The major US stock indices closed higher, but the gains were far from evenly distributed. AI and chip-related shares continued to outperform, helping the Nasdaq Composite and Nasdaq 100 rise more than 1%. The Russell 2000 also joined the rally, while the Dow industrial average finished with a modest 16-point gain.
Within the Magnificent 7, Tesla led the way with a 4.04% advance, followed by Amazon. However, Microsoft and Meta moved lower. Meta’s decline also carried a bearish technical development as the price moved below both its 100-day and 200-day moving averages and finished near the session low.
Attention now turns to another important round of earnings. Alphabet and Microsoft report after the close tomorrow, while Amazon announces its results after the close on Thursday.
The closing numbers
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Dow industrial average: +16.00 points (+0.03%) at 52,383.23.
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S&P 500: +45.90 points (+0.60%) at 7,722.67.
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Nasdaq Composite: +308.43 points (+1.18%) at 26,477.81.
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Russell 2000: +32.4479 points (+1.16%) at 2,818.8718.
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Nasdaq 100: +378.04 points (+1.29%) at 29,651.44.
AI and chip shares extend their leadership
The strongest gains on the supplied watchlist stretched across AI infrastructure, semiconductors, connectivity, storage and power-related shares. This was more than a rally in the largest technology names. Several companies further down the market-cap ladder delivered gains well above those of the broader indices.
Some of the standout performers have been under pressure lately but snapped back higher today. Included:
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Nebius: +11.22% to $170.47.
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Credo Technology: +10.77% to $167.43.
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Astera Labs: +10.47% to $286.69.
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CoreWeave: +7.94% to $59.57.
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Bloom Energy: +7.15% to $218.50.
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Western Digital: +6.95% to $380.88.
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Coherent: +6.45% to $239.75.
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Lumentum: +5.88% to $866.18.
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Arista Networks: +5.51% to $187.00.
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AMD: +5.45% to $560.26.
The size of those advances shows where buyers were most aggressive. Nvidia participated as well, but its 0.90% gain was relatively modest compared with the larger moves elsewhere in the group.
Tesla and Amazon lead the Mag 7
Tesla rose 4.04% to $407.46, comfortably leading the Magnificent 7. Amazon followed with a 1.61% gain to $253.10 ahead of Thursday’s earnings release.
Alphabet also advanced ahead of its report tomorrow, while Microsoft slipped modestly. The complete scoreboard for the Mag7 stocks showed:
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Tesla: +4.04% to $407.46.
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Amazon: +1.61% to $253.10.
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Alphabet: +1.19% to $320.58.
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Apple: +0.93% to $347.10.
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Nvidia: +0.90% to $217.94.
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Microsoft: −0.22% to $531.44.
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Meta: −1.64% to $620.19.
Five of the seven finished higher, but the divergence remains important. Buyers continued to favor selected technology shares, while others struggled even with the Nasdaq moving solidly higher.
Meta sellers take more control
Meta was the weakest of the seven, falling $10.37 and closing near its low for the day. More importantly from a technical perspective, the price moved below both its 100-day and 200-day moving averages.
That shifts the burden to the buyers. To improve the technical picture, they need to push the price back above those moving averages and keep it there. Until that happens, the broken levels become potential resistance on a recovery.
A quick recovery would raise the possibility of a failed break. Continued trading below both moving averages would reinforce the bearish bias. Closing near the low adds to the concern, as buyers were unable to produce a meaningful recovery by the finish.
The trading lesson: Follow the individual stock’s clues
A rising Nasdaq can provide a supportive backdrop, but each stock still needs to confirm its own bullish bias. Meta’s weakness on a strong day for technology is a useful reminder.
Moving averages help traders define that distinction. Once the price breaks below an important moving average, the next question is whether it can recover and stay above it. That gives traders a practical barometer for judging control and defining risk.
For Meta, the sellers have made their play. The buyers now need to respond.
This article was written by Greg Michalowski at investinglive.com.