Last night, after briefly touching new highs at the opening, both the NASDAQ and S&P 500 indexes retreated throughout the day.
By the closing bell, the S&P 500, which had briefly touched the 5500 mark, declined by 0.25% to 5473.17 points. The NASDAQ fell by 0.79% to 17721.59 points, while the Dow Jones Industrial Average rose by 0.77% to 39134.76 points. Of concern to many technical traders was the “outside day” formation exhibited by both the NASDAQ and S&P 500 on Thursday, colloquially known as a “reversal day” — where the entire body of today’s candle engulfs that of the previous trading day, a signal particularly significant after a prolonged uptrend.
Among the most emblematic stocks of this global market surge was NVIDIA. Rising nearly 4% at one point only to end with over a 3% decline, NVIDIA relinquished its position as “global stock king,” which it had held for just a day, back to Microsoft.
Bn Capital analyst Leo Nelissen commented that Thursday was a typical profit-taking day, with funds shifting from growth stocks to value stocks, especially within the energy sector, buoyed by bullish signals in international oil prices. Interestingly, the top ten components of the S&P 500 had collectively risen by 17% over the past three months, while the rest averaged a 1.3% decline. Such high concentration within the index meant weakness in a few large companies could drive index declines without broader market repercussions.
Andrew Thrasher, analyst at Financial Enhancement Group, metaphorically described the current market as “sellers entering while bulls dance on a knife’s edge.” He noted that market sentiment now heavily hinges on NVIDIA and Apple, with few catalysts needed to trigger market downturns.
Thursday’s market movements also likely anticipate Friday’s “triple witching hour,” where approximately $5.5 trillion worth of options across US stock indices, individual stocks, and ETFs are set to expire. Post-closing on Friday also marks the quarterly rebalancing of the S&P and Dow Jones indices, which will entail adjustments in ETF holdings.
Popular stock performances on Thursday saw tech giants mixed: Apple down 2.15%, Microsoft down 0.14%, Amazon up 1.8%, META up 0.44%, Google (Alphabet) Class A up 0.69%, Tesla down 1.78%, NVIDIA down 3.54%, and Intel down 0.03%.
Chinese stocks showed weakness, with the NASDAQ Golden Dragon China Index down 1%, Alibaba down 0.15%, Baidu down 2.27%, Pinduoduo down 0.03%, JD.com down 1.27%, NetEase up 0.99%, NIO down 2.26%, Li Auto down 1.74%, and Bilibili up 5.38%.
Other notable news included positive results from Gilead Sciences’ long-acting HIV prevention drug Lenacapavir, driving an 8.46% stock surge, and challenges for Qualcomm with the launch of laptops featuring the Snapdragon X Elite chip, contributing to a over 5% decline.
Zealand Pharma also saw a stock rise of over 10% off positive Phase Ib trial results for their long-acting amylin analog, petrelintide, showing an 8.6% reduction in body weight over 16 weeks.
Finally, NVIDIA CEO Jensen Huang’s continued stock sales, totaling approximately $80 million in recent weeks, were disclosed, alongside Piper Sandler naming AMD as their top large-cap semiconductor pick for the second half of the year, which helped AMD’s stock rise by 4.62%.
Overall, Thursday’s market dynamics underscored volatility and strategic shifts amidst ongoing economic and geopolitical factors influencing global equities.
