Market Overview
The stock market experienced a downturn, with major indices falling over 1.0%, led by a decline in tech stocks. The drop was more pronounced in the afternoon, following a period of consolidation after recent highs. The Vanguard Mega Cap Growth ETF and the PHLX Semiconductor Index saw declines of 1.7% and 2.1%, respectively, while the S&P 500 information technology sector dropped by 2.2%.
Individual Stock Performance
- Microsoft, Meta Platforms, and Amazon.com all saw significant declines.
- NVIDIA, however, continued its upward trajectory, marking a 73.6% gain for the year.
- The Invesco S&P 500 Equal Weight ETF fell by 0.5%, underperforming the market-cap weighted S&P 500.
Sector Highlights
- Consumer discretionary and real estate sectors faced the largest declines.
- Consumer staples sector outperformed, buoyed by Target's earnings-related gain.
- Energy and financials were the only sectors to end the day with gains.
Treasuries and Economic Data
Treasuries saw gains, with yields on the 2-yr and 10-yr notes falling. Economic reports indicated steady business spending in January and improved business activity in February, despite a contraction in employment.
Upcoming Economic Data
Market participants are looking forward to data on mortgage index, employment change, job openings, wholesale inventories, crude oil inventories, and the Fed's Beige Book.
Global Markets and Commodities
- European and Asian markets showed mixed results.
- Commodity prices varied, with crude oil declining and gold increasing.
After-Hours Spotlight
Companies like Couchbase and CrowdStrike reported earnings beats, while Nordstrom and ODDITY Tech Ltd. saw declines after their reports.
General Motors Strike
5,000 members at GM's Arlington, TX assembly plant have joined the UAW strike, highlighting ongoing labor disputes.
Today's News
U.S. stocks experienced a significant downturn on Tuesday, marking their worst performance since mid-February. The decline was led by major tech companies, with Tesla (TSLA, Financial) and Apple (AAPL, Financial) among the notable losers. This downturn occurred despite the cryptocurrency market's attention, as Bitcoin (BTC-USD) briefly reached a new all-time high. The Nasdaq Composite (COMP.IND) suffered the most, dropping 1.65%, while the S&P 500 (SP500) and the Dow Jones Industrial Average (DJI) also saw declines. The technology and consumer discretionary sectors were the hardest hit, contributing to the overall market slump.
CrowdStrike Holdings (CRWD, Financial) shares surged by 15% in late trading following the announcement of their fourth-quarter results, which exceeded expectations. The cybersecurity firm reported an adjusted earnings of $0.95 per share on revenue of $845.3M, surpassing analysts' forecasts. This positive performance also lifted other cybersecurity stocks, including Zscaler (ZS), SentinelOne (S), and Fortinet (FTNT). CrowdStrike's CEO highlighted the company's record fourth quarter and significant year-over-year growth.
Conversely, ChargePoint Holdings (CHPT, Financial) experienced a sharp decline after reporting a decrease in revenue growth compared to the previous year. The company's revenue fell by 24% year-over-year, with a notable drop in networked charging systems revenue. Despite an increase in subscription revenue, ChargePoint recorded a higher adjusted EBITDA loss compared to the previous year. The company's financial position remains strong, with a significant cash reserve and no debt maturities until 2028.
Nordstrom (JWN, Financial) reported a Q4 Non-GAAP EPS of $0.96, beating expectations by $0.07, and a revenue increase of 2.3% year-over-year. Despite a decrease in Nordstrom banner net sales, Nordstrom Rack saw a significant sales increase. The company's focus on meeting FY24 guidance is expected to positively impact its valuation.
MongoDB (MDB, Financial) shares dropped by 8% ahead of its fourth-quarter fiscal 2024 financial results announcement. Analysts are anticipating strong subscription revenue growth, particularly from its Atlas cloud database offering. MongoDB's growth expectations remain high, with a projected revenue of at least $1.98B for fiscal 2025.
Wells Fargo analyst John Sheehan highlighted a "core list" of outperforming companies known for their high dividends and stability. This list includes blue-chip, industry-leading companies recommended for building a well-diversified portfolio.
Ross Stores (ROST, Financial) reported a Q4 GAAP EPS of $1.82, surpassing expectations and announcing a significant increase in revenue year-over-year. The company also introduced a new stock repurchase program and increased its quarterly cash dividend.
Ardelyx (ARDX, Financial) saw its shares rise following progress in Congress regarding a kidney patient bill, which could positively impact the company's product, Xphozah. The bill's advancement is seen as a positive development for Ardelyx's market prospects.
Palantir Technologies (PLTR, Financial) is likely to have secured a substantial contract with the U.S. Army, marking one of its largest contracts by annual revenue run-rate. This development underscores Palantir's growing presence in the defense sector.
SoFi Technologies (SOFI, Financial) announced its intention to offer $750 million in convertible senior notes, aiming to strengthen its financial position through this private offering.
Albemarle (ALB, Financial) shares plummeted after the company announced a $1.75B sale of depositary shares to fund its capital spending amid falling lithium prices. This move has sparked concerns about the company's ability to finance its projects given the current market conditions for lithium products.
Bitcoin (BTC-USD) experienced a brief surge to a new all-time high before facing a significant sell-off, highlighting the volatile nature of the cryptocurrency market.
Box (BOX, Financial) reported a Q4 Non-GAAP EPS of $0.42, beating expectations, and provided guidance for the upcoming fiscal year, emphasizing its focus on expanding profitability.
HashiCorp (HCP) exceeded fourth-quarter expectations with a Non-GAAP EPS of $0.05 and reported a revenue increase of 14.7% year-over-year. The company's customer base continues to grow, reflecting its strong market position.
Novo Nordisk (NVO) shares declined as early clinical data for its weight loss drug semaglutide in treating kidney disease failed to impress investors, affecting its stock performance.
Cloudflare (NET) is focusing on expanding its profitability and simplifying its product message for consumers, aiming to cater to a wider range of customers and pursue larger accounts.
Oddity Tech Ltd. (ODD) reported a Q4 Non-GAAP EPS of $0.17, beating expectations, and provided an optimistic financial outlook for 2024, expecting revenue growth and adjusted EBITDA margin improvements.
