Futures for major indices, including Dow Jones, S&P 500, and Nasdaq, exhibited minimal movement in after-hours trading. Despite reporting strong earnings bolstered by a surge in AI chip sales, Broadcom (AVGO) saw a notable decline late in the session.
The stock market displayed impressive resilience on Thursday, with broad participation in the rally.
Oracle (ORCL) faced a downturn due to disappointing revenue alongside significant increases in AI-related expenses, leading to a ripple effect impacting several AI-focused stocks, including Nvidia (NVDA) and Vertiv (VRT). However, these stocks managed to recover considerably from their intraday lows. The Dow Jones and the small-cap Russell 2000 reached record highs, while the S&P 500 reversed earlier losses, with the Nasdaq also cutting into its steep declines.
Eli Lilly (LLY) showcased a strong intraday performance following promising news about an obesity drug, and biotech player Genmab (GMAB) flashed a buy signal. Retailers such as Urban Outfitters (URBN) and Tapestry (TPR) experienced breakouts, alongside gold and silver stocks, including Newmont (NEM) and the VanEck Gold Miners ETF (GDX), which also gained traction during the session.
In pre-market trading, Dow futures increased slightly, while S&P futures remained flat and Nasdaq futures dipped amid Broadcom’s struggles. It’s important to note that after-hours movements do not always predict the following day’s trading actions.
Broadcom’s Performance
Broadcom exceeded earnings expectations for fiscal Q4, with accelerating revenue growth. The company forecasted a doubling of AI chip sales for the upcoming quarter, though its non-AI segment showed flat performance. After initially surging over 3% in after-hours trading, Broadcom’s stock closed down 1.6% at 406.37, a notable pullback from its record high reached just a day prior.
Nvidia’s shares dipped 1.55% in extended trading post-Broadcom’s results, as the AI sector recalibrated following Oracle’s less-than-ideal financials. Meanwhile, Taiwan Semiconductor (TSM), a key supplier for both Nvidia and Broadcom, also witnessed a minor decline in after-hours trading.
Corporate Earnings and Moves
In other earnings news, Netskope (NTSK), a cybersecurity IPO, reported a smaller-than-anticipated quarterly loss, but its stock slid in late trading. Costco Wholesale (COST) dipped marginally with mixed results, struggling in a prolonged downtrend. Lululemon Athletica (LULU) surprised with robust Q3 results despite offering weak holiday guidance, and the announcement of CEO Calvin MacDonald’s impending departure sparked a brief stock surge, although long-term prospects remain uncertain.
Overall Market Trends
Thursday’s trading session remained mixed; however, significant improvement was evident as the day progressed. The Dow Jones Industrial Average increased by 1.3%, while the S&P 500 managed a small uptick of 0.2%, reversing initial losses. The Nasdaq composite saw a 0.3% decline after strong support at the 21-day moving average, and the Russell 2000 rose by 1.2%.
The Invesco S&P 500 Equal Weight ETF (RSP) reached another all-time high, gaining 0.8%. Strength was noted across various sectors, including biomed, metals, and retail, while Robinhood (HOOD) suffered a notable hit, falling over 9% due to weak trading metrics.
Other AI-related companies like Ciena (CIEN) performed well amid earnings, while the telecommunications and electronics sectors also thrived, with several memory stocks gaining momentum.
U.S. crude oil prices dropped by 1.5%, while the 10-year Treasury yield dipped just slightly.
Insights on Growth Stocks
Stocks showing promising buy signals included Eli Lilly, which rose 1.6% to 1,009.38, breaking a short downtrend. This could present an opportunity for investors to consider entering or adding to positions. Genmab also experienced an upward swing of 3.4%, with its shares briefly clearing a buy point. Urban Outfitters and Tapestry broke past their respective buy points, while Newmont moved out of a consolidation phase with strong upward momentum in the gold sector.
Market Engagement Strategy
Thursday highlighted the importance of diversification in an investment portfolio, considering the broadening market leadership across different sectors. With both the Dow and Russell 2000 hitting new highs, investors should remain vigilant and actively manage their watchlists.
Staying informed about market direction and leading stocks is crucial amidst the current fluctuating landscape.
