The Dow Jones Industrial Average tumbled on inflation worries. AI leader Nvidia moved higher but fellow Magnificent Seven names Tesla, Apple and Microsoft struggled. A Warren Buffett stock flashed a sell signal while Trump Media & Technology got crushed.
Meanwhile, a couple of stocks dug in near entries amid the negative action. Icici Bank and Axon Enterprise managed to hold up. But there were also a number of breakdowns.
Stock Market Today: Bears Maul Small Caps
The tech-heavy Nasdaq closed off lows but still fell 0.8% on the stock market today. Walgreens Boots Alliance lagged in the composite as it tumbled 6%.
The benchmark S&P 500 fell 1%. Extra Space Storage was among the worst performers as it plunged 6.5%. Delta Air Lines had initially been a bright spot on an earnings beat, but failed to stick the landing as it closed down 2.3%. The Invesco S&P 500 Equal Weight exchange traded fund skidded 1.7% amid broader weakness.
S&P 500 sectors mostly ended the day in negative territory. Real estate and utilities, the latter a defensive area, struggled most on the stock market today. Only energy managed to squeeze out a slight gain.
Small caps were spanked by the bears, the Russell 2000 falling 2.7%. The index gapped below its 50-day moving average. Growth stocks dug in though, with the Innovator IBD 50 ETF dipping 0.5%.
Fed Minutes Reveal These Worries
Taking a chunk out of stocks Wednesday was the latest consumer price index, which came in hotter than expected. The news stoked inflation fears and put a damper on prospects for interest rate cuts this summer.
Headline CPI popped 3.5% year over year. This was higher than views for 3.4%. Core CPI, which strips out food and energy prices, spiked 3.8% from a year ago. This was also above analyst expectations.
Also on the economic front, minutes from the Federal Reserve came out Wednesday, but stocks had a muted response. The minutes revealed Fed Chair Jerome Powell and his fellow Federal Open Market Committee members are worried about cutting rates too soon.
"Participants generally noted their uncertainty about the persistence of high inflation and expressed the view that recent data had not increased their confidence that inflation was moving sustainably down to 2 percent," the minutes said.
Meanwhile, the 10-year Treasury note soared 18 basis points to 4.55% while the 30-year gained 13 basis points to 4.63%. The five-year yield jumped 23 basis points to 4.6% while the two-year vaulted 22 basis points to 4.97%. Yields were pushed even higher in afternoon trading following a disappointing 10-year auction.
Dow Jones Today: Home Depot, Intel Stocks Lag
The Dow Jones plunged 422 points, though it managed to close off session lows. This equates to a fall of 1.1%.
Home Depot lagged the most as it tumbled 3%, closely followed by Intel, which sank 2.9%. The struggling semiconductor stock is trading below the 200-day line.
Banking giant Goldman Sachs fell 2.4% while Nike skidded 2.2%.
There were only a few components in positive territory on the Dow Jones today. Walmart fared best, rising 1.4%.
Magnificent Seven: Nvidia Rises Amid Correction
The so-called Magnificent Seven had mixed fortunes in the stock market today.
Nvidia, which has been fueled by AI enthusiasm, bounced after days of weak action. It rose nearly 2% as it got support at the 10-week moving average. Morgan Stanley raised its price target to 1,000 from 795.
Nvidia yesterday closed more than 10% below the March 25 closing high of 950.02. Nevertheless, the Leaderboard stock remains up more than 70% so far in 2024.
Tesla stock suffered most among the much-watched group of stocks. The electric vehicle maker's shares dived more than 3%, losing ground on the 50-day line in the process. Jefferies lowered its price target to 165 from 185 but retained its hold rating. TSLA stock is now down more than 30% so far in 2024.
Microsoft stock fell around 1%, and is now testing the 21-day exponential moving average. Old rival Apple fell 1.1% as its downtrend continues. Google parent Alphabet fell fractionally.
Amazon.com inched lower while Meta Platforms reversed out of negative territory to edge higher.
Donald Trump Stock Sinks
It can often be an investing mistake to let one's heart rule one's head. And that is proving to be the case for investors who got in at the top with Trump Media & Technology stock.
The Donald Trump stock was hammered nearly 9% lower Wednesday, though charitable investors may point out the fact volume was below average. Nevertheless, DJT stock is now down a whopping 57% on the stock's 2024 high, which it reached on March 26.
People who hung on after purchasing at its all-time high of 175 — which it reached in October 2021 when it was still Digital World Acquisition — have lost around 80% of their money.
The Truth Social parent is also struggling on a technical basis. Wednesday's move caused it to lose further ground on the key 50-day moving average, MarketSurge analysis shows.
Stock Market Today: Deckers Decked Amid Breakdowns
Ugg and Hoka brands parent Deckers Outdoor saw yesterday's test of the 50-day moving average turn into a serious breach as it skidded 6.7% in high volume, MarketSurge analysis shows. This is a sell signal.
Deckers stock was hit after Truist downgraded the stock to hold because of weak demand concerns.
Aerospace play Hexcel flashed a sell signal as it tumbled below the 200-day moving average. Shares plummeted 12.4% in massive volume. Chief Executive Nick Stanage is retiring.
Homebuilder stocks were also under pressure as interest rates surged. The iShares U.S. Home Construction exchange traded fund fell below its 50-day line after dipping 4.6%. Volume was above average here.
Markets Skid, Price Out Fed Rate Cuts; Nvidia Rebounds
Warren Buffett Stock Flashes Sell Signal
Even the greatest investors can suffer a painful loss. And legendary stock picker Warren Buffett may be spitting out his Coca-Cola today after one of the stocks held by his Berkshire Hathaway firm flashed a key sell signal.
Buffett stock Floor & Decor gapped below its 50-day moving average in above-average volume.
The relative strength line is also falling. Its share price closed down 7.1%.
Nevertheless, Buffett may opt to pursue his legendary buy-and-hold strategy as he still holds a solid profit on his average buy price in the stock.
But ignoring sell signals can be a risky strategy. One of the keys to successful investing is to keep losses small so they don't do terrible damage to your portfolio
Outside Dow Jones: These Stocks Dig In Near Entries
Even amid the difficult action there were a few stocks showing strength near buy points on the stock market today.
India-based Icici Bank slipped back just below the 26.66 buy point of an early-stage flat base, MarketSurge analysis shows.
Axon Enterprise is another one for investors' watchlists as it climbed 2.3% on the stock market today. Axon continues to form a flat base with an ideal entry of 325.63. It is breaking out past a trend line entry around 319. But market risk is higher now. The police equipment maker is up more than 22% thus far this year.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
