The Dow Jones Industrial Average tumbled Wednesday after inflation data came in hotter than expected, with major indexes slipping back near session lows. Artificial intelligence leader Nvidia (NVDA) moved higher despite a correction but fellow Magnificent Seven names Tesla (TSLA), Apple (AAPL) and Microsoft (MSFT) struggled on the stock market today.
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Meanwhile, a couple of stocks were digging in near entries amid the negative action. Icici Bank (IBN) and Axon Enterprise (AXON) were trying to hold up. But there were also a number of breakdowns.
The tech-heavy Nasdaq dropped more than 1% on the stock market today. CoStar (CSGP) lagged as it tumbled more than 5%.
The benchmark S&P 500 also fell more than 1%. Extra Space Storage (EXR) was among the worst performers as it plunged around 6%. Delta Air Lines (DAL) had initially been a bright spot on an earnings beat, but reversed lower. The Invesco S&P 500 Equal Weight (RSP) exchange traded fund skidded nearly 2% amid broader weakness.
S&P 500 sectors were all in negative territory. Real estate and utilities, the latter a defensive area, struggled most on the stock market today. Energy and communication services fell the least.
Small caps got bitten by the bears, as the Russell 2000 fell more than 2.5%. Growth stocks were digging in though, with the Innovator IBD 50 ETF (FFTY) dipping only 0.3%.
Stock Market Today: Hot Inflation Stokes Fears
Taking a chunk out of stocks Wednesday was The latest consumer price index reading, which came in hotter than expected. The news stoked inflation fears and put a damper on prospects for interest rate cuts in the near future.
Headline CPI popped 3.5% year over year. This was higher than views for 3.4%. Core CPI, which strips out food and energy prices, spiked 3.8% from a year ago. This was also above analyst expectations.
Also on the economic front, minutes from the Federal Reserve are due later Wednesday. As traders scaled back on bets on interest rate cuts, investors will be poring over the latest minutes when they are released, looking for further policy clues.
Meanwhile, the 10-year Treasury note soared 14 basis points to 4.51% while the 30-year gained nine basis points to 4.59%. The five-year yield jumped 18 basis points to 4.56% while the two-year also vaulted 18 basis points to 4.93%.
Dow Jones Today: Home Depot, Intel Stocks Lag
The Dow Jones was down nearly 500 points as it fell back toward session lows. This equates to a fall of 1.3%.
Home Depot (HD) lagged the most as it tumbled nearly 3%.
Intel (INTC) also struggled, as the chip giant sank 2.7%. The struggling semiconductor stock is trading below the 200-day line.
Cisco Systems (CSCO) had been the worst laggard early and remained down more than 2%.
There were only a few components in positive territory on the Dow Jones today. Walmart (WMT) was faring best, rising a meager 0.6%.
Magnificent 7: Nvidia Rises Amid Correction
It was shaping up to be a mixed session for the so-called Magnificent Seven on the stock market today.
Nvidia stock, which has been fueled by AI enthusiasm, was trying to fight back after reversing into correction territory. It rose more than 1% and pulled further clear of the key 50-day moving average. It got a boost after Morgan Stanley raised its price target to 1,000 from 795.
Nvidia stock fell into correction territory yesterday when it closed more than 10% below the March 25 closing high of 950.02. A standard definition of a correction is a fall of more than 10% but less than 20%. Nevertheless, the Leaderboard stock remains up more than 70% so far in 2024.
Tesla stock suffered most among the much-watched group of stocks. The electric vehicle maker’s shares dived 3%, losing ground on the 50-day line in the process. It came after Jefferies lowered its price target to 165 from 185 but retained its hold rating.
Microsoft stock also lagged as it fell more than 1%, and is now testing buying support at the 21-day exponential moving average. The software giant is the world’s largest company by market cap, valued at more than $3 trillion. Old rival Apple (AAPL) also fell more than 1% as its downtrend continues.
Amazon.com (AMZN) dipped 0.4% while Google-parent Alphabet (GOOGL) fell around 1%. Meta Platforms (META) reversed out of negative territory to turn in a fractional gain.
Stock Market Today: Deckers Decked Amid Breakdowns
Ugg and Hoka parent Deckers Outdoor (DECK) saw yesterday’s test of the 50-day moving average turn into a serious breach as it skidded more than 7% in high volume, MarketSurge analysis shows. This is a key sell signal.
Deckers stock was hit after Truist downgraded the stock to hold because of weak demand concerns.
Aerospace play Hexcel (HXL) flashed a sell signal as it tumbled below the 200-day moving average. Shares plummeted more than 11% in massive volume.
Hexcel stock tumbled after it emerged that Chief Executive Nick Stanage is retiring. He will be replaced by Thomas C. Gentile, effective May 1.
Homebuilder stocks were also under pressure. The iShares US Home Construction (ITB) exchange traded fund is testing support at its 50-day line after dipping more than 3%.
Outside Dow Jones: These Stocks Dig In Near Entries
Even amid the difficult action there were a few stocks showing strength near buy points on the stock market today.
India-based Icici Bank slipped back just below the 26.66 buy point of an early-stage flat base, MarketSurge analysis shows. Nevertheless, shares were digging in just below the entry. The stock reclaimed its 50-day moving average in mid-February. Icici stock rallied in March as Asian bank stocks acted strong.
Earnings performance is a particular highlight here, with its EPS Rating a perfect 99. Icici provides personal and business banking services and corporate services covering global and capital markets, digital services and cash management.
Axon Enterprise is another one for investors’ watchlists as it climbed more than 1% on the stock market today. Axon continues to form a flat base with an ideal entry of 325.63.
Axon’s overall performance is strong, with its IBD Composite Rating coming in at 99. The police equipment maker is up more than 22% so far in 2024.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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Source: investors.com
