U.S. stock futures have tumbled this week, extending losses across tech stocks amid growing fears of an impending economic downturn. The selloff was triggered by weak U.S. employment data released last week and rising jobless claims, which have investors worried the Federal Reserve is slow to cut interest rates in time to prevent a recession.
A dramatic sell-off in stocks on Monday halted a $6.4 trillion global stock market decline over three weeks. Mega-cap technology stocks bore the brunt of the selling, with chipmaker Nvidia (NVDA) down more than 6% and Apple (AAPL) down roughly 5% on Monday. An unexpected interest rate hike by the Bank of Japan (BoJ) in late July and news that Berkshire's Warren Buffett had sold half of his huge stake in Apple (AAPL) also added to the pressure.
Still, the tumultuous week ended on a somewhat positive note, with the benchmark S&P 500 (SP500) index and the Nasdaq Composite Index (COMP:IND) rising by more than 3% and 4%, respectively.
As markets attempt to recover and second-quarter earnings season gets into full swing, here are some trending stocks for the week.
Apple (AAPL) stock was in the spotlight after Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) slashed its stake by nearly 50% as part of a massive sell-off in the second quarter. The stock fell about 5% on Monday but gradually recovered over the week to close 8.6% higher. Despite the dramatic sell-off and delays to the company's highly anticipated AI rollout, analysts are urging Apple investors to remain calm.
Lumen Technologies (LUMN) has surged about 114% in a week after it said it secured $5 billion in new business to provide fiber service capacity. The company has signed multi-year deals with Microsoft (MSFT) and Corning (GLW), which has helped send the stock up a staggering 350% since early July and erase all of its losses since the start of the year. The company also reported second-quarter results on Tuesday.
Supermicrocomputer (SMCI) fell 5% over the week after the artificial intelligence server company reported mixed fourth-quarter results and announced a stock split. Bank of America downgraded the stock to neutral from buy following the results, noting that profit margins will remain under pressure even as quarterly sales rose more than 100% year over year to $5.31 billion.
Eli Lilly (LLY) shares rose about 16% after stellar second-quarter results that beat analysts' expectations. The drugmaker also raised its full-year outlook, mainly due to the success of its blockbuster weight-loss product. “Maunjaro, Zepbound and Verzenio drove our strong financial performance in the second quarter as we advance our manufacturing expansion plans,” CEO David Ricks said.
Intel (INTC) shares remain under pressure after second-quarter earnings last week fell short of expectations. The tech giant announced a 15% workforce cut and dividend suspension to cut costs and manage its $48 billion debt load, reflecting significant financial strain. Shares fell more than 2% this week, drawing harsh reactions from analysts who also expressed concerns about the company's profit margins. Additionally, shareholders filed a lawsuit against the company, alleging that Intel misrepresented its nascent foundry business.
Palantir Technologies (PLTR) soared 38% after strong second-quarter results and the announcement of a deal with Microsoft (MSFT) to provide AI services to defense and intelligence agencies. Wedbush Securities called the deal a “game changer” and likely a “launch pad” for Palantir's artificial intelligence platform.
Medical Properties Trust (MPW) drew attention after its second-quarter profit met analysts' average expectations, but agreed to limit its cash dividend in a credit amendment. “MPT has taken decisive actions to generate more than $2.5 billion in liquidity, significantly exceeding our original target for the fiscal year, and to accelerate debt repayment,” said Edward K. Aldag Jr., chairman, president and CEO.
Airbnb (ABNB) shares fell more than 7% this week after the company's weak outlook highlighted consumers' reluctance to pre-book stays amid a softening economic environment. The lodging platform expects third-quarter revenue to grow 8%-10% to $3.67 billion-$3.7 billion, but below expectations of $3.84 billion, due to slower sequential year-over-year growth in room and experience bookings compared to the second quarter.
