The Dow Jones Industrial Average sold off nearly 800 points, while the S&P 500 index and the Nasdaq composite also closed sharply lower Thursday, led by heavy losses in artificial intelligence stocks like Nvidia (NVDA) and Palantir Technologies (PLTR), and AI play Tesla (TSLA). Investors continued to assess lofty valuations in the technology sector.
Wall Street's key large-cap indexes finished with their steepest declines since Oct. 10, according to Dow Jones Market Data. Blue chips on the Dow on Thursday were slammed down 1.7%, or 797 points. The S&P 500 also cratered 1.7%, and the Nasdaq tumbled 2.3%. Small-cap stocks were the hardest hit, pushing the Russell 2000 index down by 2.8%.
The S&P 500's consumer discretionary and technology sectors were the index's biggest losers, giving up more than 2% each. All but one of the 11 S&P 500 sectors moved lower, with energy the sole advancer. Bearishly, sellers turned out in numbers as volume rose on the Nasdaq and the New York Stock Exchange compared with Wednesday's trading session.
In the bond market Thursday, the 10-year Treasury yield rose three basis points to 4.11%.
Dow Jones Winners And Losers
Inside the Dow Jones 30 index, Cisco Systems (CSCO) and Nike (NKE) were among the session's top performers, rallying 4.6% and 2.9%, respectively.
On the Dow's downside, Walt Disney (DIS) was the clear loser, giving up nearly 8% following the entertainment industry heavyweight's earnings report.
In the Nasdaq-100 index, bitcoin play Strategy (MSTR) plunged more than 7%, while Palantir sold off more than 6.5%, making them two of the worst stocks of the day. On the upside, Verisk Analytics (VRSK) and Biogen (BIIB) advanced by around 2% apiece.
Six of the Magnificent Seven stocks ended the session lower. The losses left the Roundhill Magnificent Seven (MAGS) exchange traded fund down by more than 2.6%. Nvidia tumbled 3.6%, closing right at the 50-day moving average and just above its 184.48 buy point. Tesla skidded 6.6%, breaching its 50-day line. The sole gainer was Meta Platforms (META), which edged higher.
The Innovator IBD 50 ETF (FFTY) dropped 6.8%. At the same time, Investor's Business Daily's IBD 50 list had several big losers in the session, including Sterling Infrastructure (STRL), Celestica (CLS), SoFi Technologies (SOFI), and Credo Tech (CRDO).
S&P 500, Nasdaq Sell-Off: What To Do Now
Following Thursday's heavy losses on the S&P 500 and Nasdaq, Investor's Business Daily reduced its recommended exposure level to 40%-60%. Meanwhile, both equity indexes breached their 21-day moving averages and closed just above their 50-day lines, key levels to watch.
Many leading stocks, especially on the tech side, have suffered heavy losses and broken down below support levels, triggering crucial defensive sell signals. Those are reasons to remain on the conservative side of the exposure threshold. Have your exit strategies ready in case the market continues lower. Taking profits on the upside and cutting losses on the downside are keys to long-term success in the stock market.
The Nasdaq added a new distribution day Thursday, its third straight, taking its total count to four. The S&P 500 also added a new distribution day, but its Oct. 9 day of selling fell off the count due to time, so its overall count remains unchanged.
IBD MarketSurge's Breaking Out Today list featured two new stocks Thursday, including DT Midstream (DTM). And the Near Pivot list had only five ideas. That's a sign that leading stocks need more time to set up bases following recent heavy losses.
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