This week is a critical week for U.S. stocks . The latest interest rate decision of the Federal Reserve, the July non-farm payrolls report, and the financial reports of four of the top 7 technology companies will all be released. While the market is waiting for the release of the financial reports of technology stocks, chip stocks Weak performance on Tuesday: Huida plunged 7.04%, the largest drop in more than 3 months, with its market value evaporating US$193 billion in a single day; however, it rebounded after the market closed.
Microsoft releases financial report, revenue is lower than expected
After the U.S. stock market closed, Microsoft released its financial report, which showed that last quarter's revenue growth was lower than market expectations, highlighting that the huge investment in AI may take longer to reap returns than originally expected, causing the stock price to plummet by more than 6% after the market closed. %. (Apple, Amazon, and Meta will also release financial reports this week)
At the close: Microsoft's stock price fell 0.9%, Amazon fell 0.8%, Apple rose 0.3%, Amazon fell 0.8%, Meta fell 0.54% due to valuation concerns, the index measuring the "Seven Heroes of Technology" fell 2%, TSMC ADR also fell 3.4 %.
The four major indexes ended mixed on Tuesday, with the Philadelphia Semiconductor Index falling the most, dragged down by Huida's plunge:
- The Dow Jones Industrial Average rose 203.4 points, or 0.5%, to close at 40,743.33 points.
- The Nasdaq index fell 222.79 points, or 1.28%, to close at 17147.42 points.
- The S&P 500 index fell 27.1 points, or 0.5%, to close at 5,436.44 points.
- The Philadelphia Semiconductor Index fell 197.47 points or 3.88% to close at 4890.15 points.
Market calls for Fed rate cut in September
Tom Essaye, founder of The Sevens Report , said that given the recent weakness in technology stocks, if the Federal Reserve (Fed) does not send a signal to cut interest rates in September this week, the market may be less optimistic, especially if corporate performance is poor. .
If the Federal Reserve is about to start an interest rate cut cycle, historical data shows that it is usually beneficial to stock market bulls. According to statistics from financial research company CFRA, in the previous 6 interest rate hike cycles, the S&P 500 Index rose by an average of 5% one year after the first interest rate cut. %. In addition, the average increase of the Russell 2000 Index also reached 3.2%.
Huida volatility surpasses Bitcoin
An interesting data is that according to Bloomberg , Huida’s stock price has collapsed 23% since July 10, from US$134.91 to US$103.73. NVIDIA’s 10-day volatility has even reached twice that of Bitcoin. many!
But despite this month's share price collapse, Huida is still up about 109% this year, more than almost any other stock in the S&P 500 except Super Micro, which is also benefiting from the AI boom.
As for the past two weeks, investors have continued to withdraw funds from large technology stocks such as Huida. The reason may be that investors are increasingly worried about whether large companies can obtain returns on their AI spending, and thus adjust their investment sectors.
Strategas Securities ETF and technical strategist Todd Sohn said that this is the most painful time for Huida in the past eight months. It is not interesting at all when one of the best stocks corrects like this, but Huida is of the same type. It's necessary for stocks to take some of the enthusiasm out of it, and some sort of recalibration of expectations and attitudes will ultimately be beneficial.
