Dow Jones futures showed a modest rise overnight, accompanied by slight gains in S&P 500 and Nasdaq futures. However, the stock market rally, which began the year on a positive note, encountered significant fluctuations. After early gains, major indices closed lower on Thursday, continuing a trend from the previous year. Despite this, the Nasdaq managed to close above its critical 50-day moving average after briefly dipping below it.
Tesla and Apple Face Setbacks
Tesla (TSLA) and Apple (AAPL) both faced sharp declines, contributing to the overall market pullback. Negative news surrounding these two tech giants pushed their stock prices down, adding pressure to the broader market. In contrast, Nvidia (NVDA) saw a slight uptick, though it remained below an important resistance level.
Strong Buy Signals Amid Market Struggles
Despite the challenging market conditions, several stocks showed promising signs of growth. Meta Platforms (META), Cloudflare (NET), Vistra (VST), Talen Energy (TLN), and Taiwan Semiconductor (TSM) all presented potential buy signals on Thursday. However, experts caution that now may not be the best time to make significant investments, given the current market instability.
Nvidia and Meta Platforms are featured on the IBD Leaderboard, with Tesla included in the Leaderboard watchlist. Cloudflare and Taiwan Semiconductor are on the IBD 50, with Cloudflare also making the IBD Big Cap 20 list.
Stock Market Performance: A Volatile Start to 2025
The stock market rally struggled to maintain its early momentum as the major indices turned lower after an initial surge. The Dow Jones Industrial Average dropped 0.4%, while the S&P 500 and Nasdaq Composite each lost 0.2%. The Russell 2000, which tracks small-cap stocks, managed a slight 0.1% gain, though it ended well off its highs.
The Nasdaq briefly dipped below its 50-day moving average but ultimately closed above it, offering a glimmer of hope for investors. However, the S&P 500 reversed course after testing its 50-day line early in the session.
Key Stock Moves: Apple and Tesla Struggle
Apple’s stock took a 2.6% hit, closing at 243.85. This put it below its 21-day moving average and closer to its 50-day line at 237.49. The company also announced temporary iPhone discounts in China, amid growing competition in the region. Additionally, UBS lowered its sales estimates for Apple, citing weak iPhone demand.
Tesla’s stock also contributed to the broader market’s decline, adding pressure to the S&P 500 and Nasdaq.
Meta Rebounds Amid Market Volatility
In contrast, Meta Platforms saw a strong intraday rebound, jumping to 604.91 before settling at 599.24—up 2.3%. This positive movement came after the stock reclaimed its 50-day moving average and broke through a key trendline, providing some relief to investors.
Other Leading Stocks Show Promise
Several other stocks posted solid gains, including Cloudflare, Vistra, Talen Energy, Taiwan Semiconductor, Interactive Brokers (IBKR), Spotify (SPOT), and Kinetik Holdings (KNTK). However, sustaining these gains will be difficult if market conditions remain volatile.
Economic Indicators: Oil and Treasury Yields
U.S. crude oil prices rose by 2% to $73.13 per barrel, marking the highest close since October 14. Meanwhile, the 10-year Treasury yield remained largely unchanged at 4.57%, after briefly falling to 4.53% in the morning and rising to 4.6% in the afternoon.
Performance of Growth ETFs
Several growth-focused ETFs also saw mixed results. The Innovator IBD 50 ETF (FFTY) gained 1.3%, while the iShares Expanded Tech-Software Sector ETF (IGV) slipped 0.2%. The VanEck Vectors Semiconductor ETF (SMH) rose 1.1%, benefiting from strong performances by Nvidia and Taiwan Semiconductor.
The ARK Innovation ETF (ARKK) edged up 0.2%, while the ARK Genomics ETF (ARKG) surged by 3.9%. Tesla and Nvidia are major holdings in these ETFs, with Cathie Wood’s Ark Invest also maintaining significant stakes in both.
Sector ETFs Show Mixed Results
Sector-specific ETFs displayed varying levels of performance. The SPDR S&P Metals & Mining ETF (XME) bounced back by 1.55%, while the SPDR S&P Homebuilders ETF (XHB) dropped by 1%. The Energy Select SPDR ETF (XLE) advanced by 1.2%, and the Health Care Select Sector SPDR Fund (XLV) remained almost flat.
In contrast, the Industrial Select Sector SPDR Fund (XLI) fell by 0.35%, and the Financial Select SPDR ETF (XLF) retreated by 0.25%.
