Stocks Fall On AI Worries, Pare Losses. Oracle, SoFi, Alnylam Pharmaceuticals In Focus.

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0:16Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, October 7th. My name is Ken Shreve. On today's show, we'll talk about what happened in the stock market today, some selling in small caps. They lagged. We had a couple of early headlines that spooked the market. But before we get into all that, let me bring on news editor Ed Carson, who's got three stocks to watch. Yeah, I want to talk about Oracle, which is one reason why the market was a little spooked there. SoFi and Alnylam. I always have trouble with that name, Alnylam. Alnylam. Got it. Yeah, that's a good looking biotech.

0:57Well, let's share my screen here, and I'm going to take a look at the NASDAQ composite for starters. Fairly mild decline. Volume, very, very close call compared to Monday. Remains to be seen if we're going to get a distribution day for the NASDAQ and the S &P 500. You see the NASDAQ here down seven-tenths of a percent. Small caps also had a tough day. They actually lagged with the Russell 2000 down just over 1%. S &P 500, not too bad, down about four-tenths of a percent. And then the Dow Jones actually held up pretty well, helped in part by a strong showing for IBM. Dow Jones Industrial Average dipped just two-tenths of a percent.

1:51mentioned IBM in the blue chip index. That tried to break out from a cup base. It was one of the best gainers in the Dow today. They signed some partnership with ChatGBT Rival and AI startup Anthropic. So, Ed, why don't we just take a look at the Russell 2000 because selling pressure, you know, not too bad. It was up for, what is that, seven sessions in a row. So we were bound to come down at some point, but still holding the 10-day line here. Yeah, I mean, small caps tend to outperform in the upside or downside. So I don't get too worried about that one. It's just to the 10-day line. If I'm in support of the 10-day line, what are you going to do?

2:33I mean, there were some concerns about AI stocks today, you know, and maybe some things. And that may have also not just given a reason to sell, but there's a lot of high-priced stocks out there. The stocks have made a lot of gains, and it seemed like people may have used that as an excuse to sell some. But honestly, we held up very well. Held up very, very well. Yeah, most of the major stock indexes, in fact, they're all holding above their 10-day line. You mentioned some selling in AI stocks. That was fueled by a headline about Oracle earlier in the day. Got any brief color on that? Yeah, we'll get into it more.

3:09but he was just talking about maybe they're not making much money on the NVIDIA chips that they're renting out. I mean, the whole thing. And if they're not making money, that raises concerns about for others and others. And look, obviously, we held up well and even Oracle did well. We'll get to that. But I just go back to January and just look at how the market sold off. Now, some of that was the Trump tariffs, but a lot of that was due to deep seek. And so if there are real concerns, even if they ultimately are proven unfounded, you can have a situation where we could have a really big sell-off.

3:40It was actually in January. It was actually a little later, basically like January 22nd, I think, or I'm not sure where it was, but you can probably find it on any AI stock will show it pretty much. And so it's just something to note. It's just something they have to just be aware of and be engaged. You can't just say, oh, AI is going forever. I was like, maybe it will, but it doesn't mean you can't have big drawdowns. This was not a big drawdown. So it was encouraging. Investors should just be, you know, can still be looking for things to be buying. Just it was just something where there was a little bit of concern.

4:15Yeah. Dow held up reasonably well. Indexes held up well. Yeah. Breath, not great today. It was more than two to one negative at last check on both exchanges. This is the equal weighted RSP, S &P equal weighted ETF. Again, just up several days in a row, down a little bit Monday and down a little bit more today, but still holding above short term support levels. And then the equal weighted NASDAQ 100 as well. Kind of a volatile session today, but still holding that 10 day line. Pretty impressive performance for growth stocks, Ed. That has been a story that's been going on for a little while now.

5:02Pretty nice performance for FFTY today. This was down sharply in the morning, but recovered nicely off lows here. Yeah, and obviously it can depend on if there's a few names that go rip a lot or were down a lot. But, yeah, we sold off initially, but even then, it wasn't even at the 10-day line. Even if we closed at the lows, it wouldn't have been that bad. It would have been great to see that kind of loss, but, you know, real strong support, you know, like there, even though there were some names that saw some big selling intraday, we really came, you know, really ended up fine. This is an example where a heavy volume decline can be constructive because you can see volume was very heavy in FFTY today, but it was able to close well off lows and pair early losses.

5:52So impressive there. Let's check in on the VanEck semiconductor ETF. Jeff, obviously, chip stocks, well, chip equipment stocks really got hit hard today. SMH lagged down 1.8%. I noticed some of the worst decliners in the NASDAQ 100 today, Ed, were some of these chip equipment leaders. Yeah, so I'm not quite sure why they were hit so hard. I mean, some of the memory names, memory chip names sell, and a lot of the chip equipment names are exposed to that. So there could be some of that. I will note that ASML will be reporting next week, so that'll be an important report. But that – so – but yeah, but a lot of it.

6:33NVIDIA was held up. AMD did fine. I mean, Taiwan Semi may have been down, but it's been running up, up, up. So I don't think that the big chip makers showed any real concern today. Right, right. And later this week, TSM, I believe Thursday morning, we're going to get monthly sales from them. But more importantly, next week, they're really going to kick off earnings, third quarter earnings season, Taiwan Semiconductor, next week. That's right. All right. Well, let's move on, take a look at gold, which topped the$4 ,000 level for the first time. I think it settled just over$4 ,000. This is the GLD, just nothing stopping gold, Ed.

7:17It just continues higher, quite extended at this point. Hard to find actionable gold stocks because they've been running higher for so long, but the shiny metal continues to do very well. It's just been doing great. Yeah, yeah. And then IBIT, this is a breakout that was looking good. Again, up six straight days. This is the risk of buying a stock when it rallies so furiously off lows. Technically, IBIT was in a buy zone from 69.89, but again, up for six straight sessions, probably due for a little pullback. And we got one today, IBIT down 3%, but no real damage done to the chart here, Ed. 100 % agree.

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8:54So once again, there was the information reported that their profit margin related to their AI cloud servers just under some pressure here. Yeah, even like supposedly that with some of the Blackwell chips, the most advanced chips, that they were actually lost money on it, supposedly, according to information. Now, a Fox Business report said that the information article was off base, at least to some extent. I don't know if all the things and but in any case, Oracle, which was sort of the epicenter of what was a lot of the selling today. Yeah, it closed fine. I mean, I will note that has come down quite a bit since that peak.

9:32I guess about 18 % from that peak on that day when it announced the open AI deal. So some of these AI things, so that's just something to note. I mean, that was one of the things, the catalysts that sort of revived a lot of things, not revived, but that really pushed AI stocks higher. And obviously the market is doing, hasn't fallen off, but it is interesting that's come back. But, yeah, but today showed, you know, pretty strong performance given what was sort of worrisome. And, again, that is something to note. We're going to have earnings reports in a few weeks. And, you know, maybe we won't get that view initially.

10:11I mean, you know, we won't know how much Microsoft is paying or others, but we're going to get some big names out there. And if they start saying, eh, we're not spending as much or we're really looking to control costs or anything, you know, it'll be very interesting to see. Again, maybe all those will be unfounded and we'll just take off. That's what happened last time. It doesn't mean a bit. But yeah, I think we'll be very interested to see that. At some point, they're going to talk about it. We just don't know when, and it does make this earnings season even more important. A slew of financial stocks kicking things off next week, and I mentioned earnings from the world's largest chip foundry, TSM, also due next week.

10:59Let's move outside of tech and take a look at SoFi Technologies, which has been a very, very strong price performer in the market. This is a pretty good example of what support at the 50-day moving average looks like. You had a breakout in this area here. The weekly chart, this looks like arguably the second test of the 10-week line. And is it too stretched up here, Ed, or do people have a new opportunity to buy here? You know, I think they did have an opportunity. And I think you do have an opportunity. But I, you know, I think when it got just above the 21-day line, because, yes, because of that, I just was not comfortable.

11:43I didn't personally not comfortable buying it just before it got above that. And there was sort of a trend line, a very short trend line that was sort of roughly close to the 21-day line all in all. And so, again, now it's almost 12 % above the 50-day line. And so that's getting a little high for me, especially this is sort of the second test of the 10-week line. I mean, could it work? Absolutely. I mean, this has been doing very well. I would have liked a little bit more gradual pullback. But, again, nice bounce. I think maybe this morning when it was really early on in the day when it was still pretty close to the 21-day line might have been the best time to get at it.

12:23Maybe this one pauses. It would be great if this one paused, either formed a little mini handle within this mini base or even based, had a new base. I mean, that's a lot of stocks have gone on long runs. This was a little frustrating because that previous 10-week test, it was just going all over the place. I mean, there was so much daily volatility that it was really hard to know until the darn thing was way out there that you felt comfortable. Oh, it's really working because it had gone up and down. And so I missed out on this. But strong fundamentals, the revenue growth, I believe, has been accelerating.

12:55So it's not just the technicals. The earnings are triple digit. You know, there's a lot of things going on. I mean, supposedly earnings are supposed to fall in Q4. I'm not sure. Obviously, there's law of big numbers are going to be bigger numbers because they really, you know, are going versus a penny or versus two pennies. It's going to get tougher, but still solid growth, strong growth. So there is a lot to like about this one. I personally think it's a little high now. Yeah. Interesting. The company was posting losses between 2020 and 2023, turned their first annual profit in 2024. And look at the growth expected this year, expected to more than double to$0.32 a share, and then nearly double next year in 2026 to$0.56 a share.

13:39So there's a reason why a stock goes from 10 to 30. It's usually fundamentals, and definitely SoFi has top fundamentals in spades. Now, Alnylam, biotech stock, ALNY, Alnylam Pharmaceuticals,$60 billion market cap company. It is also just recently profitable. profitable. You can see a bunch of losses here. Losses narrowed quite a bit last year, and then you can see profitability expected to kick in this year and big, big growth expected in 2026. So profitable biotech here. What do you see technically, Ed? Yeah, I mean, you said all those fundamentals are great, and really, it's a real size. It's not one of these tiny, tiny ones, so it has real heft to it, and that sales growth should be really strong next year.

14:38Look, it's trading pretty sideways here. I mean, it's sort of, you know, you can sort of treat this almost like a flat base, this whole little range. The 10-week line is caught up. This isn't a dignified pullback. This is just holding firm and forcing the 10-week line to basically race higher nonstop because ALNY hasn't given up anything. So I think if we look on a daily chart, I mean, this may base out, have a real flat base in a week or two. So that, you know, but I think if it got above the highs from last week, that would probably be the place where you could buy it. It would still be close to the 10-week line.

15:15Yeah, right there. I think that would be getting above much of the range in there. And you can probably start a position. It would still be close to the 50-day line because I think, I mean, obviously, or the 10-week line because it obviously has touched the 10-week line. But that way, you wouldn't be, you'd be above that resistance. So I think that would be a nice compromise on that one. And this is one reason why you want to build your watch list, because this is one you can see, you can imagine this one moving. And then it's like, and by the, oh, then you later on check and, oh, I see it. You know, it's now it's further out.

15:43So you want to be ready on something like this, ready on something like SoFi, which I passed up on. But it did briefly, I think, had a nice moment. Nice fundamentals and technicals for big name. Yeah, medical or biotech group, I should say, quietly all the way up to number 10 in our database, ranks number 10 out of 197 groups ranked by Investors Business Daily based on six-month price performance. So it's a big, big group. It's one of the biggest groups in our database, but several profitable names like All NILAM and others that we'll be talking about on IBD Live in coming days. So that'll do it for today.

16:29We'll keep an eye on biotech stocks. And Ed, as always, we appreciate the stocks and your market insight, as always. All right, folks, that'll do it for today. Mentioned, you know, with all my lamb and biotech stocks acting well, who knows? Maybe we'll talk about a few more on IBD Live tomorrow. I will be in the host chair as I normally am on Wednesday. So be sure to join us if you haven't checked out IBD Live yet. One and a half hours of market talk just before the stock market open. We get going just before 9.30 a.m. Eastern time, and we go pretty close to 11 a.m. So lots of talk about actionable stocks, investors.com slash IBD Live.

17:18That'll do it for today. Ed and I will be back here same time after the market close for another Stock Market Today video. Have a great afternoon, everyone. We'll see you tomorrow.

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