose 0.25%.
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Taiwan semiconductor revenue
Taiwan Semiconductor's revenue is expected to be flat, but the foundry giant last week reported higher-than-expected first-quarter sales thanks to high-end AI chips.
TSMC manufactures chips for Nvidia, apple (AAPL), Broadcom, and many others.
Taiwan semiconductor stocks fell 0.55% to 139.03 after rebounding from their 10-week line on Tuesday, hitting the 21-day resistance line. TSM stock gained a buy point of 158.40 after Friday's close and is on track to reach a new benchmark. However, investors could use the April 10 high of 148.43 as an early entry.
AI chip stocks struggle
Taiwan Cicada's results and guidance will be key for AI chip leaders Nvidia, Broadcom, and Arm.
Nvidia stock fell 3.9% to 840.35, falling below its 10-week line for the first time since early November. The stock price remained at the 50-day line. NVDA stock has a buy point of 974 from a flat base.
Broadcom fell 3.3% to 1,284.61, below its 50-day line. AVGO stock has a new consolidation, with a buy point at 1,403.98.
ARM stock plunged 12% to 107.50, falling below the consolidation low and now well below its 50-day line.
Although Super Micro is not a chipmaker, its AI servers are powered by AI processors from Nvidia and other companies. SMCI stock was at a buying opportunity after surging 10.6% on Tuesday. On Wednesday, the stock reached 1,020.33 intraday, above the trend line, but reversed and closed 1.7% lower at 960.14%, holding the 21-day and 50-day lines.
Taiwan Semiconductor's capital investment targets will be important for the semiconductor equipment giant.
ASML fell 7.1% to 907.61, below its 50-day line and flat low. The Dutch chip equipment maker missed sales and guidance early Wednesday.
AMAT stock, Lam Research, and KLA all fell about 5%, falling below their 50-day lines. Lam Research and KLA will report next week.
tesla stock
Tesla stock fell 1.1% to 155.45, extending its weekly decline to 9.1%. The stock has fallen to its 2024 low, just above its late April 2023 low.
Tesla's earnings report is coming up on April 23rd, so the conference call is very important. Analysts and investors are looking for some clarity about Tesla's strategy.
Tesla on Wednesday asked shareholders to approve its reincorporation in Texas and a $55.8 billion pay package, but that request was rejected by a Delaware court.
Cathie Wood's Ark ETF bought 66,504 shares of Tesla stock after adding 20,683 shares on Tuesday.
market rise analysis
The stock market is not moving well. The major indexes were decisively below their 50-day moving averages.
It could trigger some buy signals and cause the market to rebound, even temporarily. However, most of the major indexes and major stocks will still require significant work.
Wait for real proof of strength. It's not just his day that's a good day, and it's certainly not his only day that has a strong open.
With the market down, investors should have reduced their exposure. Even if you ignore the major indexes, investors should reduce their exposure by simply cutting their losses or taking profits.
Tesla, Google, meta platform (meta) and microsoft (MSFT) reports earnings along with hundreds of other earnings reports, creating potential for major stock, sector, and market moves.
Of course, future earnings could be a positive trigger, so you'll want to be prepared.
Stay involved in the market and work on your watch list. We focus on stocks that maintain key levels and show relative strength. Keep in mind that just because a stock looks resilient now doesn't mean it will continue to be so in the future.
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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