After some steep selling, major indexes tried to claw back at the close Thursday, but didn't make it all the way back as a number of growth stocks were hammered. Among the losers on the stock market today was Reddit, which exemplified the carnage seen among top-performing growth companies.
At the close, the Nasdaq composite pared an early loss of more than 1.2% down to less than 0.5% at the close. Cybersecurity software firms dropped hard as Palo Alto Networks, down more than 2% at one point, tested a 197.74 pivot point in a narrow cup with handle.
After dropping back below the key 20,000 level, the Nasdaq fell just short of that mark.
Palo Alto pared its loss to just 0.6% at the close, and semiconductor firms rose to buffer the decline.
The S&P 500 trimmed its loss from around 1% to 0.4%. Yet the Dow Jones Industrial Average cooled off 1% and remained closer to session lows. At one point, it slid as many as 670 points, or more than 1.5%.
One negative chart development: The Dow industrials slid sharply below their rising 21-day exponential moving average, a critical short-term technical level that had offered support earlier this year.
Trading as low as 43,950 on Thursday, the Dow looks poised for a critical test of support at the 50-day moving average, which has flattened and sloped ever so slightly downward.
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Small Caps Down; Investors Move To Bonds
Small caps on the Russell 2000 were off nearly 0.9%.
Volume remained mixed. Turnover jumped 8% on the New York Stock Exchange vs. the same time on Wednesday but fell around 10% on the Nasdaq. Decliners beat advancers on the NYSE 4-to-3. On the Nasdaq, decliners held a wider margin of 5-to-3.
Meanwhile, investors moved more cash into long-dated government bonds. The yield on the 10-year Treasury note edged three basis points lower to 4.49%. That level is barely within the Federal Reserve's target fed funds rate of 4.25%-to-4.5%.
West Texas Intermediate crude oil rose 0.4% to $72.53 a barrel, but oil has been trailing other commodities, including gold and copper, in terms of gains in 2025.
3:33 p.m. ET
Reddit Falls Hard On Stock Market Today
Reddit, which sells the content and data on its online community platforms to artificial intelligence players, fell to as low as 171.31 and easily slumped below its rising 50-day line on a daily chart as well as its 10-week moving average.
The big drop through both key technical levels constituted a timely sell signal to nail down profits. Reddit's gain from a breakout past a 69.11 prime buy point in a cup with handle is still a healthy 148%.
China-based companies rallied en masse following results from another retail giant, Alibaba. Alibaba was off an intraday high of 144.51 but still rallied 9% in heavy trading.
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Hasbro Jumps, CrowdStrike Flops
Elsewhere, Hasbro vaulted 13% in nearly six times its normal volume. The toy maker reported a 21% jump in fourth-quarter profit to 46 cents a share.
Hasbro was a rare name in the stock market in the sense that it also staged a breakout, or an attempt to jump out of a bullish chart pattern and run to new highs. Shares moved past a 67.83 buy point in a four-month, lopsided double-bottom base. The 5% buy zone goes up to 71.22.
Going back to the cybersecurity space, CrowdStrike, a key player in IBD's security software industry group, fell more than 7% at one point in volume running nearly twice its 50-day average.
The stock on Jan. 28 cleared a 389 buy point in a flat base that sits inside a larger consolidation. However, CrowdStrike has also staged a nice bounce off the 21-day exponential moving average, currently at 417.82.
MarketSurge and other chart services can be used to plot a 21-day line, which can help investors gauge the performance of a stock that has broken out of a good base and has hit 52-week or all-time highs.
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2:08 p.m. ET
Carnage Among Growth Stocks In Stock Market Today
Some consumer-related growth-stock leaders got pummeled. Carvana plunged in heavy volume following a solid fourth-quarter report, with earnings at 56 cents a share and sales hitting $3.55 billion, up 46%. The stock tested the 50-day moving average. Carvana also spilled more than 7% below a buy point of 268.34, forcing new buyers to cut losses short.
DoorDash dropped in rapid turnover and staged its biggest one-day decline since a September breakout past a cup-with-handle entry at 131.21. Such a drop can serve as a signal to take at least some profits. DoorDash is a top-performing holding in Leaderboard.
AppLovin sank in volume running more than 150% above normal levels. The advertising platform for mobile apps last week gapped up on robust fourth-quarter results and jumped out of a 10-week base with a 417.63 entry. However, a quick 26% gain has shrunk to just a 5% advance.
Klaviyo, Samsara Take A Pasting
In the enterprise software area, Klaviyo swooned as much as 16% after posting a 22% drop in fourth-quarter earnings to 7 cents a share, even though revenue lifted 34% to $270.2 million. Klaviyo, a software-as-a-service platform for marketers, rebounded back near its 50-day moving average. It's maintaining a trend of higher highs and higher lows since a September breakout past 32.81.
Meanwhile, IoT technology provider Samsara got slammed. At one point, Samsara triggered the loss-cutting sell rule by falling more than 7% below a 57.51 buy point in a nearly three-month cup without handle.
Headed into Thursday's stock market decline, AppLovin, Klaviyo and Samsara all sported a Relative Strength Rating of 90 or higher. Keep in mind that this covers 12 months' of action, not the current moves. The RS Rating works best as a stock screening tool, not as a sell signal to take profits or cut losses.
11:07 a.m. ET
Walmart Cools Off
Walmart posted an 8% rise in revenue for the January-ended quarter and adjusted earnings of 66 cents a share. The global discount retail chain saw total e-commerce sales up 16% while U.S. same store sales rose 4.6%.
The company forecast adjusted operating income to rise 3.5% to 5.5% in constant currencies, perhaps softer than what analysts expected. Walmart noted that the outlook included a "headwind of 150 basis points (1.5%) from the acquisition of Vizio." Vizio is a leading maker of smart TVs.
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Stock Market Movers: Cruise Lines Fall
Some industry groups fell much harder in the stock market than what the equity indexes indicated. Royal Caribbean led a sell-off among cruise ship operators. The leading stock slid in massive turnover.
As noted in Wednesday's Big Picture column, the Nasdaq has closed above 20,000 just four times so far in 2025. Meanwhile, under the surface, high-growth companies that show hefty valuations based on traditional measures such as the price-to-earnings ratio have gotten pounded.
The distribution day count on the Nasdaq also remains elevated, currently at five amid a revolving 25-day cycle.
For the month of February, the S&P 500 headed into Thursday's trading up 1.7%. That follows a 2.7% gain in January. The Nasdaq composite, up 1.6% last month, holds a 2.2% rise so far this month.
The current gains so far contradict recent historical trends. According to the 2025 edition of the Stock Trader's Almanac, in postpresidential election years since the 1970s, February has been the worst month in the stock market for the Nasdaq. It's risen in five postelection years and fallen in eight for an average monthly loss of 3%.
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Alibaba Up In Stock Market Today In Heavy Trade
Alibaba, which has invested heavily in artificial intelligence, jumped in heavy trading. The megacap China stock is sharply extended from a breakout past a cup with handle that displayed a 103.67 entry. The company reported fourth-quarter results Thursday.
Alibaba's rally spread into other Chinese consumer-focused companies, including online retailing leader JD.com, video platform Bilibili.com and video gaming titan Tencent. All three stocks rallied 3% or more. JD is trying to clear a trendline entry near 42.
Also on the upside, Shake Shack bolted higher in big volume. Shares also hopped back above the 50-day moving average, a bullish sign. The stock is building a new base.
The burger chain posted earnings of 26 cents a share in the fourth quarter vs. 2 cents in the year-ago period. Sales rose 15% to $328.7 million. That marked at least the eighth quarter in a row of steady double-digit top-line growth.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
