It was a whipsaw week of price action for all three major indexes, as investors endured increased geopolitical tensions, AI sustainability pressure, and a lackluster earnings response from market-moving Nvidia (NVDA). The Dow Jones Industrial Average (DJI) is on track for its first monthly loss since April, while the Nasdaq Composite (IXIC) and S&P 500 Index (SPX) are poised to usher in weekly and monthly deficits.
AI relief was swift to start the week, with software stocks pushing the Nasdaq back above 23,000 on Wednesday. Bute all of that good will promptly faded following Nvidia's report, with tech turning sour on Thursday. Friday made matters worse after hotter-than-expected inflation data trickled in, sealing a disappointing week and month.
A Treacherous Tech Sector
Investors had their eyes trained on tech this week long before Nvidia. Chipmaker Arm Holdings (ARM) flashed an intriguing buy signal, while IBM (IBM) enjoyed a bounce after landing an analyst bull note and a $112 million contract with the Defense Commissary. Advanced Micro Devices (AMD) is also partnering up, penning an agreement to provide six gigawatt graphic processing units (GPUs) to Meta Platform's (META) AI growth efforts.
Even after the selloff, Dell Technologies (DELL) bucked the broader trend thanks to an impressive Q4 beat. Quantum computing stock IonQ (IONQ) also made some noise after an impressive quarterly report. We broke down Nvidia in depth on our Substack: The Contrarian Edge, as well as in our post-earnings recap.
Buzzworthy Names Making Noise
Beyond the concentration on software, several high-profile stocks made noise this week. This includes a disappointing drug trial result from Novo Nordisk (NVO), a steep pullback by defense giant Kratos Defense & Security Solutions (KTOS), and options traders swarmed crypto favorite Strategy (MSTR). Also making noise in the digital asset sector was Circle Internet Group (CRCL), which looks ripe for a short squeeze.
Upbeat sentiment propped up Home Depot (HD) stock midweek, after the blue-chip shared an upbeat Q4 report. Meanwhile, Netflix (NFLX) surged into March after bailing on its bid to acquire Warner Bros Discovery (WBD).
More Inflation Data Heading Into March
March kicks off next week with plenty of economic data on tap, including manufacturing and services readings, as well as employment data. The Federal Reserve will monitor those reports closely for clues into the health of the economy, as the future of interest rates remains unclear. Earnings season carries into the new month, too, with reports to come from Broadcom (AVGO), Costco Wholesale (COST), JD.Com (JD), Kroger (KR), and Target (TGT) to name a few.
Until then, take a look at what a range breakout from the S&P 500 could mean for bull traders, as told by Schaeffer's Senior V.P. of Research Todd Salamone. On the flip side, learn what history says about an SPX that remains stuck, per Senior Quantitative Analyst Rocky White.
