Stock indexes wavered throughout the day Thursday in the wake of President Donald Trump's decision to slap import tariffs of 25% on automobiles, but all three key equity indexes finished the session lower. Chip companies suffered, while gold miners continued to flourish as the precious metal touched new highs on the stock market today.
The Dow Jones Industrial Average wavered throughout the day. Blue chips were down, reversed for a gain and then tumbled again. The 30-stock blue chip average finished the day 0.4% lower.
The Nasdaq composite and S&P 500 came off their initial session lows Thursday and inched into positive territory near the close. But the two ultimately finished 0.5% and 0.3% lower, respectively.
Meanwhile, the small-cap S&P 600, down for a third straight session, sank 0.4% lower, dipping just below 1,300. The S&P SmallCap 600 has fallen as much as 20.3% off its peak of 1,559.69. Further, small caps on the Russell 200 dropped 0.4%.
Volume was mixed, falling nearly 13% vs. the same time Wednesday on the Nasdaq and up nearly 7% on the New York Stock Exchange.
In terms of industry group action, discount retail, foreign telecom, commercial loan, agricultural operations, apparel retail and major discount chain stocks touted price-weighted gains of 1% or more.
Meanwhile, IBD's gold and silver mining group has romped 28% higher for the year so far. See the daily and longer-term performance of all 197 industry groups through Wednesday's close at IBD Data Tables.
3:28 p.m. ET
In Dow Jones: Visa Rallies Loud And Proud
On the Dow industrials, at least nine of the 30 components rubbed against the bearish grain of the stock market today with gains of one point or more. They included defensive consumer spending plays such as Visa, Verizon Communications and Procter & Gamble.
Visa, the global credit and debit card transactions titan, recently rebounded back above its 50-day moving average. Shares hit a session high of 350.84, only 5% off its peak of 366.54.
The move back above the 50-day line last week near 339 constituted a follow-on buy point. On a weekly chart, Visa retook its 10-week line near 344 this week, confirming the strength of the current rebound.
Visa quietly led the market Thursday and in recent months. Currently, it's accumulated a 20% profit since breaking out of a narrow cup with handle that offered a 291.04 correct buy point.
Visa cleared that precise entry on Oct. 30, when the company reported earnings. Profits have grown 20%, 12%, 16% and 14% vs. year-ago levels in the past four quarters. Wall Street expects earnings to rise 12% this year to $11.29 a share. The stock also shares an annualized dividend yield of 0.7%.
2:02 p.m. ET
Stock Market Today: Gold Shines, Chips Lag
Also thriving were precious metals as gold briefly broke the $3,100 level in the futures market. Silver futures hit a session high of $35.27 per ounce.
Agnico Eagle Mines, a profitable half-size position in Leaderboard, paced the upside on the stock market today. Shares reentered the 20%-25% profit-taking zone from a breakout at 89. Agnico got some airtime on Thursday's IBD Live show.
Big Picture: Why The Nasdaq Triggered This Market Outlook Downgrade
Alamos Gold was also in the 20%-25% profit zone as it advanced. Alamos cleared a three-month consolidation pattern with a 21.45 buy point on Feb. 3.
Yet trading also marked a sharp decline in semiconductor stocks for the second straight session. Among the losers was Broadcom, an artificial intelligence play that supplies chips for the global auto market and other industries. Its shares have shown unusually weak action in recent days. (Read more on Broadcom below.)
ASML, the world No. one supplier of cutting-edge lithography systems for etching designs on silicon chips, fell more than 2% for the second straight day. The Dutch firm has collapsed since hitting a high of 1,110.09 on July 11 last year, falling more than 37% from that peak.
The yield on the key U.S. 10-year government bond rose by as many as two basis points to 4.38% before retreating to 4.36% in recent trading.
But the big story of the day was Trump's auto tariffs, part of the president's plan to seek an equal playing field with large economic partners, as outlined in his election campaign. Trump followed through late Wednesday by imposing a 25% tariff on cars imported into the U.S.
12:50 p.m. ET
Stock Market Today: GM Rebounds, Toyota Suffers More Weakness
Investors in automakers tried to digest the move in morning trades Thursday. General Motors, a former Dow Jones index member, dropped more than 7%. According to news reports, GM assembled nearly 890,000 vehicles at factories in Mexico in 2024.
The stock is still in the early stages of forming a potential new base and sits 22% below the base's left-side high of 61.24.
Headed into Thursday's trading, GM stock showed a decent, but not great, IBD Composite Rating of 86 on a scale of one to 99. To find top growth stocks, focus on those that show a Composite of 95 or better.
Toyota Motor, Japan's largest carmaker, gapped down at the open and dropped. It made a session low of 182.52 and traded just underneath its sinking 200-day moving average. Volume ran 117% above its 50-day moving average, suggesting intense institutional selling.
"Imposing 25% tariffs on imported cars will have a devastating impact on many of our close trading partners — Japan, Korea, Mexico, Canada, and Europe," Wendy Cutler, a former U.S. trade negotiator and currently vice president at the Asia Society Policy Institute, said in a news release sent to Investor's Business Daily. "The U.S. has FTAs (Free Trade Agreements) with three of the five, calling into question the value of U.S. commitments under a trade agreement and whether a USMCA renegotiation is in the cards."
Futures: Inflation Data Due; The Latest Bad Sign For AI Stocks
Electric-Car Makers Rally
But newer carmakers such as Rivian and Lucid Motors, both exclusively makers of electric vehicles, rallied. Both stocks have been laggards vs. the general stock market. But Rivian on Thursday tested its slowly rising 200-day line, an encouraging sign.
The over-the-counter shares of German luxury car giant Mercedes-Benz slumped nearly 3% at one point and hit a session low of 59.62 before trimming that loss to around 1.6% in recent trades.
In early January, Benz shares hit a 52-week low of 53.76 before rebounding. The stock peaked in October 2007 at 93.57 and has severely lagged the stock market since then.
While automaker stocks suffered, auto parts chains such as AutoZone rallied as it appeared certain parts would gain some exemptions due to the complexity of the global supply chain.
AutoZone jumped nearly 4% as volume was more than triple that of normal levels. The stock has rallied nicely since moving out of a six-week flat base at 3,416.71 in mid-January.
Stock Market Today: Broadcom Triggers Two Sell Rules
Chip giant Broadcom dropped nearly 5% in above-average turnover on Wednesday, and slid below a key technical level on its chart, the 200-day moving average. Great stocks tend to hold near or above their 200-day lines amid price corrections.
On Thursday morning, Broadcom slipped nearly 4% more and traded near its session low of 171.05. Shares are down for a third straight month, falling nearly 14% so far in March alone with two full trading days remaining in the month.
Failure to find support at the 200-day moving average would result in a sell rule. Plus, Broadcom already delivered a defensive sell signal when it recently committed a round trip of gains from a strong breakout past a 185.05 buy point in a nine-week double bottom.
Investors who bought at breakouts in August 2020 or in May 2023 are still holding marvelous gains, and thus have earned the right to hold the stock through the current correction for now. The 12-month Relative Strength Rating of the megacap tech has fallen severely in recent months, from a sterling 95 just four weeks ago to a mediocre 56.
A Closer Look At Broadcom's Chart
A monthly chart exemplifies the extraordinary strength of Broadcom stock amid a solid price run that goes back to an initial breakout in the fall of 2013.
Nonetheless, the stock this month is breaking below its 10-month moving average too. Think of the 10-month line as tantamount to the 200-day moving average on a daily chart.
AVGO's 24-month moving average continues to rise and is around 135. A bigger correction by Broadcom could result in a test of this longer-term moving average.
During the 2022 bear market, the stock ventured beneath its 24-month line for a few months. It then rebounded furiously above it in November of that year as the market bottomed.
Stock Market Today: Chip Fund Continues To Fall
The VanEck Semiconductor exchange traded fund, falling 3.3% on Wednesday, lopped off another 2.7% during the first 45 minutes of the session Thursday and hit an early-session low of 216.57. At midday, SMH was still down nearly 2%.
The ETF is down more than 9% so far this year. It's also been living beneath its 50-day moving average for much of the past eight weeks.
Further, the iShares Semiconductor fund also dipped nearly 2%. Its relative strength line, which compares a stock or ETF's performance vs. a major index such as the S&P 500, has been in a pronounced downtrend since July.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
