The Dow Jones Industrial Average tumbled Monday amid spiking yields even after key index component Goldman Sachs beat views. Meanwhile, Tesla fell after Chief Executive Elon Musk said massive job cuts are coming, as Trump Media & Technology also sank. And Apple and Nvidia both fell on the stock market today despite bullish Wall Street calls.
Also, a trio of noteworthy stocks dug in near entries: KLA, Lam Research and Heico.
Stocks initially moved higher after Israel successfully repelled a strike from Iran over the weekend. Israeli Defense Forces chief of staff Herzi Halevi said Monday the attack "will be met with a response." This seemed to stoke investor fears of more escalation in the Middle East.
In economic news, U.S. retail sales were stronger than expected. March retail sales rose 0.7% overall compared with expectations for a 0.3% increase. They were up 1% excluding autos and gas, also above views. February's overall gain was revised up to 0.9%.
"While the strong sales growth is a good sign for economic growth in the quarter, the surge in consumer spending could contribute to high consumer prices and cause additional inflation," Commonwealth Financial Network senior investment strategist Sam Millette said in a note to clients. "Bond yields rose immediately following the release due to rising concerns off a potential no-landing, no-rate-cut scenario."
Stock Market Today: Nasdaq, Small Caps Mauled
Early gains evaporated into losses as the Nasdaq composite tumbled 1.8%. Trade Desk and Atlassian were among the laggards. The former stock fell 6.2% while Atlassian dropped 7.1%.
The benchmark S&P 500 also saw gains melt away as it fell 1.2%. Bucking the tide was regional bank M&T Bank, which popped more than 4.7% despite an earnings miss. The stock is nearing a 148.23 flat-base entry, MarketSurge analysis shows.
The S&P 500 sectors were all negative. Technology and real estate were given the worst spanking by the bears. Health care and consumer staples, defensive areas, held up best on the stock market today
Small caps reversed lower, with the Russell 2000 skidding 1.4%. Growth stocks also got mauled, with the Innovator IBD 50 ETF falling 2.1%. Breadth was weak, with decliners leading advancers by more than 5-to-1 on the New York Stock Exchange and in excess of 3-to-1 on the Nasdaq.
Yields rallied strongly again after Friday's flight to safety. The 10-year Treasury note soared 12 basis points to 4.61% while the 30-year jumped 13 basis points to 4.73%. The five-year yield popped 9 basis points to 4.63% while the two-year climbed 3 basis points to 4.92%.
Stocks Shrug Off Powell Comments; AI Leader Surges
Dow Jones Today: Salesforce Stock Stumbles
A bear attack saw early gains disappear Monday as the Dow Jones reversed and ended up 248 points lower. This equates to a 0.7% decline. At session highs the blue chip index had surged more than 400 points.
Goldman Sachs stock was the best performer, rising 2.9% after the banker reported first-quarter earnings that were well above Wall Street views. Strength in its trading and investment banking businesses fueled the beat.
Intel and UnitedHealth also shined. Intel gained 1.7% while UnitedHealth popped 1.5%.
Salesforce was the worst performer on the Dow Jones index and the S&P 500 Monday as it tumbled 7.3%. The stock had its worst day since Dec. 5, 2022, according to Dow Jones Market Data.
Salesforce is in advanced talks to acquire Informatica, the Wall Street Journal reported.
Stock Market Today: Donald Trump Stock Dives On This
The rocky ride continues for Trump Media & Technology investors. On Monday, shares plunged another 18.4% as the company said it planned to issue more stock.
While this is not uncommon for SPAC stocks, the addition of 21.5 million shares will put more than 15% in additional float on the market. Such dilution is never a way to win over shareholders.
Those who bought the Donald Trump stock at recent highs are nursing painful losses. Trump Media stock is now down more than 66% from the stock's 2024 high, which it touched on March 26.
People who hung on after purchasing Trump Media at its all-time high of 175 — reached in October 2021 when it was still Digital World Acquisition — have lost nearly 85% of their money.
The Truth Social parent also is struggling on a technical basis. Monday's move means it now sits about 39% below the key 50-day moving average, MarketSurge analysis shows. It could soon test the 200-day line to boot.
As if that wasn't enough, Trump's hush-money trial began in New York Monday. This is the first time that a U.S. president has faced a criminal trial.
Cathie Wood Buys Plunging Stock
Warren Buffett once said that investors should "be fearful when others are greedy and to be greedy only when others are fearful." That was certainly the case with ARK Invest Chief Executive Cathie Wood, who used Friday's sharp drawdown to snap up plunging stocks.
Her firm, where she also serves as chief investment officer, snapped up more than 308,000 shares in Recursion Pharmaceuticals for the ARK Innovation exchange traded fund on Friday. It currently sits nearly 51% below its Feb. 27 high of 15.74 and has undercut the 200-day line. Investor's Business Daily does not recommend buying issues priced below 10 or in downtrends.
The fund also bought nearly 40,000 Roku shares on Friday for the ARK Innovation Fund.
Roku stock is currently stuck below its 50-day and 200-day moving averages, MarketSurge analysis shows. On the stock market today, shares sit nearly 46% off their recent high of 108.84 reached Dec. 14.
Other moves made by the swashbuckling Wood included purchases of Teledoc Health and 10X Genomics.
Trying to catch a falling knife can be tempting, but often leaves investors nursing losses. IBD recommends buying stocks with strong earnings and price performance. Look for leaders in strong industries that are showing superior earnings growth and sales. The IBD 50 is a rich hunting ground for such issues.
Stock Market Today: Elon Musk Wields Ax On Tesla
Tesla stock tumbled 5.6% amid news it is looking to ax more than 10% of its global workforce as it chases growth. It lost more ground on its 50-day moving average, according to MarketSurge analysis.
Musk said in a leaked memo that the massive cuts are necessary due to "duplication of roles and job functions." According to the firm's annual report, it had 140,473 employees as of December 2023.
"There is nothing I hate more, but it must be done," Musk said "This will enable us to be lean, innovative and hungry for the next growth phase cycle."
Wedbush analyst Dan Ives, who rates the stock outperform with a 300 target, said it was a "another dark day for Tesla." He was concerned about the departure of "key" executives Drew Baglino and Rohan Patel.
"Baglino is an absolute gut punch loss in our view as he was instrumental in the Powertrain and Energy initiatives at Tesla and was viewed by many as key to the Model 2 initiative over the next few years," Ives said.
A reported halt of Cybertruck deliveries may have also weighed on Tesla stock. Shares have plunged roughly a third so far in 2024.
Magnificent Seven: Apple Takes Another Hit
The rest of the so-called Magnificent Seven ended lower on the stock market today.
Apple lost 2.2%. This was despite Morgan Stanley reiterating an overweight rating on shares. Apple stock lost ground on its 50-day line, which is acting as an area of resistance.
A Dow Jones component, Apple was hit after iPhone shipments fell 9.6% in the January-to-March period vs. a year earlier, according to IDC estimates released Sunday.
Meta Platforms reversed lower as it fell 2.3%. Microsoft also dipped, falling 2% amid the tech rout. It is now testing the 50-day line.
Leaderboard stock Nvidia saw early gains fade and closed 2.5% lower. This was despite Citi issuing a "positive catalyst watch" on Nvidia stock and saying investors should buy on any weakness.
Amazon.com lost 1.4% while Google-parent Alphabet dipped 1.8%.
Outside Dow Jones: Three Stocks Near Entries
Amid the negative action on the stock market today, it is a good time to look for stocks nearing breakouts for one's watchlist.
Chip equipment stock KLA saw early gains fade and dipped 0.3%. It is eying an entry of 729.15 out of a third-stage flat base, MarketSurge analysis shows.
Lam Research reversed 1.1% lower, but is continuing to trade tightly. It is trying to reach a flat-base entry of 1,000.39. This is also a third-stage pattern, which is between early and late stage.
Its earnings performance is not ideal, but Lam Research is among the top 6% of stocks in terms of price performance over the past 12 months.
Finally, aerospace play Heico ended the day up 1% as it chases a flat-base buy point of 200.64. This is a first-stage base, which means it is more likely to net big gains. The stock's EPS Rating comes in at 83 and it boasts strong institutional support.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
