Jamie Spencer
Dow Jones futures edged higher early Thursday, alongside gains in S&P 500 and Nasdaq futures. Despite beating earnings expectations, Arm Holdings (ARM) fell overnight after reclaiming a buy point. Meanwhile, Roblox (RBLX) plunged 30% due to weak daily active user metrics.
Stock Market Resilience Amid Google’s Weak Cloud Revenue
The broader stock market rally held firm despite Alphabet (GOOGL) sliding on disappointing cloud revenue and aggressive capital spending plans. However, Google’s massive $75 billion capex budget was seen as bullish for AI chipmakers.
In regular trading, Nvidia (NVDA), Arm Holdings, Taiwan Semiconductor (TSM), Broadcom (AVGO), and Marvell Technology (MRVL) all posted solid gains. However, AMD (AMD) declined sharply, weighed down by weak data-center revenue.
Market Movers: Tesla Falls, BYD Surges
Tesla (TSLA) continued its recent decline, hitting its lowest close in months. The EV giant extended losses early Thursday, while BYD (BYDDF), its Chinese competitor, soared on new self-driving technology developments.
Meanwhile, Roblox stock crashed 30% after missing expectations on key user engagement metrics. Prior to the drop, RBLX had been trading at its highest levels in nearly three years.
Dow Jones Futures and Economic Data
Dow Jones futures climbed 0.1%, S&P 500 futures rose 0.2%, and Nasdaq 100 futures inched higher. The 10-year Treasury yield ticked up to 4.45%.
At 8:30 a.m. ET, investors will watch for the latest Q4 productivity data and weekly jobless claims from the Labor Department.
Stock Market Rally Gains Momentum
The major indexes closed near session highs on Wednesday:
- The Dow Jones Industrial Average rose 0.7%
- The S&P 500 gained 0.4%
- The Nasdaq composite edged up 0.2%
- The Russell 2000 jumped 1.1%, breaking above its 50-day moving average
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.5%, while the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) surged 1.1% to its highest close since December.
AI Chip Stocks in Focus
Arm Holdings topped earnings expectations but issued in-line guidance for the current quarter. ARM stock initially tumbled overnight but pared losses by Thursday morning. On Wednesday, shares surged 6.8%, reclaiming a buy point at 164.16.
Other AI chip stocks also posted strong gains:
- Nvidia (NVDA): +5.35%, back above the 200-day moving average
- Broadcom (AVGO): +4.3%, working toward a 251.88 buy point
- Taiwan Semiconductor (TSM): +2.2%, rebounding from its 50-day line
- Marvell Technology (MRVL): +6.2%, recovering above key levels
Meanwhile, AMD fell 6.3% on weak data-center revenue, touching its lowest levels since late 2023.
What’s Next for Investors?
The stock market rally remains intact, with major indexes nearing record highs. However, the Nasdaq remains closer to its 50-day moving average, and small caps are still playing catch-up.
With earnings season in full swing, traders should remain cautious when making new buys, as the market remains susceptible to volatility driven by economic data and corporate results.
Conclusion
The stock market continues to show resilience despite mixed earnings reports. While AI chip stocks remain a bright spot, Tesla and AMD struggles highlight sector-specific risks. Investors will be watching economic data and earnings reports closely as the rally moves forward.
