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S&P 500, Nasdaq post sharpest weekly losses since April amid tech rout

By Investor Empires on July 19, 2024

U.S. stocks fell on Friday as more details emerged about a global IT outage and major averages failed to recover from a selloff that saw the Dow Jones snap a winning streak.

The S&P 500 (^GSPC) fell 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.8%. Both the Nasdaq and the S&P 500 had their worst week since April. The Dow Jones Industrial Average (^DJI) fell about 1%.

Stocks fell after a handful of choppy sessions that saw tech stocks fall, with artificial intelligence-focused chip stocks bearing the brunt. Investors are moving away from the heavyweight tech companies that fueled the recent rally toward smaller-cap companies, which some see as benefiting more from interest rate cuts.

In the early hours of the morning, investors were assessing the potential impact of an “unprecedented” failure of computer systems around the world that has grounded flights and hit banks, telecoms, media companies and more. But concerns were eased after CrowdStrike (CRWD) said there was a fix for the bug, a botched update that affected systems that relied on Microsoft (MSFT).

Shares of CrowdStrike fell about 20% as the outage spread, but they pared their losses to 11%. Shares of Microsoft, which has been working to fix issues with its Azure cloud services, fell less than 1%.

Meanwhile, Republican presidential candidate Donald Trump used his nomination speech on Thursday to say he would “end the electric vehicle mandate on day one.” His comment comes as the market wakes up to the “Trump deal” — the consequences his policies would have on assets if the former president takes over the White House.

Next week, investors will get another glimpse into the state of the consumer and the economy when more earnings arrive, including quarterly results from beverage giant Coca-Cola (KO), delivery service UPS (UPS) and electric-car maker TSLA (TSLA).

Live coverage has ended.12 updates

  • S&P 500, Nasdaq fall for week amid tech rout

    The S&P 500 (^GSPC) closed out its worst week since April as technology sold off.

    The broad-based index fell 0.7% on Friday, with losses of about 2% for the week. The technology-heavy Nasdaq Composite Index (^IXIC) fell 0.8%.

    The Dow Jones Industrial Average (^DJI) fell about 1% on Friday, but still managed to end the week in positive territory.

    Technology stocks led the selloff as investors continued to exit the space. Chip stocks came under pressure again, ending the week with heavy losses.

    On Friday, investors assessed the impact of an “unprecedented” computer outage that affected CrowdStrike (CRWD) and Microsoft (MSFT) platforms. The global IT outage affected a range of entities including airlines and hospitals. CrowdStrike CEO George Kurtz said a fix for the glitch is in place.

    More earnings will start flowing in next week as snack and beverage giant Coca-Cola (KO), delivery service UPS (UPS), and electric car maker TSLA (TSLA) prepare to report their quarterly results.

  • Oil falls 3%, erasing gains from earlier in the week

    Crude oil fell 3%, giving up gains made earlier this week.

    West Texas Intermediate (CL=F) crude settled at $80.13 a barrel, while Brent crude (BZ=F), the global benchmark, fell to just over $82.63 a barrel.

    A stronger dollar and lack of details on stimulus from China, the world’s biggest buyer of crude oil, weighed on futures on Friday.

    Earlier this week, oil prices rose after a larger-than-expected draw in U.S. inventories.

  • Bitcoin price rises to $66,000 per coin

    As other asset classes fell on Friday, Bitcoin (BTC-US) rose more than 4% to hover around $66,000 per coin.

    Cryptocurrency-related stocks also rose during the session, with Riot Platforms (RIOT), MicroStrategy (MSTR) and Coinbase (COIN) all rising by at least 10%.

  • Chip stocks are down again, set to end the week with heavy losses.

    Shares of chipmakers fell on Friday, ending the week in the red.

    Nvidia (NVDA) shares fell more than 2% during the session. The artificial intelligence giant is on track to end the week with losses of more than 8%.

    Chip equipment maker ASML also fell on Friday, on track to post a 17% decline over the past five sessions.

    The sell-off in semiconductors peaked earlier this week as geopolitical headwinds set in. Investors were increasingly concerned about a report that the U.S. could impose tighter restrictions on semiconductor exports. semiconductor technology To China.

    Recent comments by former President Donald Trump during a Bloomberg interview about Taiwan, a major chip manufacturing hub, also helped spur the selloff.

    Chip losses over the past five sessions, as of 1:45 p.m. ET Friday

  • Nvidia, Tesla lead losses on Nasdaq 100

    The Nasdaq 100 (^NDX) fell to a session low, down about 1% on Friday.

    Shares of electric car maker Tesla (TSLA) fell more than 4% while shares of chipmaker Nvidia (NVDA) fell more than 2%.

    Other semiconductors also fell, with Intel (INTC) down more than 5% and ASML (ASML) down 3%.

    The Nasdaq 100 was down about 1% by 1:00 p.m. ET on Friday.

  • Tesla shares fell 4% after Trump said he would end the “electric vehicle mandate.”

    Electric vehicle stocks came under pressure on Friday after former President Donald Trump criticized the Biden administration’s clean energy initiatives, referring to them as the “Green New Deal scam” during the Republican convention.

    “I will end the electric vehicle mandate on day one, thereby saving the American auto industry from complete annihilation, which is happening now, and saving American customers thousands and thousands of dollars per vehicle,” Trump said.

    The comments came despite an endorsement from Tesla (TSLA) CEO Elon Musk. Shares of the electric car giant fell 4% on Friday. Shares of Rivian (RIVN) and Lucid (LCID) also fell more than 1%.

    The Biden administration has no mandate for electric vehicles, but critics point to the EPA Car rules aim to cut carbon emissions It was introduced in March as a way to accelerate the widespread adoption of electric vehicles.

  • Technology, consumer discretionary goods lead declines

    Nearly all sectors of the S&P 500 were lower on Friday, with technology (XLK) and consumer discretionary (XLY) stocks leading the declines.

    The materials sector (XLB) also fell 1%. All three major indexes were in the red by 11:45 a.m. ET.

    The healthcare sector (XLV) was the only sector that rose slightly.

  • Netflix shares rise after quarterly results

    Netflix (NFLX) shares jumped the most since late January at the open before paring gains after the streaming giant posted better-than-expected quarterly results.

    Netflix memberships rose 34% quarter-over-quarter, due in part to the removal of the Basic plan in some markets.

    Netflix shares rose about 3% in early trading before giving up those gains.

  • CrowdStrike shares fall 10% after global IT outage

    CrowdStrike (CRWD) shares fell about 10% on Friday after an “unprecedented” computer systems failure that affected everything from airlines to hospitals.

    Early Friday, CrowdStrike CEO George Kurtz said a fix had been found for the glitch.

    “CrowdStrike is actively working with customers affected by a flaw found in a single content update for Windows hosts,” Kurtz wrote on social media platform X.

  • Stock markets little changed after global IT outage

    Stocks were little changed Friday as more details emerged about a global IT outage. Wall Street struggled to recover from a selloff that left all major averages in the red on Thursday.

    The Dow Jones Industrial Average (^DJI) fell 0.2% after falling more than 1% in the previous session.

    The S&P 500 (^GSPC) was hovering around the flat line, while the tech-heavy Nasdaq Composite (^IXIC) was down 0.2%.

    Investors have been pulling away from technology stocks this week as AI-focused chip stocks have fallen.

    Early this morning, investors were assessing the impact of an “unprecedented” failure of computer systems running CrowdStrike (CRWD) and Microsoft (MSFT)-based platforms.

    CrowdStrike CEO George Kurtz said the bug has been fixed. “CrowdStrike is actively working with customers affected by the bug, which was discovered in a single content update for Windows hosts,” he added.

  • Off the Phone with: American Express CEO

    American Express (AXP) CEO Stephen Squeri told me over the phone that the company will have another strong quarter by increasing its marketing budget by $800 million this year to $6 billion.

    He also said on whether he was thinking more cautiously about the second half of the year because of the elections:

    “If I had been more cautious, I wouldn’t have raised the guidance. I wouldn’t have increased the marketing and so on. I think we’re going to be consistent and I think that’s the key point here. The Fed is going to do what it’s probably going to do in September. It’s certainly not going to raise rates, it’s probably going to lower them, it’s probably going to lower them again before the end of the year. I think that helps you know what consumer confidence is. I think we’ll see what happens in the election in November, which I don’t think anybody has any idea about and the fact is this company has been around for 174 years with 30 presidents — we’ll be able to get through whatever we need to.”

  • In other news…

    In non-Trump RNC speech news, Hulk Hogan Ripping his shirt off at the event Moments ago, the CrowdStrike (CRWD) outage wreaked havoc on people’s lives (and its stock price) this morning…

    We had Netflix earnings last night, which are detailed here on Yahoo Finance’s Alexandra Canal. The stock was down a bit in premarket, with some concerns about Q3 subscriber guidance.

    Here’s what Jefferies technical analyst Brent Thiel had to say about it:

    “We don’t think the guidance is a problem. Given the massive growth over the past 12 months in password sharing (+39 million net adds), the slowdown in subscription growth should come as no surprise. It’s worth noting that the 8 million net adds in Q2 was the strongest quarter the company has reported except for Q2 2020. We expect subscription growth to accelerate in Q4 to 7.7 million net adds given the content slate (Squid Game S2 and NFL Games) and better seasonality in Q4 vs. Q3.”

    It has meaning to me.

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