Market Movers
Nvidia shares dropped another 2% pre-market, extending Thursday’s 3.5% loss. Despite this decline, Nvidia remains up over 160% year-to-date and briefly surpassed Microsoft in market value earlier this week. Concerns about an overextended market, particularly in AI-driven stocks, have emerged, suggesting a potential rebalancing rather than a significant downturn.
Sarepta Therapeutics surged 37% following FDA approval for an expanded use of its Elevidys gene therapy for Duchenne muscular dystrophy. Nike gained 1% after Oppenheimer upgraded the stock to “outperform” from “market perform,” citing a strategic refocus on product innovation and brand-building. Asana saw a 3% increase after announcing a $150 million share buyback plan, expected to continue through June 2025.
Gilead Sciences rose over 2.6%, continuing its upward trend after announcing a successful late-stage trial for an HIV-prevention shot. LendingTree shares were slightly lower after reports of a cyberattack, and Apple ticked up following a positive price target revision from Bernstein, highlighting Apple’s potential leadership in the AI sector. Delta Air Lines increased 0.7% after announcing a 50% increase in its quarterly dividend.
Triple Witching and Volatility
Friday’s trading is expected to be more volatile due to triple witching, the simultaneous expiration of stock options, stock index options, and stock index futures. This event often leads to heightened volatility as traders close out positions. Additionally, the final day before index rebalancing, involving significant changes such as CrowdStrike joining the S&P 500 and shifts in Nvidia and Apple’s weights in the Technology Select Sector Index, may contribute to market fluctuations.
Market Forecast
Given the current trends and the anticipated volatility from triple witching, the short-term outlook for the market remains cautious. Traders should prepare for potential swings and watch for opportunities arising from the rebalancing activities. The broader market shows resilience, but selective pressure on overextended sectors, especially those driven by artificial intelligence, could lead to a mixed performance. Overall, maintaining a diversified portfolio might help mitigate risks in this fluctuating environment.
