Dow Logs Worst Weekly Losing Streak Since 2023: Stock Market Today

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Stocks opened lower Friday and stayed there through the close. Amid bare economic and earnings calendars, market participants tracked developments in the Middle East and higher oil prices, which have muddied the outlook for interest rates.

At the close, the blue-chip Dow Jones Industrial Average was down 1.0% at 45,577, the broader S&P 500 was off 1.5% at 6,506, and the tech-heavy Nasdaq Composite was 2.0% lower at 21,647. All three benchmarks notched a fourth straight weekly loss – the Dow's worst weekly losing streak since February 2023.

The small-cap Russell 2000 fell 2.3% to 2,438 – entering correction territory, which is a 10% drop from its most recent high.

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Oil prices, meanwhile, continued to rise, with the front-month West Texas Intermediate (WTI) crude futures gaining 2.3% to $98.32 per barrel, bringing their month-to-date return to 47%.

Higher energy costs are exacerbating inflation worries, which, in turn, have lifted Treasury yields to their highest levels since last summer. On Friday, the yield on the 2-year Treasury note rose 5.9 basis points to 3.892%, while the 10-year Treasury yield climbed 9.7 basis points to 4.38%. (A basis point = 0.01%.)

It's also clouded the outlook for rate cuts. According to CME Group FedWatch, futures traders are not anticipating any rate cuts this year and are now pricing in the probability of rate hikes.

SMCI leads S&P 500 decliners on China chip-smuggling scandal

In single-stock news, Super Micro Computer (SMCI) plunged 33.3% – making it the worst S&P 500 stock today – after one of the server maker's co-founders and board members, Yih-Shyan "Wally" Liaw, was charged with smuggling "billions of dollars' worth" of servers to China.

The servers contained Nvidia's (NVDA) high-performing chips that "are subject to strict U.S. export controls barring their sale to China without a license," according to the unsealed indictment. "Those controls are in place to protect U.S. national security and foreign policy interests, among other things."

SMCI was not named in the indictment, but Liaw, along with a company manager and a contractor, were. Super Micro Computer said that it has placed the two employees on leave and terminated its relationship with the contractor.

"The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," Super Micro said in a statement, adding that the company "maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations."

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CFRA Research analysts were quick to downgrade the tech stock to Sell from Buy and slash their price target to $16 from $40 – 22% below current levels.

"Despite SMCI's liquid cooling leadership, strong backlog, and tailwinds from growing AI spending, we note its already messy history of auditor departures, accounting violations, and de-listings, which make these new violations look more like a structural problem than a one-off mistake, further damaging the company's already weak credibility, especially given the direct involvement of co-founder Wally Liaw," the analysts say.

Arm stock gets a double upgrade

Elsewhere in the tech space, HSBC analyst Frank Lee double-upgraded Arm (ARM, +2.0%) to Buy from Reduce (the equivalent of Sell) and raised his price target on the chip designer to $205 from $90, representing implied upside of nearly 55% to today's close.

Arm's central processing units (CPUs) are becoming an "indispensable" segment of AI data centers, allowing "for orchestration, data-management, and real-time inference tasks that GPUs [graphics processing units] cannot perform efficiently," Lee says. "It's a game-changer for ARM that is "still being undervalued by the market," he adds.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.