Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures.
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Indexes Hold Firm After Sell-Off; MakeMyTrip, Tyler Tech, DaVita In Focus
AeroVironment (AVAV), Hewlett Packard Enterprise (HPE) headlined earnings after the close.
The stock market rally had a narrowly mixed session on Wednesday, with the major indexes all around key levels.
July job openings tumbled to a three-year low, adding to renewed growth concerns. Along with dovish comments from a hawkish Fed policymaker, the odds of a big Fed rate cut on Sept. 18 are growing.
Nvidia (NVDA) fell 1.7% while Tesla (TSLA) made a strong gain, near a key level
Meanwhile, Palantir Technologies (PLTR), ServiceNow (NOW), Coupang (CPNG), AppLovin (APP), Sea (SE), Costco Wholesale (COST) and Tyler Technologies (TYL) all found support around their 21-day exponential moving averages.
Coupang, Sea stock and perhaps Palantir were actionable, though current market conditions make any new buys risky. ServiceNow, AppLovin, Tyler Technologies and Costco stock are near buy points.
Nvidia stock and ServiceNow are on IBD Leaderboard. Costco and AppLovin stock are on SwingTrader. Palantir stock is on the IBD 50. Tyler Technologies stock was Wednesday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures climbed a fraction vs. fair value. S&P 500 futures tilted lower and Nasdaq 100 futures edged higher.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Earnings
AeroVironment earnings easily beat, but the company’s reaffirmed guidance is below views. AVAV stock fell solidly in overnight action. Shares rose 0.9% in Wednesday’s regular session to 194.04. The drone maker has a 224 cup-base buy point. Investors could use 211.44 as a not-quite-handle entry.
HP Enterprise earnings beat fiscal Q3 views and guided up for the full year, but HPE stock fell modestly in extended action. Shares fell 1.5% to 18.77 on Wednesday, further below a sliding 50-day line.
C3.ai (AI) beat views but guided fractionally below views for Q3 revenue. AI stock dived overnight.
AI plays Broadcom (AVGO) and Samsara (IOT) will be in focus late Thursday.
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Stock Market Rally
The stock market rally had a narrowly mixed session, but bulls were unable to bounce back from Tuesday’s sell-off.
The Dow Jones Industrial Average rose 0.1% in Wednesday’s stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite declined 0.3%. The small-cap Russell 2000 dipped 0.2%.
The Dow is still modestly above its 21-day line. The S&P 500 and Russell 2000 hit resistance at their 21-day lines but are holding the 50-day, for now.
The Nasdaq, well below those two levels, just undercut the 17,000 level intraday and came close to the low of its Aug. 13 follow-through day. A close below the FTD low would be a highly bearish sign for the stock market rally.
The 10-year Treasury yield sank eight basis points to 3.77%. The two-year Treasury yield, more closely tied to Fed policy, tumbled 12 basis points to 3.77%, though unrounded it’s fractionally higher than the 10-year rate. The yield curve has been inverted since June 2022.
Job openings fell to the lowest level since January 2021, while Atlanta Fed President Raphael Bostic, typically a hawkish policymaker, said the central bank “cannot wait until inflation” has fallen to 2%. Along with weaker-than-expected manufacturing data on Tuesday, the odds of a 50-basis-point Fed rate cut on Sept. 18 are now up to 45%.
U.S. crude oil prices fell 1.6% to $69.20 a barrel, the lowest close of 2024. Crude futures have tumbled 8.8% in the last three sessions. Gasoline futures dipped 0.8% and heating oil 2.1%, both the lowest settlements since December 2021.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose a fraction. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.2%. ServiceNow stock is a major IGV component, with C3.ai, AppLovin and Palantir also members. The VanEck Vectors Semiconductor ETF (SMH) also lost 0.2%. Nvidia stock is the largest holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 0.3% and ARK Genomics ETF (ARKG) retreated 1%. Tesla stock is a major holding across Ark Invest’s ETFs. Nvidia stock also is a top-10 member.
SPDR S&P Metals & Mining ETF (XME) gave up 0.8%. SPDR S&P Homebuilders ETF (XHB) stepped down 0.4%. The Energy Select SPDR ETF (XLE) slumped 1.4% and the Health Care Select Sector SPDR Fund (XLV) lost 0.2%.
The Industrial Select Sector SPDR Fund (XLI) and Financial Select SPDR ETF (XLF) both climbed 0.1%.
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Stocks Finding Key Support
Palantir stock edged up 0.3% on Wednesday to 30.59, holding its 21-day line after tumbling to 29.31 intraday, just above the 10-week line. PLTR could offer a buying opportunity, though the market risks are high.
Sea stock climbed 1% to 78.15, staying within a buy zone. Intraday, the Southeast Asian e-commerce and online entertainment company fell to 75.67, undercutting a 76.60 buy point and the 21-day line.
Coupang stock jumped 7% to 23.54, briefly moving above the 23.66 handle buy point. The South Korea e-commerce leader clearly broke the downtrend of the handle.
Tyler stock advanced 1.4% to 586.66 on Wednesday, just below a 593.50 flat-base buy point that it hasn’t topped yet.
ServiceNow stock edged down 0.1% while AppLovin dipped 0.3% and Costco climbed 1.3%. All three are finding support around their 21-day lines just below traditional buy points briefly cleared recently.
Nvidia Stock
Nvidia stock fell 1.7% to 106.21 after trading as low as 104.12 and as high as 113.27. Shares fell even with Nvidia denying a report that it’s received a Justice Department subpoena regarding an antitrust probe.
NVDA stock plunged 9.5% on Tuesday after skidding 7.7% last week as its earnings report failed to impress.
Nvidia’s inability to bounce is not a good sign for the AI leader, or for chip and AI stocks generally.
Tesla Stock
Tesla stock jumped 4.2% to 219.41, hitting resistance near the 50-day line. Shares have a 271 buy point from a 33%-deep consolidation. Investors could use a decisive move above the 50-day as an aggressive entry, perhaps using the short-term high of 228.22.
What To Do Now
The stock market rally is struggling.
It wouldn’t take much for the S&P 500 to hit all-time highs. The Russell 2000 could look healthy with a solid session or two. But both are closer to looking significantly damaged. The Nasdaq is already in bad shape.
It’s not a time to be buying. If you feel compelled to make new purchases, keep them small and be ready to exit quickly.
With the market rally at key levels, investors need to be ready to act quickly to the upside or downside.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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