Here are 3 forces that drove a whirlwind week for the stock market
An avalanche of selling on Friday crushed the stock market, a dramatic reversal from record highs earlier in the week. Chip stocks nosedived in the final trading session of last week. There were pockets of weakness in...
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An important development from the financial markets: An avalanche of selling on Friday crushed the stock market, a dramatic reversal from record highs earlier in the week. Chip stocks nosedived in the final trading session of last week. There were pockets of weakness in tech ever since Club name Broadcom disappointed on earnings.
However, the sell-off on Friday was next-level after a strong jobs report dashed hopes of a Federal Reserve interest rate cut and sent the 10-year bond yield soaring above 4. The S & P 500 and Nasdaq plunged 2. 2%, respectively, on Friday, making Tuesday's record-high closes seem like a distant memory.
Economic Details
The massive rotation out of tech into lagging sectors like health care and financials did produce some winners for us. For the week, Eli Lilly rose 2. 4%, and Wells Fargo gained 5.
When it was all said and done, the weekly losses in the S & P 500 and Nasdaq mirrored Friday's declines. The S & P 500 snapped a nine-week winning streak. Here is a closer look at what drove the market action last week, starting with the sky-high earnings expectations for Broadcom and two other Club tech names that went unmet.
Hot stocks into earnings It started on Wednesday, when Palo Alto Networks shares sank despite delivering a strong beat-and-raise quarter the prior evening. The stock came into the print hot after setting a new record high on Monday. When management reiterated its long-term financial outlook, instead of raising it, the sellers drove the stock down by 5.
Analyst Views
It didn't change our view on Palo Alto. We love that management finally showed Wall Street that AI can accelerate its business. That is huge considering how badly cyber stocks had sold off earlier in the year on what Jim Cramer said all along were unfounded disruption concerns.
For the week, Palo Alto fell 3. A similar story played out when CrowdStrike reported better-than-expected earnings and forward guidance on Wednesday evening. The stock was down more than 10% during Thursday's session but closed down less than 4%.
Like Palo Alto, CrowdStrike's weakness can be pinned on falling short of lofty expectations amid near-record-high shares. We were not discouraged . CrowdStrike also showed us that AI is a boon to business.
Economists are analysing what the news means for the markets.
