Markets were pulling back today until a sudden afternoon turnaround after disappointing earnings from Alphabet (GOOGL) and Advanced Micro Devices (AMD) put pressure on the Tech sector.
Alphabet is taking a hit, down nearly 7% at lunchtime, after its cloud revenue came in below expectations. Investors are starting to wonder if all that AI spending is actually going to pay off.
AMD isn’t helping sentiment either…
Despite beating on revenue, a weak data-center forecast has seen shares tumble over 9%, also raising concerns about AI’s near-term momentum.
To make things even messier, U.S.-China tensions are heating up, with Big Tech in the crosshairs. Apple (AAPL) slipped 2% on reports that China may target its app store in an antitrust probe. And with tariffs back in play, chip stocks are feeling the pressure.
Johnson & Johnson (JNJ) Surging Higher
One stock not feeling the pressure is Johnson & Johnson (JNJ), which has been crushing it lately.
Its latest earnings came in strong, beating expectations. Looking ahead, the company is projecting sales around $89.6 billion for the year, with earnings between $10.50 and $10.80 per share.
Investors are clearly on board, and the stock has been climbing steadily, up about 7% the past month.
J&J is proving once again why it’s a powerhouse in the Health Care sector.
At the same time, our Newton Indicator is in bullish mode. After being green for a while, it just printed another big green bar and looks like it might break out of its sideways range.
Kraft Heinz (KHC) Sinking
On the flip side, Kraft Heinz (KHC) has been struggling lately.
Its real problem? People just aren’t buying like they used to. With the economy tightening up, shoppers are getting pickier, and that’s hitting demand for some of their staple products.
To make up for it, the company has been jacking up prices, but there’s only so far that can go before it backfires. At some point, higher prices just push more customers away, and that’s a tough cycle to break.
Additionally, the Newton Indicator had been red for a while and now has just switched back into red after a very brief attempt at breaking out yellow.
It looks like a rough day for Tech stocks, with Alphabet and AMD dragging the market lower. Weak earnings, AI doubts, and rising trade tensions have investors on edge.
Let’s see what happens as the week unfolds.
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Graham Lindman
Graham Lindman Trading
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