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- Core PCE data from the US show that monthly inflation came in below expectations.
- Downwardly revised consumer spending data and first-quarter GDP growth earlier in the week have traders worried.
- UiPath and Salesforce decline due to lower growth.
- Dell, MongoDB, and CrowdStrike are pessimistic about routing.
A number of leading technology stocks fell late this week, giving the Nasdaq a reason to decline.
Three tech companies flipped on Thursday: Crowd Strike (CRWD), PATH And Sales Force (CRM).
Then on Friday, Dale (Dale) and Mongo D.B (MDB) Declined pre-market after unpopular earnings releases.
The market is generally dealing with the first quarter GDP number being revised downward for the US economy as well as lower data on consumer spending. This data appears to be in line with the Fed already ushering in interest rate cuts, but then core personal consumption expenditures (PCE) data on Friday showed core inflation drifting to 0.2% m/m, below consensus. .
The Nasdaq fell 1.08% on Thursday but rose somewhat due to the pre-market PCE release on Friday.
Stock Market News: CRWD, PATH, CRM, DELL, MDB
CrowdStrike stock fell 9.6% on Thursday but rebounded somewhat in the premarket on Friday. The company announced a partnership with Cloudflare for Zero Trust technology. Bulls are looking forward to the quarterly results on June 4.
UiPath beat Wall Street earnings and revenue expectations on Thursday, but collapsed 34% after announcing a surprise CEO change. Both Keybanc and Bank of America downgraded the automation software company due to slowing growth. Management provided guidance for revenue to rise by 7.6% in 2025 instead of the 19.1% previously mentioned.
Salesforce (CRM) stock fell 19.7% on Thursday after the leading customer relationship management software provider missed consensus on its earnings and sales. Jefferies, Mizuho and Morgan Stanley all lowered their price targets for the stock, but gave somewhat optimistic forecasts for the future, relegating the current distress to temporary status. CRM’s performance on Thursday was the worst in 16 years.
Dell’s sell-off was surprising. DELL shares lost more than 5% on Thursday and fell another 17% in premarket trading on Friday. It beat the consensus for quarterly earnings by 1% but beat the consensus on revenue to $22.2 billion. One reason is that the AI server backlog fell $1 billion below expectations but is still at $3.8 billion. The other reason is that gross margin is expected to decline by 150 basis points in the coming quarters.
MongoDB lost more than 7% on Thursday and fell 24% in the premarket on Friday. Despite beating the Wall Street consensus, MongoDB lost weight on its Q2 outlook. Management said revenue should reach $462 million, below the consensus of $471 million. Earnings per share are also expected to fall below the consensus of $0.57, reaching between $0.46 and $0.49.
Nasdaq FAQs
NASDAQ is a US-based stock exchange that began its life as an electronic stock pricing machine. Initially, the Nasdaq only provided over-the-counter (OTC) stock quotes, but it later became an exchange as well. By 1991, the Nasdaq had grown to represent 46% of the total US stock market. In 1998, it became the first exchange in the United States to offer online trading. The Nasdaq also produces several indices, the most comprehensive of which is the Nasdaq Composite Index, which represents all of the 2,500-plus stocks in the Nasdaq, the Nasdaq 100.
The Nasdaq 100 is a large-cap index consisting of 100 non-financial companies from the Nasdaq Stock Exchange. Although it includes only a small portion of the thousands of stocks on the Nasdaq, it represents more than 90% of the movement. Each company’s impact on the index is market capitalization weighted. The Nasdaq 100 includes companies largely focused on technology although it also includes companies from other industries and from outside the United States. The Nasdaq 100 has averaged an annual return of 17.23% since 1986.
There are a number of ways to trade the Nasdaq 100. Most retail brokers and spread betting platforms offer bets using Contracts for Difference (CFD). For long-term investors, exchange-traded funds (ETFs) trade like stocks that mimic the movement of an index without the investor needing to buy all 100 component companies. An example of an ETF is the Invesco QQQ Trust (QQQ). Nasdaq 100 futures allow traders to speculate on the future direction of the index. Options provide the right, but not the obligation, to buy or sell the Nasdaq 100 Index at a specified price (strike price) in the future.
There are many different factors that drive the Nasdaq 100, but primarily it is the overall performance of the component companies revealed in the company’s quarterly and annual earnings reports. US and global macroeconomic data also contribute to their impact on investor sentiment, which if positive leads to gains. The level of interest rates, which is set by the Federal Reserve, also affects the Nasdaq 100 because it affects the cost of credit, which many companies rely on heavily. As such, the level of inflation can also be a key driver as well as other metrics that influence the Fed’s decisions.
Nasdaq Forecast
The Nasdaq moved below the 9-day exponential moving average (EMA) on Thursday, for the first time since May 1. This could signal a decline in business, although Friday’s inflation news could lead to a rebound.
The Moving Average Convergence Divergence (MACD) indicator is displaying a potential crossover that would herald a downtrend as well. If the downtrend arrives over the next week, expect the NASDAQ to find a foothold between 16,000 and 16,250. This is the area where the indicator spent a lot of time.
A decline wouldn’t be surprising given that the Nasdaq just hit 17,000 for the first time ever earlier this week. In other words, consolidation appears to be in line with expectations.
Nasdaq daily chart
