Dow Jones Futures Loom After Nvidia, Super Micro Plunge; Tesla Slashes Prices

Dow Jones futures rose modestly Sunday night, along with S&P 500 futures and Nasdaq futures. Earnings from Microsoft (MSFT), Meta Platforms (META) and many more are on deck. Tesla, which reports Tuesday, slashed EV and FSD prices over the weekend.

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The stock market suffered sharp losses in the past week. The Dow Jones actually rose a fraction. But the S&P 500 and Nasdaq composite plunged below their respective 50-day moving averages, suffering their worst week in more than a year.

Most of all, leading stocks were the biggest losers. Nvidia (NVDA), the ultimate AI stock and company, dived below key support.

Chip and AI stocks sold off on cautious comments from ASML (ASML) and Taiwan Semiconductor Manufacturing (TSM).

AI server maker Super Micro Computer (SMCI) crashed Friday after not releasing preliminary results, raising fears about AI demand overall.

The market environment is decidedly weak. Investors should be largely in cash, waiting for renewed signs of strength in the major indexes and leading stocks.

Tesla Price Cuts

On Saturday, Tesla cut Model Y, S and X prices in the U.S. by $2,000, while also cutting Full Self-Driving to $8,000 from $12,000.

On Sunday, Tesla cut China prices for the Model 3 and Y by nearly $2,000 while slashing Model S and X prices by up to 22%. Tesla also cut Model 3 prices in key European markets by roughly $2,100-$3,200.

Meta stock is on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Meta, Dexcom and Google stock are on the IBD 50. Meta Platforms, Google and ServiceNow stock are on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures advanced 0.3% and Nasdaq 100 futures climbed 0.5%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Key Earnings Ahead

Microsoft, Meta Platforms, Google parent Alphabet (GOOGL) and Tesla (TSLA) headline a huge week of earnings. General Electric (GE), ServiceNow (NOW), Chipotle Mexican Grill (CMG), Dexcom (DXCM) and Caterpillar (CAT) are among the many other notable reports on tap.

Google stock is in a buy zone. Meta stock, Chipotle and Caterpillar could be setting up, while Dexcom has retreated slightly below a buy point. GE is greatly extended while Microsoft and ServiceNow are starting to crack. Tesla stock has plunged to 52-week lows amid a host of bad news.

These reports and guidance will have a huge impact on their sectors and overall market. Microsoft, Google, Meta and ServiceNow will offer insights into artificial intelligence, as well as cloud computing, online advertising and business software.

For Tesla, there are huge questions regarding the EV giant’s growth strategy. Most of all, is Elon Musk shelving a next-generation Model 2?

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Stock Market Suffers Big Losses

The stock market suffered heavy losses this past week, especially the Nasdaq and leading growth plays.

The Dow Jones Industrial Average edged up 0.01% in last week’s stock market trading. The S&P 500 index tumbled 3.05%, its biggest weekly decline since March 2023. The Nasdaq composite plunged 5.5%, its worst week since November 2022. The small-cap Russell 2000 gave up 2.8%.

The market’s power trend, in force since November, is over as the Nasdaq’s 21-day exponential moving average undercut the 50-day line.

Some stocks are holding support, with a few making encouraging moves. But generally leading stocks are looking damaged or broken.

AI and chip stocks had been holding up reasonably well. But they led the downside this past week, with Nvidia and especially Super Micro plunging on Friday.

The CBOE Volatility index, or VIX, briefly spiked Friday to the market fear gauge’s highest levels since late October. Meanwhile, various indicators suggest the market is significantly oversold. But it’s been oversold for some time.

The 10-year Treasury yield jumped 11 basis points to 4.61%, hitting a five-month intraday high of nearly 4.7% on Tuesday. Markets now expect just one Fed rate cut in 2024.

U.S. crude oil futures fell 2.9% to $83.14 a barrel for the week.

Tesla Plunges With One Big Question For The Earnings Call

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) plunged 5.1%. Microsoft is a huge IGV holding, with ServiceNow stock a key component. The VanEck Vectors Semiconductor ETF (SMH) dived 9.7%. Nvidia stock is the No. 1 holding in SMH, with Taiwan Semi and ASML key members.

SPDR S&P Metals & Mining ETF (XME) dipped 0.8% last week. The Global X U.S. Infrastructure Development ETF (PAVE) retreated 2.8%. U.S. Global Jets ETF (JETS) jumped 4.7%. The SPDR S&P Homebuilders ETF (XHB) skidded 3.9%.

The Energy Select SPDR ETF (XLE) fell 1.25% and the Health Care Select Sector SPDR Fund (XLV) closed fractionally higher. The Industrial Select Sector SPDR Fund (XLI) gave up 2%, with…