Stocks Fall On Iran Concerns; Caterpillar, XPO, Google In Focus

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0:25Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, April 21st. It's Alyssa Coram here. And stocks falling today on fresh Iran-related concerns. Joining me now to break down the action for the major indexes and take a look at some notable stocks to watch is my colleague Ed Carson. Ed, great to see you. Great to see you. I want to take a look at Caterpillar, XPO, and Google. All right, we'll take a look at those stocks. Also, some names reporting after the close because earnings season is here, and we know it's a big week this week. So Ed, we know you're on top of everything, and we'll get your take here shortly.

1:01Ed Carson:First, let's take a look at the major indexes. The Nasdaq today down about six tenths of a percent reversing lower. Meanwhile, the S &P 500 on the day down six tenths of a percent as well. Same for the Dow down six tenths of a percent and small caps tracked by the Russell 2000 IWM ETF reversing lower as well down one percent on the day. And Ed, I think the other notable thing here is, look, this context wise, we've gone up a lot. So, you know, not a surprise to see a down day, but the context here is it was an outside day, right? So we tried to hit a new high on a number of the major indexes and reversed lower.

1:46Ed Carson:So that outside day, downside reversal type action from a technical perspective, you know, could signal further weakness. We'll see. We know that a lot of this is headline driven. What do you say? Yeah. I mean, so, I mean, if you don't want to go back to the days, not just to March or even the even take November, December, January, where we had lots of volatility. And you just didn't know where things would go. We've been had such a nice uptrend. Yeah, I mean, if there were no news, today's action wouldn't be that bad. Given the context of the prior week, it wasn't great to see the downside reversal.

2:19The news out there is that it became clear pretty much shortly before the close. And that's when the market tumbled, not tumbled, but fell sort of solidly at the end of the thing is that there Iran talks that people were hoping for today, maybe tomorrow, they've been canceled, apparently. I mean, like Vice President Vance isn't going, Iran isn't going, and the ceasefire expires tomorrow. So we've got a range of things that could happen. We could easily see some kind of ceasefire extended for a day or two or a week or two. We could see real progress toward a deal, or we could see actual attacks back and forth.

2:53So that would be one thing. It's like if we started seeing war flare up again, how much of this gain that we've seen over the past few weeks would go away? I don't know. I mean, that's ultimately it's the market reaction. If the market had sold off two or three percent today, I don't think people would have been shocked, you know, in that sense. Because, you know, if you think about if we've been rallying on deal optimism and then there's disappointment, but we didn't. So, you know, you could argue that this today was sort of resilient. It doesn't mean it has to stay that way. Yeah, it certainly could have been worse.

3:24And yeah, so I mean, I don't want to make too much of it. We're down 0.6 % after a really powerful rally, really on hopes, you know, and we'll just have to see, you know, what develops next. Follow the market. You don't have to really listen to me. I'm talking about the news. It's but, you know, watch the market reaction to the news.

3:42Ed Carson:Exactly. I think that that context is important. What is the market doing in spite of the uncertainty out there? It's just great to have that context. And then from a technical perspective, the IEBD team for the NASDAQ is keeping an eye on that 24 ,000 level. It's a round number, psychological level. It also coincides with this breakout to highs that we've seen in recent days. So if we do have a pullback over the next couple of trading sessions, and that is an if, you know, will we find support around that level? Where will we see the action versus some of those shorter term moving averages that are likely to catch up if we do get some sort of pause, which could be constructive, right?

4:33Ed Carson:We've seen a lot of the leading stocks looking like runaway trains, Ed, that it's been hard to hop on. Yeah. So you could see stocks pull back to their 21-day lines, 50-day lines perhaps. Maybe some handles form heading into earnings in a couple of weeks, a week or two, including Google, which we'll look at soon. That would be great if we could form a handle. Yeah, I mean all of this, you know, this could be fairly normal and healthy action. And this is also why we talk about getting in gradually, gradually but steadily. because, you know, say any time if you decide to suddenly go from 10 % to 80 % in the day and you buy at the highs of the day and you're down, it may not, it's not a big deal for people who bought like a week or two ago.

5:14And maybe there's a new buy you made today and it's not doing great, but it's just totally different from your whole portfolio being down two to 4 % immediately, even though the market looks fine. You know what I mean? That's, and so that's why, you know, just sort of let the market pull you in. Most people should be pretty heavily invested. You're doing more, you know, checking to see, can I make my portfolio better by adding, subtracting a little bit rather than big changes. But this is why we talk about that on a, you know, just not on any given day, just make radical changes.

5:45Ed Carson:Piling in. All right. Let's take a look at levels to watch for the S &P 500, which also had an outside day downside reversal. It did not notch a new high intraday today, but still holding around highs, Ed. It looks like 7 ,000 would be a notable level to keep an eye on on the downside short term. Yeah, and that definitely could happen. It could pull back and that's where you find support. So that'll be interesting. It's just not fun when things drop like that in the meantime, but that could be very constructive. But yeah, for now, still holding up. Was disappointing to see a downside reversal, but broader picture, pretty good.

6:25Ed Carson:All right. While we're here taking a look at the S &P 500, let's take a look at RSP. This is the equal weight S &P 500 ETF, Ed. Yeah, this one's a little more notable because, you know, it came right up just within a few pennies of getting to a high and was turned away. Now, you know, we have a rally tomorrow and we can go right through. This is just a blip. But, you know, it was nice to see this coming up. It's definitely been lagging the major indexes after leading for quite a while. So, but yeah, so we'll have to see that. It's clearly going to be a resistance area for RSP. Okay. And then we oftentimes like to compare QQQ, the NASDAQ 100 versus its equal weighted counterpart.

7:10Ed Carson:So here's a look at the Qs down four-tenths of a percent on the day near highs, and then QQQE on the day. It's similar action here, But what do you think about the tech space and, you know, what we're seeing the mega caps do versus some of the other names underneath the surface? Yeah, I mean, QQQE did well yesterday. It didn't fall. But, you know, the mega caps seem to be doing OK. Some of them are definitely lagging, but they seem to have been coming up, too. So it doesn't feel like a real divergence. And let me just say some breaking news. President Trump has extended the ceasefire in Iran. So if you're looking at the extended, you know, look at the extended trading there, there's some little blips that you're seeing.

7:55You know, I'm seeing like the major indexes or the ETFs trading up like, you know, just modestly 0.3, 0.4. And this is probably one reason why the market didn't sell off because they figured that there would be something like this out there. So, yeah, but anyway, there's just sort of just a modest gain after, you know, not a total shock, but it's a little bit of nice relief that there's not going to be possible attacks going back and forth on Wednesday morning for the markets.

8:25Ed Carson:Okay, let's just get some quick thoughts on two sector ETFs that we are tracking. And here's a look at SMH chips remain strong. Yeah. So this one did not fall. It was interesting that that – so this held up and sort of IGV, which IGV has not been doing well. But IGV still has a lot of work to do, but it still rose. Because SMH, and let me forgot to say, I do have a position in this. I wanted to say, like, I think chips will do well. But I also didn't want to, at the beginning of the rally, I didn't want to have to be constantly busy with it and worrying about ups and downs. And this has acted well.

9:01There's definitely been a lot of other names within SMH that have done a lot better. But yeah, so this, but chips look really good.

9:10Ed Carson:So basically you're saying going the ETF route versus that single stock risk and something that has perhaps a more manageable average true range than. Yeah. And at the time, some stocks were really extended and some hadn't come up and others have now come up quite a bit. And you could have some some high ATR names. But, you know, so this has been quieter. You know, it's nice not to have everything be a 10 % ATR. Let's put it that way, because that can be hard to deal with even just intraday on, you know, on things. Yeah, quietly strong. Not a bad thing for the portfolio, right, with that relative strength line there.

9:51Ed Carson:So getting outperformance without the volatility. Hey, who wouldn't want that? All right, let's take a look at some stocks. Here's Caterpillar. And this was our stock of the day today. It's hovering right around that round number of 800 ed. Yeah, so either use the cup base or treat this sort of as a high handle. Either way, it's in a buy zone. You know, this is one, yeah, it came off highs. A lot of things did. It still rose. I mean, you know, but the market had a downside reversal. Hard not for stocks to get to feel some effects. The RS line, it's come back a little bit, but it's basically at highs, and that's after a nice uptrend.

10:30This is one thing that, you know, David Ryan was looking at, and there's other names like this. The performance has not been amazing in the fundamentals. I mean, in the last quarter, earnings finally turned higher after, I think, four or five quarters of declines. Sales picked up. That was nice. There's supposed to be a little better performance, you know, in the next couple of years, in part because of AI-related generator sales and maybe some AI-related construction. So the fundamentals aren't the most amazing. And you just have to know that coming in, it has made a run already. So just something to keep in mind.

11:03But the earnings line should start finally turning higher after you can see leveling off for a while there. But it's showing nice action here. And there's a lot of construction-related plays that are getting that AI lift. All right.

11:20Ed Carson:Next on the list, let's go over to XPO in the Transportation Logistics Group, a recent breakout and perhaps an early entry slightly ahead of that$220.50 cup buy point, but still in a buy zone here, Ed. And perhaps on the weekly chart, blue dot last week for this with that relative strength line at highs as it broke out. Yeah. So this has been showing nice action. Again, much like Caterpillar, the fundamentals aren't really there. They're supposed to be there starting in 2026. I mean, it's forward looking. You're supposed to see some decent numbers on the EPS. Revenue not amazing. And you just have to know that.

12:07But this one sort of, you know, it was maybe a little too high, but it sort of has that base on base feel to it, you know, sort of coming up. And then on top of that, you know, sort of cleared that move. It broke out on J.B. Hunt, you know, a week or so ago. That's what was the sort of the catalyst on that name. XPO has earnings coming up. So there's a few names in this space that are looking good. And in the whole shipping, transportation, where you're looking, rail, FedEx, other things. So, which is also just a positive sign for the economy that you're seeing this, you know, there's been concerns about the economy.

12:39Well, you know, honestly, the market's not showing that. When the transports are up, that really does tell you something that, no, no, the economy is doing all right. And so XPO is one of many of these names. And you should definitely be paying attention to these things, even if you don't want to jump on board. But I think this is acting well and it's becoming a leading group, this whole space of freight once again. Yeah.

13:02Ed Carson:And you mentioned that we were going to take a look at Google Parent Alphabet. So let's go there now, forming the right side of a base. Pulling back here a little bit, it was down 1.5 % on the day, but we could see a proper handle form on the right side of the base. And in terms of the mega cap names, this is probably one of the better looking ones, wouldn't you say, Ed? I would say so. Amazon is making a case, but it's sort of run up so fast now. This one seems a little calmer, you know, like that's the thing. You know, Google had a couple of opportunities when it bounced above the 50-day line.

13:36And then you had sort of a line, you know, and then last week when it sort of popped above either, yeah, a trend line or just clearing that short little area from last week. And, you know, it's basically pausing right around the prior buy point, which is something, you know, there's not too many people who are upset. So it'd be great. It has earnings next week. Everybody seems to have earnings next week. But this one, if it could form a handle on a weekly chart, it's already down again. You know, if it paused here, it would be. And, you know, so its potential would be great if it fell maybe a little bit more, honestly.

14:11Get more of a shakeout. Because if I had bought this last week, I didn't. But if I had, I wouldn't have been shaken out. So it wouldn't be a bad thing if you shake a few people out before the earnings. but that but yeah we'll have to see and of course i don't think you know i don't think there's at this point probably want to be holding off especially since it's pulled back but this is one of the strongest names obviously everybody should be looking at these hyperscalers regardless even if they were all terrible we should look at microsoft earnings when they come up even though the stock looks pretty bad because it's so important for everything else but amazon has been very bullish on hey we're making you know it'd be a real shock if they didn't say great things about AI spending, you know, these companies.

14:55But then again, if they disappointed at all, that would be, that could knock the stocks, even if it looks, sounds pretty good. Hey, they raised their estimates by 5%. And it's like, people are like, well, I wanted 20. You know, you could, so it's always a reaction to the news on all these things, but these names are acting well. You know, it's just a very important report. And I think Google has definitely been one of the strongest names. It's having solid growth, and it seems like one of those safer plays. Doesn't mean it can't come down. You see how it came down a significant amount in the correction, but this is definitely a name to be looking at, especially as we get close to earnings.

15:34Ed Carson:Totally agree. Definitely high on the list for that earnings reaction. Maybe that could be the catalyst for a breakout. And speaking of earnings, let's check out a couple of stocks with reports out after the closing bell, starting with Interactive Brokers IBKR, seeing the stock currently down about 1.8%, Ed. Yeah, and it probably depends on the estimate you're looking at, but it seems to be pretty much sort of in line for earnings, maybe just missing on revenue. So it's down a little bit, might pull back below the buy point. I haven't seen any of the details. I don't, you know, the conference call presumably hasn't started yet.

16:09Ed Carson:All right. Now over to the chip space. Here's a look at Texas Instruments. Not seeing a whole lot of movement here, but right now I'm seeing the stock up a little less than 1%. Yeah, I don't think this one is actually reported yet. I thought it might, and it probably will in a few minutes. Yeah, we'll give it a few minutes, I guess. Yeah, exactly. But it's, you know, this one isn't the leader in this space, and it's sort of gone sideways forever, but it's very, it is in a buy zone, And it's relevant for other analog chip makers like analog devices and stuff. So, you know, what this one has to say will be will be important on that front.

16:47Ed Carson:All right. Well, let's see if United Airlines has reported yet. I'm seeing shares down about seven tenths of a percent here, Ed. Yeah, I think they beat views. Maybe they cut guidance for the full year. I don't it doesn't seem to be too much movement. You know, there's a there's better names in the travel space. So but this one has fallen back. It was looking like it was going to flash some buy signals and then it sort of pulled back. So, you know, I was hoping to see things for other names, but this one down a little bit right now. Okay. Well, for more earnings coverage, everyone should check out investors.com.

17:24Ed Carson:That's where we have a lot of great reporting and analysis and taking a look at that stock reaction, putting things into context for investors. And since we are in the thick of earnings season, make sure to check out our earnings cheat sheet show with our very own Ed here and Alexis Garcia. They give you all the notes that you need for the week ahead, all the important earnings, what to look for, what the estimates are. So it's just a very, very valuable resource during earnings season. And especially right now, these are the big weeks that we are in. Yeah, next week is the big one. all the big names.

18:05And it just seems like, you know, how can we not keep talking for 30, 40 of these things? And I think people, they stop. But yeah, it's a lot of fun. And that'll be out Friday morning.

18:15Ed Carson:Yes. So check out investors.com slash videos and our YouTube channel for that. So we look forward to that. And thanks so much. And thanks, everyone, for tuning in. That is it from us for today. But we will be back with more tomorrow morning on IABD Live. Investors.com slash IABD Live for all the details on that. We'll see you there. And we'll also see you right back here tomorrow after the close.

18:55Hey, this is Tell Us Demos.

18:57Ed Carson:And I'm Miriam Gottfried. We're reporters at The Wall Street Journal and the hosts of WSJ's Take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now.