Nasdaq 100, Dow Jones, S&P 500 News: Nvidia’s Volatility Dampens Market Sentiment

James Hyerczyk
Updated: May 29, 2024, 18:22 GMT+00:00

Key Points:

  • Nvidia sees a 0.7% rise after a volatile trading session, maintaining recent momentum.
  • American Airlines drops over 14%, but Dick's Sporting Goods surges more than 15% on earnings.
  • Broad market declines as the 10-year Treasury yield rises above 4.6%, causing investor concerns.
Nasdaq Composite, S&P 500, Dow Jones

Nvidia’s Volatility Dampens Market Sentiment

Stocks are sharply lower on Wednesday, led by a volatile session for Nvidia, amidst rising Treasury yields. Nvidia oscillated between gains and losses, challenging its recent upward momentum following strong earnings.

American Airlines plummeted over 14% after revising its second-quarter sales outlook downwards, dragging Southwest Airlines down by 4%. Conversely, Dick’s Sporting Goods surged over 15% on strong earnings and optimistic future guidance.

At 17:00 GMT, the Dow Jones Industrial Average is at 38492.57, down 360.29 or -0.93%. The S&P 500 Index is trading 5276.27, down 29.77 or -0.56% and the Nasdaq 100 Index is at 16965.34, down 54.54 or -0.32%.

Broad Market Weakness

All eleven sectors of the S&P 500 declined, with around 450 stocks trading lower. The Dow Jones Industrial Average saw two-thirds of its components fall, led by UnitedHealth’s 4% drop following negative remarks about its Medicaid business. Other healthcare stocks like Molina Healthcare, Humana, and Elevance Health also fell.

Treasury Yields Pressure Stocks

The 10-year Treasury yield rose above 4.6%, pressuring equities further. The rise followed a poorly received Treasury auction, highlighting investor concerns over inflation and economic growth trajectories.

Marathon Oil and AI Stock Picks

Marathon Oil shares soared over 8% after ConocoPhillips announced an all-stock acquisition deal. This move validated the predictions of iFi AI, an AI-based investment firm that had projected significant gains for Marathon Oil.

Positive Earnings Reports Boost Individual Stocks

Bank of America upgraded Dick’s Sporting Goods to a buy, citing a strong earnings report and improved full-year guidance. Dick’s shares were up 16% by late morning, on track for their best day since May 2021. Abercrombie & Fitch also reported outstanding sales, with first-quarter revenue exceeding $1 billion, signaling a strong resurgence for the brand.

Market Forecast

Given the mixed earnings results and rising Treasury yields, the market faces a cautious outlook. While individual stocks like Dick’s Sporting Goods and Abercrombie & Fitch show strength, broader market sentiment remains weak. Expect continued volatility as traders assess the economic indicators and Federal Reserve’s next moves.

Technical Analysis

Daily E-mini S&P 500 Index

E-mini S&P 500 Index futures are lower on Wednesday, putting the benchmark in a position to test last week’s low at 5273.50. A trade through this level could encourage a round of profit-taking. This may put enough downside pressure on the market to challenge the 50-day moving average at 5216.47.

The 50-day moving average is controlling the intermediate uptrend. Its failure could trigger the start of a steep decline.

On the upside, the buying has to be strong enough to take out 5368.25 in order to set a new record and signal a resumption of the uptrend.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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