Dow Jones futures showed minimal changes in after-hours trading, while S&P 500 futures and Nasdaq futures witnessed a modest rise. This comes as Broadcom (AVGO) and Costco Wholesale (COST) released their earnings late on Thursday.
Unraveling the Dynamics of After-Hours Market
Broadcom's Earnings Surge
Broadcom's earnings exceeded fiscal Q4 expectations, with just a slight miss in revenue. The AI chip and software giant provided solid guidance for fiscal Q1 and increased its dividend by 11%. As a result, Broadcom stock soared 12% in extended trading, indicating a potential breakout. In Thursday's regular session, AVGO stock fell 1.4% to 1347.34. This significant move showcases the impact of earnings on the stock's performance.Taiwan Semiconductor (TSM), which makes chips for Nvidia, Broadcom, and many others, also saw some movement. Overnight, TSM rose slightly, but on Thursday, it stepped back 1.3% to 191.46, just below the 50-day line. It now has a 210.63 handle buy point in a consolidation just above a prior base.
Costco's Earnings and Market Impact
Costco's earnings beat expectations, while sales were in line with some estimates and missed others. COST stock wavered in overnight trade and edged down 0.6% to 988.39 on Thursday, just below record highs and modestly extended from a prior base. This shows how even a company with solid earnings can face some market volatility.The stock market rally, which had been showing strength, saw modest losses on the major indexes on Thursday. The Dow Jones Industrial Average fell 0.5%, the S&P 500 index dropped 0.7%, and the Nasdaq composite gave up 0.7% after hitting an all-time high on Wednesday. The small-cap Russell 2000 slumped 1.4%, indicating a more significant pullback among smaller stocks.
Market Rally and Leading Stocks
The stock market rally is still in good shape, with the Nasdaq at record highs. However, Thursday was a relatively quiet session, with not many stocks flashing new buy signals apart from Arm. Some stocks are in buy range, while others are setting up in emerging bases or pullbacks, such as Fortinet (FTNT) and Goldman Sachs (GS). Many leaders are simply extended, showing the need for careful analysis and selection.Among super-hot extended names, Palantir Technologies (PLTR) climbed 0.95% and AppLovin (APP) sank 3.55%. Microsoft stock edged up 0.1% to 449.56, moving toward a 468.35 consolidation buy point. U.S. crude oil prices dipped 0.4% to $70.02 a barrel, and the 10-year Treasury yield rose five basis points to 4.32%, up 17 basis points so far this week. These economic indicators can have a significant impact on the market and leading stocks.
ETF Market Performance
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) shed 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 0.9%, with Microsoft, Adobe, Palantir stock, and AppLovin all being key members. The VanEck Vectors Semiconductor ETF (SMH) declined 1%. Nvidia is the No. 1 SMH component, along with Taiwan Semiconductor stock and Broadcom. Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 1.4% and ARK Genomics ETF (ARKG) tumbled 3.75%. Tesla stock is a significant holding across Ark Invest's ETFs, with Cathie Wood's Ark also building up a big NVDA stake. SPDR S&P Metals & Mining ETF (XME) stepped down 2.3%, SPDR S&P Homebuilders ETF (XHB) lost 0.95%, the Energy Select SPDR ETF (XLE) slipped 0.7%, and the Health Care Select Sector SPDR Fund (XLV) shed 0.8%. The Industrial Select Sector SPDR Fund (XLI) sank 0.6%, and the Financial Select SPDR ETF (XLF) dropped 0.4%.In conclusion, the after-hours market and earnings reports have had a significant impact on various stocks and ETFs. It is crucial for investors to stay vigilant and analyze the market carefully to make informed decisions.
