Market Volatility: Separating Signal from Noise
The recent DeepSeek debacle has left investors wondering if it was just a fleeting anomaly or a sign of deeper issues. As fourth-quarter earnings reports start pouring in, the focus shifts to the Information Technology sector, with heavy hitters like Microsoft, Meta, Tesla, ASML, and Apple set to take center stage.
Earnings Season: What to Expect
Analysts will undoubtedly grill these companies on their conference calls, but it’s unlikely they’ll have all the answers. The ripple effects of DeepSeek will likely take months to fully understand. As we often say, the best way to cut through the noise is to follow the price action.
Tuesday’s Rebound: A Glimmer of Hope?
Some of the hardest-hit stocks on Monday staged a impressive recovery on Tuesday, particularly in the semiconductor, computer hardware, and software industries. Nvidia led the charge, surging 9% and reclaiming its 200-day average. Apple, Microsoft, Oracle, and others also posted significant gains, ranging from 3% to 9%.
Sector Performance: A Mixed Bag
While some areas of the market saw a rebound, others struggled. Consumer Staples, Utilities, Real Estate, and Energy all fell at least 1% on Tuesday. The S&P 500, however, rose nearly 1% on lighter-than-average volume, filling much of the price gap from Monday’s selloff.
Key Levels to Watch
The top of the price gap from Monday’s selloff sits at 6,089, a key level to watch in the coming days. As earnings season heats up, investors will be closely monitoring these reports for signs of strength or weakness in the market.
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