rewrite this title The Daily Breakdown: All Eyes Are on Nvidia This Week

The Daily Breakdown looks at the week ahead, which is quiet on the economic front, but noisier when it comes to crypto and earnings!

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What’s Happening?

After a six-week rally, the Nasdaq 100 (QQQ) ended last week on a softer note, falling 0.4% after Friday’s 1.5% drop. US stocks were lower across the board, with the Russell 2000 (IWM) leading the decline at 2.4%. But bonds were the bigger focus, as the 10-year Treasury yield climbed to nearly 4.6%, its highest level in about a year. Bonds may not be exciting, but higher yields can lift borrowing costs and inflation expectations — a tough mix for tech stocks and the broader market — helping trigger some profit-taking last week.

👀 S&P 500 Spotlight

It’s a big week for retail earnings, with Target, Walmart, Home Depot, Lowe’s, TJX Companies, Deckers and more on deck. Still, many investors will be watching Nvidia, which reports Wednesday after the close. Tech has powered this rally, with semiconductors and memory stocks doing much of the heavy lifting. Will Nvidia extinguish the rally or add fuel to the fire?

⚡ Crypto Corner

We’re seeing some “risk-off” action in cryptos this weekend, with Bitcoin, Ethereum, Dogecoin, and others retreating. And this morning, Bitcoin Cash is really taking a hit, down more than 10% and hitting a one-year low.

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Chart of the Day — PANW

Earlier this year, cybersecurity stocks were hit hard alongside software names amid concerns over AI disruption (check out our software Deep Dive). But after being hammered earlier this year, Palo Alto Networks and others are now trading at record highs.

While Palo Alto Networks briefly cleared resistance and hit record highs in Q4, selling pressure quickly pulled it back down to support in the $150s. There it also found the 200-week moving average as support — something we discussed in our Technical Analysis Boot Camp. 

With support holding in Q1, PANW has soared through resistance, rallying more than 34% in the past two weeks alone. From here, bulls will want to see former resistance near $210 turn into current support.  

Options

Investors who are bullish could consider calls or call spreads as one way to speculate on further upside, while bearish investors could consider puts or put spreads to speculate on a further move to the downside. For options traders, it may be advantageous to have adequate time until the option’s expiration. 

To learn more about options, consider visiting the eToro Academy.

What Wall Street’s Watching

DShares of Dominion are up almost 15% this morning on news that NextEra Energy will acquire the company in an all-stock deal valued at $67 billion. NextEra is the largest utility company in the S&P 500, and the deal comes as power demand continues to rise. Dominion also has a key footprint in Northern Virginia, the world’s largest data center market.

MSFTEven after rallying 18% from its March 30 low, Microsoft has been a noticeable absentee from the broader tech rally. However, shares jumped more than 3% on Friday after positive commentary from hedge fund manager Bill Ackman, whose fund exited Alphabet and used the proceeds to build a $2 billion stake in Microsoft. Dig into the fundamentals for MSFT.

Disclaimer:

Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.