Thursday Market Rollercoaster: Dow Plummets 500 Points, Tech Stocks Tumble, Yet Amazon Prime Day Sales Hit Record $14.2 Billion
Thursday Market Rollercoaster: Dow Plummets 500 Points, Tech Stocks Tumble, Yet Amazon Prime Day Sales Hit Record $14.2 Billion
Stocks ended Thursday on a downward trend, with the Dow dropping over 500 points and the S&P 500 and Nasdaq slipping by 0.8% and 0.7%, respectively. Evercore ISI warned of potential market volatility in the coming weeks, while UBS highlighted possible impacts on chip stocks due to the upcoming U.S. presidential election and potential export controls on China. However, Goldman Sachs projected Apple to surpass earnings expectations for the third quarter. The CBOE Volatility Index (VIX) rose by 9% to about 16, indicating increased fear and uncertainty in the market. Additionally, Rumble's trading volume surged following the selection of JD Vance as the Republican vice presidential candidate.
Domino's Pizza shares fell by 13% after reporting mixed second-quarter results, and Eli Lilly shares declined nearly 6% due to competition from Roche's new weight loss drug. In contrast, Warner Bros. Discovery shares rose by 5% amid reports of considering strategic options to boost share price. The S&P 500 saw an approximate 1% decline for the week, primarily due to struggling tech stocks, although Citi remains optimistic about the S&P 500's performance in the second half of 2024. Cintas shares hit an all-time high after better-than-expected fourth-quarter results, and Amazon Prime Day sales reached a record $14.2 billion, driven by high demand for electronics and home goods. Morgan Stanley identified Amazon, Apple, and Eli Lilly as high-potential stocks for the earnings season, while Bank of America attributed the recent semiconductor stock decline to investor positioning rather than fundamental issues. Despite fluctuations, the Nasdaq Composite rebounded from a significant sell-off the previous day, although jobless claims surged to their highest level in nearly a year.
Key Takeaways
- Stocks saw declines, with the Dow, S&P 500, and Nasdaq down significantly.
- Evercore ISI and UBS highlighted potential market weaknesses, particularly in relation to chip stocks and the upcoming U.S. presidential election.
- Notwithstanding the challenges, Wall Street remained optimistic about certain stocks such as Taiwan Semiconductor and Apple.
Analysis
The projected market volatility and weakness, especially in the chip stocks sector, are indicators of the substantial interconnectedness between geopolitical events and stock market performance. The upcoming election and potential export controls on China could exacerbate the volatility, with short-term impacts being uncertainty and fluctuations, and long-term effects hinging on policy outcomes and global trade dynamics. This underlines the vulnerability of tech giants like Apple and Taiwan Semiconductor to regulatory changes and the subsequent impact on financial instruments tracking these sectors.
Did You Know?
- Evercore ISI: The warning about potential market volatility from Evercore ISI underscores their role in analyzing market trends and providing strategic insights to investors.
- CBOE Volatility Index (VIX): A rise in the CBOE Volatility Index to about 16 reflects increased market fluctuations and higher levels of fear and uncertainty.
- Amazon Prime Day: The record sales during Amazon Prime Day highlighted shifting consumer spending trends and the impact of e-commerce on retail sales.