Apr 23, 2024 (MENAFN via COMTEX) --
(MENAFN - ValueWalk) The markets endured a challenging week last week, as most of the major indexes were down. The Nasdaq Composite was the hardest hit, dropping 5.5% to close the week at 15,282, while the large-cap S&P 500 fell 3% to close below 5,000 at 4,967.
Only the Dow Jones Industrial Average had a positive week, rising three points to 37,986 at the closing bell on Friday. The small-cap Russell 2000 was off 2.7% to 1,948.
What caused the sell-off?
A significant reason why the markets fell last week was due to a major sell-off in the Magnificent Seven stock NVIDIA (NASDAQ:NVDA), which plunged 10% on Friday alone and 13.6% for the entire week.
The semiconductor stock has been leading the market over the past year and a half, fueled by its artificial intelligence-enabled chips. Last year it was up 239%, and in 2024, it has already soared 58% year to date, including last week's sell-off.
There was really no direct catalyst that brought NVIDIA down; rather, it was more related to another AI-fueled stock, Super Micro Computer (NASDAQ:SMCI). The company builds servers and provides storage for high-performance computing and AI data centers.
Supermicro, as the company is called, crashed 23% on Friday after it did not pre-release its fiscal-Q3 revenue results, as it typically has done in recent years during its massive run-up. That decision has led many investors to believe the company's results may not be as good as expected, resulting in the sell-off. Supermicro simply confirmed the date for its next earnings report: April 30.
This news, or lack thereof, not only caused Supermicro stock to tank; it also hurt most AI-related stocks, including NVIDIA, whose chips are used in Supermicro servers.
Big-Tech companies report this week
The markets opened on a positive note on Monday as the S&P 500 and Nasdaq moved higher after the opening bell.
This is a big earnings week for some of the major technology stocks, so investors may be cautiously optimistic about their upcoming results. Most notably, social-media giant Meta Platforms (NASDAQ:META) is due to report on Wednesday while tech behemoth Microsoft (NASDAQ:MSFT) is set to release its quarterly results on Friday.
While analysts are bullish on these two stocks, another Magnificent Seven stock on tap this week, Tesla (NASDAQ:TSLA), has investors feeling jittery.
The automaker had another challenging week last week, as its stock price tumbled 14% and continued dropping on Monday, slipping another 3% in early trading to around $142 per share. Tesla has been facing a string of bad news, as it was reported last week that it was cutting prices on several of its new models. This comes after the company saw a year-over-year drop in cars delivered last quarter.
Tesla also announced a safety recall for its new Cybertruck last week due to issues related to the accelerator pedal getting stuck.
The company is due to report its quarterly earnings on Tuesday after the market close, and based on Monday's trading activity, investors are a bit nervous about what they will hear.
This will indeed be an interesting week for the markets.
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