Dow Jones Futures- S&P 500 Futures Gain as Nvidia and Tech Stocks Struggle
Dow Jones Futures– U.S. stock market futures saw a modest uptick early Friday, with the Dow Jones, S&P 500, and Nasdaq futures all showing slight gains after the Thanksgiving holiday. Although the U.S. markets were closed on Thursday, futures trading indicated a cautious optimism as investors looked ahead to the shortened trading day on Friday.
The stock market rally experienced a dip on Wednesday, the day before the Thanksgiving holiday, with major indices retreating. The Dow Jones Industrial Average fell 0.3%, while the S&P 500 and Nasdaq Composite dropped by 0.4% and 0.6%, respectively. Despite the pre-holiday selling pressure, the broader market remained up for the week, hovering near all-time highs.
The weakness in the tech sector was a key factor driving the decline, particularly as several major tech companies posted disappointing earnings. Stocks of CrowdStrike (CRWD), Workday (WDAY), Nutanix (NTNX), and Dell Technologies (DELL) all faced significant losses. Nvidia (NVDA) also extended its losses but managed to hold critical support levels, reflecting a mixed outlook for the chipmaker.
Nvidia Stock Struggles Amid Earnings Concerns
Nvidia’s stock fell 1.15% to $135.34 on Wednesday, continuing its struggles from the previous sessions. The stock briefly dipped as low as $131.80, testing a short-term low and edging closer to an automatic sell signal, which would be triggered if the stock fell below the buy point of $140.76.
However, despite the drop, Nvidia shares bounced off the lows, managing to hold above their key 50-day moving average. This technical support level is seen as crucial for the stock’s longer-term trend. While it was positive that the stock did not close below this level, Nvidia remains down by 4.7% for the week and continues to face headwinds. Investors will likely be watching closely to see if the stock can regain momentum in the coming sessions.
Tech ETFs and Semiconductor Stocks Struggle
In line with Nvidia’s struggles, many tech-focused ETFs also experienced declines. The Innovator IBD 50 ETF (FFTY) fell 0.5%, while the iShares Expanded Tech-Software Sector ETF (IGV) dropped 1.8%. This decline was largely driven by poor performance from stocks like CrowdStrike, Workday, and Nutanix, all of which are members of the ETF.
The VanEck Vectors Semiconductor ETF (SMH), which includes Nvidia as one of its dominant holdings, also retreated by 1.3%. These trends reflect broader challenges within the semiconductor and tech sectors, as weak earnings reports continue to weigh on investor sentiment.
Berkshire Hathaway and Homebuilders Show Strength
While the tech sector struggled, there were notable positive moves in other areas of the market. Homebuilders were among the strongest performers, with Toll Brothers (TOL) rising within its buy zone, supported by lower interest rates. The SPDR S&P Homebuilders ETF (XHB) dipped slightly by 0.2%, but Toll Brothers’ strong performance helped buoy the sector.
Berkshire Hathaway (BRKB), Warren Buffett’s investment firm, also made a notable move, breaking out of a key technical pattern. The stock is now featured on Investor’s Business Daily’s (IBD) SwingTrader, reflecting positive momentum in the stock.
Global Chip Equipment Makers and ASML Rise on Export News
Global chip equipment manufacturers, including ASML (ASML), saw gains on other exchanges, driven by news that the U.S. plans to impose new chip export restrictions on China. According to a Bloomberg report, these restrictions are expected to be less stringent than initially proposed, offering some relief to companies like ASML that operate in the semiconductor industry. This news helped boost investor sentiment in the broader semiconductor sector, despite the struggles of major chipmakers like Nvidia.
On a political note, late Wednesday, President-elect Donald Trump made headlines with a post on Truth Social, declaring victory over the issue of illegal migration. Trump claimed to have spoken with Mexico’s President, Claudia Sheinbaum, who reportedly agreed to stop illegal migration over the Mexican border. While the details of this agreement remain unclear, Trump’s declaration of victory may have helped to alleviate some concerns on Wall Street regarding his potential trade policies.
Trump had previously threatened to impose 25% tariffs on goods from Canada and Mexico and an additional 10% tariff on Chinese imports on his first day in office. His recent statements suggest that these tariff threats may not come to fruition, which could be viewed as a positive development for global trade and market sentiment.
Shortened Trading Day and Futures Market Update
Friday’s trading session will be shorter than usual, with U.S. stock exchanges closing at 1 p.m. ET and bond markets closing at 2 p.m. ET. The stock market futures rose modestly, with Dow Jones futures up by 0.3%, S&P 500 futures climbing 0.3%, and Nasdaq 100 futures increasing by 0.55%.
While the futures market is pointing to a positive start, it’s important to remember that overnight action in Dow futures and other indices doesn’t always translate into actual trading during the regular session. Investors should be cautious about making decisions based solely on futures movements, especially with the shortened trading day ahead.
Market Outlook and Sector Performance
The stock market rally showed some signs of weakness heading into Thanksgiving, driven by disappointing earnings reports from several major tech companies. However, key indices remain near all-time highs for the week, and sectors like homebuilding and financials showed strength. Investors will continue to monitor the performance of tech stocks like Nvidia, as well as global trade developments and potential tariff policies from the incoming U.S. administration.
As the market closes early on Friday, the outlook remains mixed, with some sectors showing promise while others face ongoing challenges. Investors will likely continue to adjust their portfolios based on earnings reports, geopolitical developments, and broader economic trends.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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