Dow Jones futures rose early Wednesday, along with S&P 500 futures and Nasdaq futures, with Target and Dynatrace reporting. Tesla (TSLA) rose overnight after the annual shareholder meeting was held, but didn’t make much big news.
X
The stock market rally eased on Tuesday as debt ceiling concerns added to selling pressure into the close. The Nasdaq rallied for most of the session thanks to megacap technologies, incl advanced micro devices (AMD), nvidia (NVDA), Microsoft (MSFT), Amazon.com (AMZN) and the parent of Google the alphabet (Google).
The S&P 500 and Dow Jones fell for most of the day, with the latter closing below its 50-day line. The breadth of the market was grim.
Dow jones futures today
Dow futures rose 0.4% against fair value. S&P 500 futures rose 0.4% and Nasdaq 100 futures rose 0.3%. Tesla stock is a major S&P 500 stock and Nasdaq 100 holding company.
Shares of regional banks rose Western Alliance Bancorp (WALHe said his deposits have ballooned by more than $2 billion since the end of the first quarter. WAL stock jumped 10%.
Crude oil rose slightly. Copper futures, which have been falling recently, rose more than 1%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Debt ceiling talks
President Joe Biden and congressional leaders held new debt ceiling talks at the White House on Tuesday afternoon. “We have a lot of work to do,” House Speaker Kevin McCarthy said, saying the two sides are far apart. He added that a deal could come this week.
However, the White House announced shortly before the closing bell on Tuesday that President Biden would cut short his upcoming trip to Asia because of the debt ceiling negotiations. The news, which indicated no breach in the debt boundary was imminent, pushed major indexes to session lows.
Without raising the debt ceiling, the US may default in early June, possibly June 1st. However, the staff’s work behind the scenes is said to be making progress.
Meanwhile, the Federal Trade Commission moved to ban it Amgen (AMGN) grab Horizon treat (HZNP). That raised concerns about M&A activity in the biotechnology and medical field in general.
Main earnings
Goal (TGTFirst-quarter earnings views topped early Wednesday, as revenue beat previous expectations but same-store sales missed. The retail giant was guided by low discounting in the current second quarter, citing high inventory and shoplifting. TGT stock, below the major moving averages, fell slightly in an up and down movement. Walmart (wmt), which hits on Thursday, rose higher.
Dynatrace (DT) beat the opinions of the fourth quarter of the fiscal year and headed higher for the new fiscal year. DT stock is set to jump above its traditional buy point after the software maker already canceled early entry in early May.
Cos TJX. (TJX) topped EPS views but missed sales. TJX stock fell slightly near a buy point.
Nvidia stock is on file IBD Leaderboard, with Dynatrace joining as a dividend options trader. DT stock is also available at List 50 IBD. MSFT stock is listed on the IBD Long-Term Leaders List and IBD Big Cap 20.
The video embedded in this article discussed and analyzed the market action on Tuesday on hold (Onon) and AMD and Axcelis Technologies (ACLS).
Tesla vs. BYD: EV Giants Vy for the Crown, But Which One is a Better Buy?
Tesla shareholders meeting
The Tesla shareholder meeting took place at the Austin EV factory.
TSLA stock investors have been looking for more details on a variety of issues and products, including the Cybertruck, 4680 battery and an updated Model 3.
CEO Elon Musk said Tesla will deliver Cybertrucks to production this year, but perhaps later than expected. He didn’t provide many details, but said it would be difficult to make the stainless steel Cybertruck affordable to everyone.
Tesla has presented a dark silhouette of what could be the next generation car. But there were no details on when the EV, presumably a cheaper model, might arrive, or when its specs might be.
Musk says he expects the economy to rebound 12 months from now.
Breaking with longstanding policy, Musk said, “We’ll try a little publicity and see how it goes.”
Later, in an interview with CNBC, Musk said he wouldn’t be shy about tweeting or saying what he wanted, and “if the outcome of that is losing money, then so be it.”
Early Tuesday, Bloomberg reported that Tesla Shanghai is close to starting trial production of the revamped Model 3.
Tesla stock jumped more than 1% in pre-market trading. Shares rose 0.1% to 166.52 in the regular Tuesday session, below the 21-day line. Tesla stock is also facing resistance at the 50-day line, with the 200-day line above that. If Tesla stock makes some progress, it will have a double bottom of 207.89 to buy.
Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live
Stock market rise
The stock market rally was mixed for most of Tuesday’s session, but the Nasdaq turned lower on debt ceiling concerns.
The Dow Jones Industrial Average fell 1% in stock market trading on Tuesday. The S&P 500 fell 0.6%. The Nasdaq Composite fell 0.2%. Small Capital Russell 2000 fell 1.4%.
Megacaps was the main driver. AMD stock jumped 4.2%, briefly surpassing an official buy point. Nvidia stock rose 0.9% to a 52-week high. Google stock gained 2.6% and Amazon 2%. MSFT stock rose 0.7%.
US crude oil prices fell 0.35% to $70.86 a barrel.
Copper prices fell 2.2%, reflecting weaker-than-expected Chinese economic data and a stronger dollar. Gold fell 1.5% and silver 1.6%.
The 10-year Treasury yield rose 4 basis points, to 3.45%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty(down 1.1%, while the Innovator IBD Breakout Opportunities ETF)fit) decreased by 2%. iShares Expanded Technology and Software ETF (IGV) fell 0.3%, with Microsoft stock the first component. VanEck Vectors Semiconductor Corporation (SMH) closed just below the break-even point, with AMD shares and Nvidia’s main holdings.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(down 2.5% and ARK Genomics ETF)ARKG) decreased by 3.3%. TSLA stock is the No. 1 holding ETF by Ark Invest.
SPDR S&P Metals & Mining ETFs (XME(down 2.8% and the Global Infrastructure Development Fund (ETF) in the US)cradle) gave up 1.6%. US Global Gates Foundation ETF (Planes) fell 0.45%. SPDR S&P Homebuilders ETF (XHB) concession of 1.2%. Energy Defined Fund SPDR ETF (xle(down 2.5% and the SPDR Healthcare Sector Selection Fund)XLV) decreased by 0.8%.
SPDR Financial Selection Fund (XLF) sank 0.9%. SPDR S&P Regional Banking ETF (KRE) fell 1.5%.
Top five Chinese stocks to watch now
Market rally analysis
The stock market rally saw mixed action on Tuesday, as tech giants surged amid a general downturn.
The Nasdaq rose, hitting its best level since late August. The S&P 500 fell below the 21-day line. The Dow Jones fell below the 50-day line with its worst close since late March.
The bid was extraordinarily negative given the mixed move in the major indices.
The losers outperformed the winners by more than 2-to-1 on the NASDAQ and about 4-to-1 on the New York Stock Exchange. New lows are easily outpaced by new highs.
The Nasdaq 100, led by AMD, Nvidia, Microsoft, Amazon and GOOGL stocks, rose 0.1% to close at its highest level in August. But the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) is down 0.95%, although it is still above 50 days.
Invesco S&P 500 Equal Weight Fund (RSP) up 1.4%, its worst close since late March. It is now partly closer to the October bear market lows than the 2023 highs from early February.
On the positive side, the chip sector is showing renewed strength and improving its breadth. The SMH ETF gave up gains during the day on Tuesday, but is still outperforming. AMD and Nvidia stocks are clearly leading the way. but L Research (LRCX) And Applied materials (AMAT) are the chip giants making bullish moves, with AMAT earnings due Thursday night. on semiconductors (on) and ACLS stock is an EV-focused chip startup that has bounced back. from Broadcom (AVGO) close to the point of purchase.
If the chip sector is ready to go up again, this is a positive sign that the market is going up. Semiconductors have a huge market value in their own right. Also, chips are basically in everything. So, if the chips are doing well, that’s a good sign for a large number of industries.
Meanwhile, the software has also improved. Yes, MSFT stock is part of that, although a lot of its gains reflect cloud computing and artificial intelligence. but Salesforce.com (CRM) stock, service now (now) and Dynatrace are all doing well, with several cloud names rebounding in recent weeks. ServiceNow announced new AI features Tuesday in alliance with Microsoft.
On the downside, the FTC’s move to challenge the Amgen-Horizon deal could set a precedent for blocking several biotech acquisitions. So that could affect biotech stocks for some time.
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What are you doing now
The stock market rally continues to move sideways, with a narrow lead. Don’t try to force your way through extreme exposure in this environment. If you’re in the right stocks, like big companies, you might have decent exposure. If you don’t have that much luck, you may often be all cash.
When taking new positions, keep small bets in mind and focus on early entries. You may want to take some partial profits relatively early to make sure that you get the winnings. While some stocks, like Nvidia, post huge gains, many others rise modestly from the point of purchase and then fall back.
Keep working on your watchlists. While there are reasons to be cautious in a volatile market, it wouldn’t take much for the market rally to show renewed strength. So you want to be ready.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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