Investors are closely monitoring the situation as volatility remains high and market sentiment fluctuates. Experts suggest staying cautious and diversifying portfolios to mitigate potential risks during this challenging period.
The ongoing sell-off in the stock market has entered its fourth consecutive week, with many momentum stocks experiencing significant declines. President Donald Trump's announcement of additional steel and aluminum tariffs on Canada has further fueled the downward trend, leading to pullbacks in major indices such as the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.
Investors on Wall Street are growing increasingly concerned about the possibility of a looming recession, contributing to the market volatility. CNBC Pro conducted a screening of S&P 500 companies to identify those whose shares have been losing momentum rapidly. Stocks with a relative strength index (RSI) below 30 on Monday and consistently below 40 for the past 10 trading sessions were singled out as particularly weak and potentially oversold.
Market Reaction to Tariff News
On Tuesday, the S & P 500, Dow Jones Industrial Average, and Nasdaq Composite experienced further declines following President Donald Trump's announcement of additional steel and aluminum tariffs on Canada.
Among the stocks flagged in the screening process is Tesla, which has seen its shares decline significantly in recent weeks. Despite a brief midday rally on Tuesday, Tesla has faced a challenging period, with its stock falling in 10 out of the past 11 weeks. Elon Musk, the CEO of Tesla, recently acknowledged the difficulties he faces in managing his various businesses, partly due to his involvement in the Trump administration.
Mounting Concerns of Recession
The recent market declines have been fueled by growing worries on Wall Street about a potential recession looming in the U.S. Meanwhile, Amazon, with an RSI around 26, has witnessed a notable drop of over 16% in its share price over the past month. The e-commerce giant experienced a more than 2% decline on Monday, alongside other major tech stocks. Despite the recent slump, analysts remain overwhelmingly bullish on Amazon, with a consensus price target suggesting substantial upside potential.
Screening for Weak Performers
Amid the market volatility, CNBC Pro conducted a screening for S & P 500 companies that have been exhibiting significant weakness in their stock performance.
ServiceNow and Constellation Energy also emerged as stocks with weak momentum, as indicated by their RSIs below 30. ServiceNow has seen a 30% decline in its share price over the past three months, while Constellation Energy has retreated nearly 35% in just one month.
Criteria for Weak Stocks
The screening focused on stocks with a relative strength index (RSI) below 30 on Monday, and consistently below 40 for the past 10 trading sessions. Overall, the market remains turbulent, with investors closely monitoring developments and adjusting their strategies in response to the evolving economic landscape.
The sell-off in the stock market has persisted for four weeks now, with several momentum stocks suffering losses amidst the turmoil.
Tesla's Struggles Continue
Tesla, with an RSI of around 22, saw a brief uptick of over 5% on Tuesday after a recent losing streak, but the stock has faced challenges in the past few weeks.
Concerns Surrounding Tesla
Elon Musk's Tesla has experienced a significant decline of over 46% in the last three months, with Musk admitting to facing difficulties in managing his businesses due to his involvement in the Trump administration.
Market Response to Tesla
President Trump expressed support for Musk via a social media post, criticizing those boycotting Tesla and pledging to purchase one himself.
Analyst Ratings on Tesla
Analysts' opinions on Tesla are divided, with a mix of buy, hold, and sell ratings among those covering the stock.
Amazon's Stock Performance
Amazon, with an RSI of around 26, has seen a decline of more than 16% in the past month, despite overwhelming bullish sentiment from analysts.
Analyst Outlook on Amazon
The majority of analysts covering Amazon maintain a positive outlook on the e-commerce giant, with a consensus price target implying significant upside potential.
ServiceNow and Constellation Energy
ServiceNow and Constellation Energy also displayed weak performance, with RSIs below 30 and considerable declines in their stock prices.
