In the early hours before Tuesday's stock market open, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, showed a slight downward trend. This set the stage for a day of market activity where stock market leaders such as AppLovin (APP), Cava (CAVA), MicroStrategy (MSTR), and Palantir Technologies (PLTR) experienced sharp sell-offs. Meanwhile, Nvidia (NVDA) fell to a crucial support level.

Artificial Intelligence Giant Oracle's Plunge

Oracle (ORCL), an artificial intelligence giant, tumbled more than 6% in extended trading after missing earnings and sales estimates on Monday. If this weakness persists into Tuesday morning, Oracle shares are likely to open at their 50-day line. Other key earnings movers like C3.ai (AI) and MongoDB (MDB) also saw significant movements. C3.ai shares surged nearly 14%, and MongoDB stock jumped 9.5% in extended trading.

Later in the Week: Earnings Releases and Inflation Reports

Later in the week, Adobe (ADBE) and Costco Wholesale (COST) are scheduled to release their earnings results. Additionally, inflation reports will be in focus. Wednesday is expected to bring the consumer price index, and Thursday will see the producer price index. These reports offer a preview of the core personal consumption expenditures or PCE price index, which is regarded as the Fed's primary inflation gauge and is due on Dec. 20.

Stock Market Today: Nvidia's Slide

On Monday, the Dow Jones Industrial Average declined by 0.5%, and both the S&P 500 and Nasdaq dropped 0.6%. Nvidia sold off 2.6% on Monday, closing right at the 10-week moving average line. This is a critical level to monitor. A sharp rebound could place Nvidia stock in a new buy zone, while a decisive close below this level would serve as a key sell signal. Tesla (TSLA) ended a volatile session with a slight gain, reaching its highest price since November 2021.

AppLovin, Cava, MicroStrategy, and Palantir's Dive

AppLovin plunged nearly 15% on Monday, snapping a six-day winning streak. The app-monetization company failed to be added to the S&P 500, and Apollo Global (APO) and Workday (WDAY) took its place. Cava dived 12.1%, closing below the 50-day line for the first time since August, with volume nearly 200% above average. Bitcoin stock MicroStrategy tumbled 7.5% as the price of bitcoin traded below $96,600. Palantir reversed from new highs to fall more than 5% even after announcing an expansion of its contract with the U.S. Special Operations Command.

What to Do Now in the Stock Market

Now is a crucial time to refer to IBD's The Big Picture column amid the ongoing stock market action. After Monday's session, make sure to check out today's The Big Picture and the updated exposure level. On Monday's "IBD Live" show, the team discussed the current trading conditions of the stock market rally. The market, especially the Nasdaq, appears stretched even after Monday's fall, but it's not overly concerning at this point. It's a factor to consider when taking profits in extended stocks. An extended Nasdaq increases the risks of new purchases. If the composite continues to pull back, new breakouts are likely to enter negative territory. Many extremely extended hot stocks could suffer sharp losses. IBD MarketSurge's "Breaking Out Today" list is an essential resource for daily breakouts, showing MarketSurge Growth 250 stocks breaking out past buy points. The MarketSurge "Near Pivot" list also highlights stocks nearing buy points in bases. To find more stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20, and Stocks Near A Buy Zone. Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.