The Week In Review: 7/19/24

After hitting a record high on Monday, the S&P 500 index jittered with investor fears of a correction mounting because of a few macro events and geopolitical concerns. As of mid-Friday, the S&P 500 was on track for its worst weekly performance since April, down 250 basis points for the week. The top 10 S&P 500 stocks, which include the likes of Apple, Inc. (AAPL), Microsoft Corporation (MSFT), and Nvidia Corporation (NVDA), declined almost 6% this week with investors rotating out of tech stocks after the latest CPI print and earnings reports. Last week’s inflation data, mixed earnings results from tech giants, escalating trade tensions between the U.S. and China, and the rising probability of a second term for Donald Trump shaped the market performance this week.

Zooming In

While the aforementioned factors dictated the market performance in the first four trading days of the week, the global tech outage caused by a faulty content update by CrowdStrike Holdings, Inc. (CRWD) dominated the market movements on Friday. Following this incident, which led to more than 1,000 flights being canceled worldwide and disrupted business operations of almost all companies that use Windows products, CrowdStrike stock crashed more than 11% intraday while Microsoft stock also dipped 1%.

Below are some of the most notable market moves observed during the week.

• Trump Media & Technology Group (DJT) skyrocketed last Monday by almost 40% with investors betting on Donald Trump to be re-elected for a second term this November.
• Gold prices reached a record high of close to $2,500 as geopolitical concerns continued to play a part in the investment decision-making process of investors.
• Chip stocks lost more than $500 billion in market value after reports emerged that the U.S. government is planning to impose more export restrictions.

Zooming Out

Tesla, Inc. (TSLA) is scheduled to report earnings next Tuesday, and it would be reasonable to expect substantial volatility in Tesla stock following the earnings report. Investors are expecting Elon Musk to comment on the current status of the demand for EVs to assess the outlook for this sector in the foreseeable future. A few notable tech companies are also scheduled to report earnings next week, including Alphabet Inc. (GOOG), Texas Instruments Incorporated (TXN), Visa, Inc. (V), and Amazon.com, Inc. (AMZN). These earnings reports will be the driving force for markets next week, but investors may also want to pay close attention to the June personal consumption expenditures report scheduled to be released next Friday. This report will shed light on the strength of the consumer as we move closer to a rate cut.

Dilantha DeSilva and Stocks.News have positions in MSFT. Stocks.News also has positions in TSLA, GOOG, and AMZN.