Market Steadies as Nvidia Builds Base; Tesla Jumps on Robotaxi Unveiling Date

The stock market spent the week in retreat before finding its footing on Friday, a pattern that left investors watching closely for what comes next. The Dow Jones fell 2.3% over the five trading days, the S&P 500 dropped 0.95%, and the Nasdaq slipped 0.8%—modest losses by historical measure, but enough to test the resolve of a market that had climbed steadily since early March. Thursday brought the sharpest pain, a sharp reversal triggered by Middle East tensions that pushed the major indexes below key support levels. But Friday's rebound, which came even as employers added jobs at a brisk pace, suggested the selling had run its course.

What emerged from the week's churn was a market taking a pause rather than breaking down. The Dow reclaimed its 50-day moving average on Friday. The S&P 500 and Nasdaq both bounced back above their 21-day lines. The Russell 2000, a measure of smaller companies, proved more stubborn, unable to close above its 21-day support. Volume fell on Friday compared to Thursday, and the day itself was what technicians call an inside day—the range contained within the previous day's range—suggesting neither buyers nor sellers had seized control. Still, the consolidation served a purpose. Since early March, the Nasdaq had been trading in a relatively tight band, finding support at its 10-week moving average. This sideways action gave many leading stocks room to build bases, the technical formations that often precede significant moves higher.

Nvidia, the dominant force in the artificial intelligence chip market, exemplified this pattern. The stock fell 2.6% for the week to close at 880.08, marking a second straight weekly decline after an 11-week surge that had made it the clear leader of the AI rally. But on Friday, shares rebounded to finish just above their 21-day line, and the company was now four weeks into what could become a flat base—a consolidation pattern that, if completed, would offer a buy point at 974, the high from a major reversal day on March 8. Broadcom, Taiwan Semiconductor, and Astera Labs, a recent IPO in AI networking chips, were all working on similar bases. ARM Holdings had already completed one. Super Micro Computer, whose servers are a favored home for Nvidia chips, was close to forging a new base of its own. For investors, the message was clear: the leaders were not broken, merely gathering strength.

Tesla told a different story. The electric vehicle maker fell 6.2% for the week to 164.90, retreating once again from near its 10-week moving average and briefly matching an 11-month low on Friday. The damage stemmed from two sources. On Tuesday, Tesla reported first-quarter deliveries that fell far short of even the most pessimistic forecasts. Then on Friday, Reuters reported that the company was abandoning plans for a $25,000 EV and shifting its focus entirely to a robotaxi with no steering wheel—a bet that Elon Musk's company could build its future almost entirely on autonomous driving technology. Musk responded on his social media platform X by calling Reuters a liar, but he offered no specifics about what the news organization had gotten wrong. Late Friday, however, Musk announced that Tesla would unveil a robotaxi on August 8, offering no detail about whether the event would showcase a working prototype, a design, or merely an image. The market responded with enthusiasm: Tesla stock jumped 3.8% after the close. The timing of the announcement—coming as the stock hit fresh lows—suggested Musk was attempting to stabilize investor sentiment at a critical moment.

The broader market faced headwinds that could limit how far the rebound could travel. The 10-year Treasury yield had climbed to 4.38%, the highest close of 2024, after jumping 18.5 basis points during the week. That rise reflected growing skepticism about the Federal Reserve's willingness to cut interest rates. Just weeks earlier, markets had priced in a rate cut as likely in June. By week's end, the odds had fallen to 49 percent—a coin flip. Higher yields made stocks less attractive relative to bonds, a dynamic that could weigh on growth stocks in particular. Oil futures, by contrast, surged 4.5% to 86.91 a barrel, their best level since October, suggesting some investors were pricing in stronger economic demand ahead.

For investors, the week presented a tactical puzzle. The sideways action had been treacherous, with many leading stocks flirting with buy signals before quickly reversing lower. Some had attempted incremental purchases, only to be forced to cut positions. The consensus view among market strategists was to wait for more convincing evidence of strength—a move by the Nasdaq and S&P 500 to clear Thursday's intraday highs and test all-time levels—before significantly increasing exposure. Such a broad market advance would likely pull the AI chip leaders higher as well, finally breaking them out of their consolidations. Until then, the market remained rangebound, and investors were advised to focus on building watchlists and identifying emerging setups rather than forcing trades in a market that had not yet decided which direction it wanted to go.