NEW YORK – Dow Jones futures saw a slight uptick overnight, accompanied by increases in S&P 500 futures and Nasdaq futures. The upcoming earnings report from semiconductor giant Taiwan Semiconductor could have significant implications for the chip sector.
The stock market rally initially opened higher but quickly turned downwards, with the Nasdaq leading the retreat. Chip stocks faced losses on Wednesday following disappointing results and guidance from semiconductor equipment giant ASML, as investors exercised caution ahead of Taiwan Semiconductor’s earnings report.
Leading AI chipmakers such as Nvidia, Broadcom, and Arm Holdings experienced notable declines, while chip-gear makers like ASML, Applied Materials, Lam Research, and KLA Corp. also saw decreases, with some breaking key levels.
In another sector, Tesla stock fell slightly, nearing 2024 lows, as Cathie Wood’s Ark Invest continued to purchase TSLA shares.
Investors are advised to be prepared for the changing character of the stock market. Notably, Nvidia stock is featured on IBD Leaderboard, while other stocks are listed on IBD’s Long-Term Leaders, IBD 50, and IBD Big Cap 20 lists.
Looking at the futures market today, Dow Jones futures showed a slight increase compared to fair value, while S&P 500 futures and Nasdaq 100 futures also rose slightly. It’s important to remember that overnight futures activity does not always translate directly to regular stock market trading.
Taiwan Semiconductor’s earnings report is anticipated to be flat, although the company reported Q1 sales above expectations last week, driven by strong demand for high-end AI chips. The stock is set to establish a new base with a potential buy point.
The market rally continues to face pressure, with major indexes dropping below their 50-day moving averages. Oil prices fell, and the 10-year Treasury yield also dropped, despite having risen significantly in April.
In the ETF market, various sector ETFs experienced fluctuations, with growth ETFs like IGV and SMH seeing decreases, while other funds like JETS and XLF saw increases.
Overall, the stock market’s performance has been underwhelming, with major indexes struggling and leading stocks facing challenges. Investors are advised to stay vigilant, focus on resilient stocks, and monitor upcoming earnings reports for potential market moves.