The stock market got off to a slow start as the new week began, with indexes posting small losses. However, Amazon.com (AMZN) stock managed to see a boost thanks to some exciting news in the world of artificial intelligence (AI). While the Nasdaq was down 0.2%, the Dow Jones Industrial Average fell 0.4% and the S&P 500 lost 0.2%. These major indexes are still below their 50-day moving averages, indicating some bearish sentiment in the market. The small-cap Russell 2000 did manage to creep up 0.1%, although it too remained below its 200-day moving average.
Volume on the NYSE rose, while the Nasdaq fell compared to the same time on Friday. The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) shed 0.2%. Additionally, the Innovator IBD 50 ETF (FFTY) trimmed 0.3%. Investors are keeping a close eye on the benchmark 10-year Treasury yield, which added 9 basis points to 4.53%. This is the highest level seen in almost 16 years. Inflation data will take the spotlight this week, with the Commerce Department’s personal income and outlays report set to be released on Friday.
One stock that stood out amidst the slight market dip was Amazon. The e-commerce giant saw a 0.6% increase in its stock price following the news that it plans to invest up to $4 billion in artificial intelligence firm Anthropic. This investment will be used to leverage Anthropic’s specialty chips for Amazon’s own AI software. It’s worth noting that Amazon’s stock is currently trading below its 50-day line, after experiencing a sharp drop below the line just last Thursday.
CarMax, a used-car retailer, also experienced a significant boost in its stock price, jumping 1.8%. This increase came after Wedbush upgraded the stock to outperform from neutral and raised its price target to 90 from 85. CarMax is currently in a flat base with an 87.50 buy point. Biotech company AstraZeneca also saw gains, with its stock increasing by 0.6%. This came after Jefferies upgraded the biotech to a buy rating from hold and raised its price target to 80 from 66.50. AstraZeneca’s stock is nearing its 50-day line, where it has faced resistance in the past.
In other news, Hollywood studios and the Writers Guild of America have reached a tentative agreement to end a writers' strike that has lasted nearly 150 days. This development had mixed effects on stocks, with Netflix gaining 0.4% while Walt Disney pulled back 0.5%. Paramount, on the other hand, slid 2.5%. Apparel retailer Urban Outfitters fell 1.3% after being downgraded by Jefferies from buy to hold, with its price target being slashed to 31 from 42. However, the stock did find support above its 200-day moving average and managed to trim some of its losses. Biotech company Morphic lost over 12% in huge volume after being downgraded by BTIG from buy to neutral.
Chinese stocks experienced some pressure as property developer Evergrande announced it was not able to issue new debt due to an investigation into one of its real estate subsidiaries. Chinese electric vehicle (EV) stocks such as NIO and Li Auto also saw significant losses, with NIO selling off over 3% in heavy volume. Bloomberg reported that NIO is looking to raise about $3 billion from Middle East investors, but NIO quickly denied these rumors. Peer Li Auto sank over 9% in heavy trading. Meanwhile, Tesla fell 1.2% and moved further below its 50-day line as it continued to form a cup-with-handle base.
As the market continues to navigate these ups and downs, it’s crucial for investors to stay informed and adapt their strategies accordingly.
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