U.S. stocks fell on Friday as details about the global IT outage slowly emerged and major stock indexes failed to recover from a sell-off, with the Dow Jones Industrial Average halting gains.
The S&P 500 (^GSPC) fell 0.7% and the tech-heavy Nasdaq Composite Index (^IXIC) dropped 0.8%, both posting their worst weeks since April for the Nasdaq and S&P 500. The Dow Jones Industrial Average (^DJI) fell almost 1%.
Stocks fell after a volatile few days, with tech stocks falling sharply, especially AI-focused semiconductor stocks, as investors shifted money away from the big tech stocks that have driven the recent rally and towards smaller stocks that are seen as better positioned to benefit from lower interest rates.
Investors were assessing the potential impact of an “unprecedented” computer system outage that grounded flights around the world and hit banks, telecommunications companies, media companies and others in the early hours of the morning, but concerns were eased after CrowdStrike (CRWD) said it had fixed the glitch, a botched update that affected Microsoft (MSFT)-based systems.
CrowdStrike shares plunged 20% as the outage spread but have since pared back to 11%. Microsoft shares, which was working to resolve issues with its Azure cloud services, fell less than 1%.
Meanwhile, Republican presidential nominee Donald Trump said in his nomination speech on Thursday that he would “end the electric vehicle mandate on day one.” His comments come as markets are starting to wake up to the “Trump trade” — the impact his policies would have on assets if the former president were in the White House.
More earnings are due next week, including quarterly results from beverage giant Coca-Cola (KO), delivery service UPS (UPS) and electric vehicle maker TSLA (TSLA), giving investors another glimpse into the state of consumers and the economy.
Live broadcast ended12 updates
Friday, July 19, 2024, 1:04 PM PDT
S&P 500 and Nasdaq fall this week as tech stocks tumble
The S&P 500 (^GSPC) finished its worst week since April due to a sell-off in technology stocks.
The Nasdaq Composite Index fell 0.7% on Friday, bringing its weekly decline to about 2%. The tech-heavy Nasdaq Composite Index (^IXIC) fell 0.8%.
The Dow Jones Industrial Average (^DJI) fell about 1% on Friday but still ended the week in positive territory.
Technology stocks led the sell-off as investors continued to pull out of the sector, with semiconductors coming under pressure again and ending the week with a big drop.
Investors on Friday assessed the impact of an “unprecedented” outage in computer systems that run on CrowdStrike (CRWD) and Microsoft (MSFT)-based platforms. The global IT outage affected numerous organizations, including airlines and hospitals. CrowdStrike CEO George Kurtz said the outage has been fixed.
More earnings announcements are due to begin next week, with snack and beverage giant Coca-Cola (KO), delivery service UPS (UPS), and electric vehicle maker Tesla (TSLA) scheduled to report their quarterly results.
Friday, July 19, 2024 at 12:30 PM PDT
Crude oil fell 3%, erasing gains earlier in the week.
Crude oil fell 3%, giving up gains from earlier in the week.
West Texas Intermediate (CL=F) closed at $80.13 a barrel, while international benchmark Brent crude (BZ=F) fell to just above $82.63 a barrel.
A stronger dollar and unclear details of a stimulus package for China, the world’s biggest oil consumer, pressured oil futures on Friday.
Oil prices rose earlier this week after U.S. crude oil inventories fell more than expected.
Friday, July 19, 2024, 11:45 a.m. PDT
Bitcoin surges to $66,000 per token
As other asset classes fell on Friday, Bitcoin (BTC-US) rose more than 4% to hover around $66,000 per token.
Crypto stocks also rose during the session, with Riot Platforms (RIOT), MicroStrategy (MSTR) and Coinbase (COIN) each rising at least 10%.
Friday, July 19, 2024 at 11:00 AM PDT
Semiconductor stocks fall again, set to end weekend with big losses
Semiconductor stocks fell on Friday and are on track to end the week in the deep red.
Nvidia (NVDA) fell more than 2% during the session, and the AI giant is on track to end the week with a loss of more than 8%.
Semiconductor equipment maker ASML (ASML) also fell on Friday and is on track to add to its 17% decline over the past five sessions.
The sell-off in semiconductor stocks began in earnest earlier this week as geopolitical headwinds began to blow, raising investor concerns over reports of possible tighter U.S. restrictions on exports of semiconductor technology to China.
Former President Donald Trump’s recent comments about Taiwan, a major semiconductor manufacturing hub, in an interview with Bloomberg also helped fuel the selloff.
Chip losses in the last five sessions as of 1:45 p.m. Friday
Friday, July 19, 2024 at 10:14 AM PDT
Nvidia and Tesla lead Nasdaq 100 decline
The Nasdaq 100 (^NDX) fell about 1% on Friday, hitting a session low.
Shares of electric vehicle maker Tesla (TSLA) fell more than 4%, while 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 p.m. ET on Friday.
Friday, July 19, 2024, 9:30 a.m. PDT
Tesla shares fall 4% after President Trump says he will repeal the electric vehicle mandate
Electric vehicle stocks fell on Friday after former President Donald Trump criticized the Biden administration’s clean energy plan at the Republican National Convention, calling it a “new green scam.”
“I will end the electric vehicle mandate on day one, save the American auto industry from the total destruction that is currently happening, and save American customers thousands of dollars per car,” President Trump said.
The comments came despite an endorsement from Tesla (TSLA) CEO Elon Musk. Shares of the EV giant fell as much as 4% on Friday. Rivian (RIVN) and Lucid (LCID) also fell more than 1%.
The Biden administration has not instituted an EV mandate, but critics point to the Environmental Protection Agency’s auto regulations introduced in March aimed at reducing carbon emissions as a way to speed up mass adoption of EVs.
Friday, July 19, 2024 at 8:51 AM PDT
Technology and consumer discretionary led the decline
Nearly every sector in the S&P 500 fell on Friday, with technology (XLK) and consumer discretionary (XLY) stocks leading the decline.
The materials sector (XLB) also fell 1%. All three major stock averages were down by 11:45 a.m. ET.
Only the Healthcare (XLV) sector was up slightly.
Friday, July 19, 2024 at 8:00 AM PDT
Netflix shares rise after quarterly earnings
Shares of Netflix (NFLX) surged at the start of trading by the most since late January, but pared gains after the streaming giant reported better-than-expected quarterly results.
Netflix membership grew 34% quarter-over-quarter, driven by the discontinuation of its basic plan in some markets.
Netflix shares rose 3% at the start of trading but later gave up the gains.
Friday, July 19, 2024 at 7:16 AM PDT
CrowdStrike drops 10% due to global IT outage
CrowdStrike (CRWD) shares fell as much as 10% on Friday following an “unprecedented” outage of computer systems that affected everything from airlines to hospitals.
CrowdStrike CEO George Kurtz said early Friday that the glitch had been fixed.
On social media platform X, Kurtz wrote that “CrowdStrike is actively working with customers affected by the flaw found in a single content update for Windows hosts.”
Friday, July 19, 2024 at 6:32 AM PDT
Stock prices remain almost unchanged after global IT outage
Stocks were little changed on Friday as details emerged about the global IT outage, with Wall Street struggling to recover from selling pressure that sent major stock indexes lower on Thursday.
The Dow Jones Industrial Average (^DJI) fell 0.2% after losing more than 1% in the previous trading day.
The S&P 500 (^GSPC) was within striking distance, while the tech-heavy Nasdaq Composite Index (^IXIC) fell 0.2%.
Investors have been pulling out of tech stocks this week, leading to declines in AI-focused chip stocks.
Earlier this morning, investors were assessing the impact of an “unprecedented” outage in computer systems that run on CrowdStrike (CRWD) and Microsoft-based (MSFT) platforms.
CrowdStrike CEO George Kurtz said the company has a fix for the flaw, saying, “CrowdStrike is actively working with customers affected by the flaw found in a single content update for Windows hosts.”
Friday, July 19, 2024 at 5:26 AM PDT
Phone interview with the CEO of American Express
American Express (AXP) had another strong quarter this year and plans to increase its marketing budget by $800 million to $6 billion, CEO Steven Squeri said on the call.
Asked whether the election had made him think more cautiously about the second half of the year, he said:
“If we had acted more cautiously, we wouldn’t have raised our guidance or increased our marketing or whatever. I think we’re just going to be consistent and I think that’s the key point here. The Fed is probably going to do what they’re going to do in September. I’m certainly not going to raise rates. They’re probably going to lower rates and they’ll probably lower them again by the end of the year. I think that’s going to help bolster consumer confidence. No one knows what’s going to happen with the November election, but I think we’ll wait and see what happens. The fact is, this company has been around for 174 years and with 30 presidents. We’ll get through whatever it takes.”
Friday, July 19, 2024 at 2:54 AM PDT
In other news…
In news unrelated to President Trump’s Republican National Convention speech, Hulk Hogan ripped off his shirt at the event and this morning a CrowdStrike (CRWD) outage wreaked havoc on lives (and their stock price)…
Netflix reported earnings last night, and Yahoo Finance’s Alexandra Canal has more details here. The company’s shares were down slightly in pre-market trading amid some concerns about its third-quarter subscriber guidance.
On this point, Jefferies technology analyst Brent Till said:
“we [guidance is a problem]Given the strong growth from password sharing over the past 12 months (+39M net adds), the slowdown in subscriber growth is not surprising. It’s worth noting that Q2’s 8M net adds were the highest Q2 quarter the company has reported outside of Q2 2020. Given its content slate (Squid Game S2, NFL Games) and greater seasonality in Q4 than Q3, subscriber growth is expected to accelerate to 7.7M net adds in Q4.
Makes sense to me.