US Stocks End Mixed as Tech Selloff Weighs on Nasdaq
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The US stock market ended the session mixed, with the Dow Jones gaining 0.17% and the S&P 500 losing 0.26%, while the Nasdaq 100 fell 1.12% due to a tech selloff. Below the surface, the Russell 2000 outperformed with a 0.41% gain, and the VIX jumped 5.02% to 19.87. The 10Y yield declined 0.53% to 4.53, and WTI crude oil dropped 1.88% to 89.58.
Notable movers included AAPL down 3.64%, MSFT down 2.02%, and TSLA down 3.00%. The sector ETFs showed a mixed picture, with XLF up 0.94% and XLK down 1.85%. The market is waiting for the next catalyst, with earnings season approaching and the Fed's next move uncertain.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,386.65 | -0.26% | Tech selloff weighed on the index |
| Nasdaq 100 | 29,084.50 | -1.12% | Tech stocks led the decline |
| Dow Jones | 50,872.11 | +0.17% | Defensive sectors supported the index |
| Russell 2000 | 2,867.02 | +0.41% | Small-cap stocks outperformed |
| VIX | 19.87 | +5.02% | Volatility increased as stocks declined |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| AAPL | -3.64% | Tech selloff |
| MSFT | -2.02% | Tech selloff |
| TSLA | -3.00% | Tech selloff |
| JPM | +0.51% | Financials outperformed |
| GS | -1.24% | Financials underperformed |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLF | +0.94% | Financials outperformed |
| XLK | -1.85% | Tech selloff weighed on the sector |
| XLI | +1.13% | Industrials outperformed |
| XLE | -1.61% | Energy underperformed |
| XLY | +0.42% | Consumer discretionary outperformed |
| XLC | +0.35% | Communication services outperformed |
| XLP | +1.24% | Consumer staples outperformed |
| XLV | +1.26% | Healthcare outperformed |
| XLU | +1.06% | Utilities outperformed |
| XLB | +1.62% | Materials outperformed |
| XLRE | +2.13% | Real estate outperformed |
Spotlight
The tech selloff was the main story of the day, with AAPL, MSFT, and TSLA all declining. The table below shows the decline in tech stocks:
| Ticker | Change | Read |
|---|---|---|
| AAPL | -3.64% | Tech selloff weighed on the stock |
| MSFT | -2.02% | Tech selloff weighed on the stock |
| TSLA | -3.00% | Tech selloff weighed on the stock |
The decline in tech stocks has implications for related names, such as NVDA and GOOGL.
Pre-Market & Overnight
US futures are pointing to a mixed open, with the Dow Jones up 0.1% and the S&P 500 down 0.2%. The Nasdaq 100 is down 0.5%. In Asia, the Nikkei 225 closed down 0.5%, while the Hang Seng Index closed up 0.2%. In Europe, the Stoxx 600 is down 0.3%. Bitcoin is down 1.5% to 61,200, while Ethereum is down 2.5% to 1,600.
Macro & Fed
The FOMC meeting is scheduled for next week, and the market is waiting for the Fed's next move. The yield curve is currently inverted, with the 2Y yield at 4.83 and the 10Y yield at 4.53. Today's data calendar includes:
| Time HKT | Release | Consensus | Why it matters |
|---|---|---|---|
| 20:30 | Consumer Price Index | 0.3% | Inflation data will inform the Fed's next move |
| 22:00 | Retail Sales | 0.5% | Consumer spending data will inform the Fed's next move |
Geopolitics & Global
- The US and China are scheduled to meet next week to discuss trade tensions.
- The EU is considering new sanctions on Russia in response to the ongoing conflict in Ukraine.
- The UK is facing a potential recession, with GDP growth slowing to 0.1% in the first quarter.
- The Japanese yen is weakening, down 1.5% against the US dollar.
- The Australian dollar is strengthening, up 1.2% against the US dollar.
Earnings — What to Watch
| When HKT | Ticker | Consensus | What to look for |
|---|---|---|---|
| 22:00 | ORCL | $1.15 | Cloud revenue growth and margin expansion |
| 23:00 | TGT | $2.35 | Same-store sales growth and inventory management |
| 00:00 | LULU | $1.45 | Revenue growth and gross margin expansion |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| AAPL | Tech | Tech selloff creates buying opportunity |
| MSFT | Tech | Tech selloff creates buying opportunity |
| TSLA | Auto | Tech selloff creates buying opportunity |
| JPM | Finance | Financials outperforming |
| GS | Finance | Financials underperforming |
| NVDA | Tech | Tech selloff creates buying opportunity |
| GOOGL | Tech | Tech selloff creates buying opportunity |
| AMZN | Retail | Retail sales data will inform earnings |
| META | Tech | Tech selloff creates buying opportunity |
| AVGO | Tech | Tech selloff creates buying opportunity |
What Could Break the Tape
- Tech selloff accelerates, dragging down the broader market
- Fed raises interest rates more aggressively than expected
- Geopolitical tensions escalate, leading to a flight to safety
- Earnings season disappoints, leading to a decline in investor sentiment
- Tech selloff creates a buying opportunity, leading to a rebound
- Fed pauses interest rate hikes, leading to a rally in risk assets
- Geopolitical tensions ease, leading to a decline in volatility
- Earnings season beats expectations, leading to an increase in investor sentiment
Positioning Notes
- The market is waiting for the next catalyst, with earnings season approaching and the Fed's next move uncertain.
- The yield curve is currently inverted, with the 2Y yield at 4.83 and the 10Y yield at 4.53.
- The VIX is up 5.02% to 19.87, indicating increased volatility.