Stocks fall, set for sharp weekly losses for S&P 500, Nasdaq

U.S. stocks fell on Friday as concerns about a global IT outage eased, while Wall Street looked to recover from a selloff that saw the Dow Jones Industrial Average snap a winning streak and technology continue to slide.

The Dow Jones Industrial Average (^DJI) fell nearly 1%, following a more than 1% decline in the blue-chip index. The S&P 500 (^GSPC) fell 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.8%.

Stocks are facing weekly losses after a volatile set of sessions that saw tech declines, with artificial intelligence-focused chip stocks bearing the brunt. Investors are shifting from the tech heavyweights that fueled the recent rally to smaller companies, which some see as benefiting more from interest rate cuts.

In the early hours of this morning, investors were assessing the potential impact of an “unprecedented” computer system outage across the globe, grounding flights and hitting banks, telecoms and media companies, among others. But concerns eased after CrowdStrike (CRWD) announced a fix for the bug, a botched update that affected Microsoft (MSFT)-based systems.

CrowdStrike shares fell as much as 20% as the outage spread, but pared losses to about 10% by afternoon. Shares of Microsoft, which has been working to resolve issues with its Azure cloud services, fell less than 1%.

Meanwhile, Republican presidential nominee Donald Trump used his nomination speech on Thursday to say he would “end the electric vehicle mandate on day one.” His comment comes as the market wakes up to the “Trump trade” — the implications of his policies on assets if the former president takes over the White House.

Shares of Tesla (TSLA) and other electric vehicle makers fell on Friday, along with the broader market.

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Friday, July 19, 2024 at 6:14 PM GMT+1

Nvidia, Tesla lead Nasdaq 100 losses

The Nasdaq 100 (^NDX) fell to a session low, down nearly 1% on Friday.

Shares of electric vehicle maker Tesla (TSLA) fell more than 4%, while shares of chipmaker Nvidia (NVDA) fell more than 2%.

Other semiconductor stocks also fell, with Intel (INTC) down more than 5% and ASML (ASML) down 3%.

The Nasdaq 100 was down about 1% by 1:00 p.m. ET on Friday.
Friday, July 19, 2024 at 5:30 PM GMT+1

Tesla shares fall 4% after Trump says he will end ‘electric vehicle mandate’

Electric vehicle stocks came under pressure on Friday after former President Donald Trump criticized the Biden administration’s clean energy initiatives, referring to them as the “new green scam” during the Republican convention.

“I will end the electric vehicle mandate on day one, thereby saving the American auto industry from total annihilation, which is happening now, and saving American customers thousands and thousands of dollars per car,” Trump said.

The comments came despite an endorsement from Tesla (TSLA) CEO Elon Musk. Shares of the electric car giant fell as much as 4% on Friday. Shares of Rivian (RIVN) and Lucid (LCID) also fell more than 1%.

The Biden administration does not have an electric vehicle mandate, but critics point to the EPA’s mandate. Car rules aim to cut carbon emissions It was introduced in March as a way to accelerate the mass adoption of electric vehicles.
Friday, July 19, 2024 at 4:51 PM GMT+1

Technology and Consumers Decline in Estimated Lead

Nearly all sectors of the S&P 500 index declined on Friday, with technology stocks (XLK) and consumer discretionary stocks (XLY) leading the declines.

The materials sector (XLB) also fell 1%. All three major averages were in the red by 11:45 a.m. ET.

The healthcare sector (XLV) was the only sector that rose slightly.
Friday, July 19, 2024 at 4:00 PM GMT+1

Netflix shares rise after quarterly results

Netflix (NFLX) shares jumped the most since late January at the open before paring gains after the streaming giant reported better-than-expected quarterly results.

Netflix memberships grew 34% quarter-over-quarter, helped in part by the removal of the Basic plan in some markets.

Netflix shares rose as much as 3% in early trading before giving up those gains.
Friday, July 19, 2024 at 3:16 PM GMT+1

CrowdStrike stock drops 10% after global IT outage

CrowdStrike (CRWD) shares fell as much as 10% on Friday after an “unprecedented” computer systems failure that affected everything from airlines to hospitals.

Early Friday, CrowdStrike CEO George Kurtz said the bug had been fixed.

On the X social media platform, Kurtz wrote, “CrowdStrike is actively working with customers affected by a flaw found in a single content update for Windows hosts.”
Friday, July 19, 2024 at 2:32 PM GMT+1

Stocks were little changed after a worldwide IT outage.

Stocks were little changed Friday as more details emerged about a global IT outage. Wall Street struggled to recover from a selloff that left all major averages in the red on Thursday.

The Dow Jones Industrial Average (^DJI) fell 0.2% after falling more than 1% in the previous session.

The S&P 500 (^GSPC) is hovering around the flat line, while the tech-heavy Nasdaq Composite (^IXIC) is down 0.2%.

Investors spun technology stocks this week as AI-focused chip stocks led the way lower.

Early this morning, investors were assessing the impact of an “unprecedented” failure of computer systems running CrowdStrike (CRWD) and Microsoft (MSFT)-based platforms.

CrowdStrike CEO George Kurtz said the bug has been fixed. “CrowdStrike is actively working with customers affected by the bug in a single content update for Windows hosts,” he said.
Friday, July 19, 2024 at 1:26 PM GMT+1

Off the Phone with: American Express CEO

Another strong quarter will see American Express (AXP) increase its marketing budget by $800 million this year to $6 billion, CEO Stephen Squeri told me over the phone.

He also said whether he was thinking more cautiously about the second half of the year because of the elections:

“If I was more cautious, I wouldn’t have raised the guidance. I wouldn’t have increased the marketing and so on. I think we’re going to be consistent and I think that’s the key point here. The Fed is going to do what the Fed is probably going to do in September, and I’m certainly not going to raise rates, and they’re probably going to be lowered again before the end of the year, and I think we’ll see what happens in the November election, which I don’t think anybody has any idea about, and the fact is this company has been around for 174 years with 30 presidents — we’re going to get whatever we need to get.”
Friday, July 19, 2024 at 10:54 AM GMT+1

In other news…

In news unrelated to Trump’s speech at the Republican National Committee, Hulk Hogan Ripping his shirt off at this event Moments ago, a CrowdStrike (CRWD) outage wreaked havoc on life (and its stock price) this morning…

We got Netflix earnings last night, which Yahoo Finance’s Alexandra Canal breaks down here. The stock was down a bit in premarket, with some concern over third-quarter subscriber guidance.

Here’s what Brent Thiel, a technology analyst at Jefferies, had to say on this front:

We do not believe [guidance is a problem]Given the massive growth over the past 12 months from password sharing (+39M net adds), the slowdown in sub-segment growth should come as no surprise. It’s worth noting that the 8M net adds in Q2 was the strongest second quarter the company has reported except for Q2 2020. We expect sub-segment growth to accelerate in Q4 to 7.7M net adds given the content slate (Squid Game S2 and NFL Games) and better seasonality in Q4 vs. Q3.”

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