The S&P 500 (^GSPC +1.18%) fell 0.42% to 7,108.04, the Nasdaq Composite (^IXIC +2.07%) slid 0.89% to 24,438.50, and the Dow Jones Industrial Average (^DJI +0.59%) dipped 0.36% to 49,310.31 as new developments in the Iran War and tech weakness offset energy strength near record highs.
Market movers
ServiceNow plunged about 18% after slower-than-expected guidance put the broader software sector under pressure. Elsewhere, Tesla traded lower despite topping Q1 estimates, and meme favorite Avis Budget Group extended a prior 40%+ collapse. Lastly, Lululemon named ex-Nike executive Heidi O’Neill its new CEO, but the stock dropped 13% today as analysts critiqued the move.
What this means for investors
With tensions escalating in the Strait of Hormuz, ServiceNow’s earnings reigniting the software stock sell-off, and major brands like Tesla and Lululemon battling weakness today, the U.S. markets took a step back. However, there were a few “green shoots” in the market today that show the U.S. economy may be stronger than we give it credit for.
First, United Rentals stock surged 23% higher after excellent earnings. As the world’s largest equipment rental company, URI acts somewhat like a bellwether to the broader industrial sector.
Union Pacific also rose 9% today after its solid earnings, and I’d argue it provides similar insights into the U.S. economy.
Lastly, Texas Instruments soared 19% after blowing past analysts’ expectations for its Q1 earnings and boosting guidance. Texas Instruments’ success today is a reasonable indicator that chip demand is not yet showing any weakness.
