Growth stocks led a market retreat as several high-profile names broke key support levels, while index futures eased. According to Investor’s Business Daily, the Dow eked out a small gain Tuesday even as the Nasdaq fell and many high-valuation leaders tumbled.
Futures dip and earnings in focus
Dow Jones futures slipped 0.1% vs. fair value, while S&P 500 futures lost 0.2% and Nasdaq 100 futures fell 0.3%. IBD noted that overnight futures action doesn’t always translate to the next regular session.
After the close, Toll Brothers narrowly topped fiscal Q3 views, though delivery guidance was light, sending shares slightly lower late. Target and Lowe’s are set to report early Wednesday, with Walmart due Thursday morning and Lowe’s following Home Depot’s results released before Tuesday’s open.
Sector moves and macro markers
Homebuilders, some medicals and retail names showed relative strength, with financials and travel generally holding recent gains. The Invesco S&P 500 Equal Weight ETF rose 0.5%. U.S. crude fell 1.7% to $62.35, the lowest close since May 30, while the 10-year Treasury yield declined four basis points to 4.30%.
Growth sell-off hits leaders and ETFs
The broader market action was mixed, but selling concentrated in growth. The S&P 500 fell 0.6% and the Nasdaq dropped 1.5%, while the Russell 2000 lost 0.8%. Palantir sank 9.35% and Credo plunged 10.5%, both breaking below their 21-day moving averages. AppLovin slid 5.9%, holding the 21-day but sitting under a buy point. Oracle fell 5.8%, undercutting its 21-day and just slipping below the 10-week line. GE Vernova shed 3.5%, and AMD retreated 5.4%, both below their 21-day lines.
Many of Tuesday’s growth losers continued to slide overnight, with Palantir and Credo edging toward their 50-day lines. Among ETFs, Innovator IBD 50 ETF dropped 4.5%, closing below its 21-day for the first time since the April 22 follow-through day. The iShares Expanded Tech-Software ETF lost 2.6% and is decisively below the 50-day; Palantir and Oracle are its two largest positions with AppLovin also included. The VanEck Semiconductor ETF fell 2%, with AMD and Micron significant holdings.
ARK Innovation ETF slid 4% and ARK Genomics ETF lost 3.5%. SPDR S&P Metals & Mining fell 2.1%. SPDR S&P Homebuilders gained 1.5%. Health Care Select Sector rose 0.6%, with Insulet a small holding. Industrial Select Sector and Financial Select SPDR each rose 0.2%.
