Dow Jones futures edged higher in after-hours trading, while S&P 500 and Nasdaq futures also rose. Tesla (TSLA) is holding its Annual General Meeting of Shareholders, but there isn’t much big news.
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Stock market gains eased on Tuesday as debt ceiling concerns tightened and added selling pressure. The Nasdaq rose for most of the session thanks to megacap tech stocks, including: Advanced Micro Devices (AMD), Nvidia (NVDA), microsoft (MSFTMore), Amazon.com (AMZN) and Google’s parent alphabet (Google).
The S&P 500 and Dow Jones fell for much of the day, with the latter ending below the 50-day line. The breadth of the market was tough.
debt ceiling negotiations
President Joe Biden and congressional leaders held talks on a new debt ceiling at the White House on Tuesday afternoon. “We have a lot of work to do,” said House Speaker Kevin McCarthy, adding that the two sides are far apart. He added that a deal could be reached this week.
But just before the closing bell on Tuesday, the White House announced that President Biden would cut short an upcoming trip to Asia, citing debt ceiling talks. The news sent major indexes to trading lows, suggesting that a debt ceiling break is not imminent.
Without a debt ceiling hike, the U.S. could default in early June, possibly on June 1st. Still, behind-the-scenes staff work is reportedly progressing.
On the other hand, the FTC Amgen (AMGN) take over Horizon Therapeutics (HZNP). This has raised concerns about M&A activity in biotech and healthcare in general.
the goal (target), TJX Co., Ltd. (TJXMore) and dyna trace (DT) will report on Wednesday morning. TGT stock is struggling below its moving averages. TJX shares are just below the early entries. The Dynatrace stock has already cleared early entries and is halting just below the traditional breakout.
Nvidia stock is IBD Leaderboard, Dynatrace participates as a profitable options trade. We also have DT in stock IBD50 list. MSFT shares are listed on the IBD Long-Term Leaders List, IBD Big Cap 20.
The video embedded in this article explained and analyzed Tuesday’s market trends On hold (Onon), AMD, and Axcelis Technologies (ACLS).
Tesla vs. BYD: EV giants vie for the throne, but which one is better to buy?
Tesla Shareholders Meeting
Tesla’s shareholder meeting was held at the Austin EV factory.
Investors in TSLA stock wanted more information on a variety of stocks and products, including the Cybertruck, 4680 Battery and the latest Model 3.
CEO Elon Musk said Tesla plans to mass-produce the Cybertruck this year, but it may be later than expected. He didn’t give many details, but said it would be difficult to sell a stainless steel Cybertruck at an affordable price.
Tesla has provided a darker silhouette for what could be the next generation car. However, no details have been given as to when the EV, presumably the cheaper model, will arrive or what its specs will be.
Musk said he expects the economy to recover in 12 months. He also promoted the humanoid robot Optimus.
Mr. Musk ended his long-standing policy and said he would “try a little bit of advertising and see how it goes.”
Musk has also denied rumors that he may step down as CEO of Tesla.
Earlier Tuesday, Bloomberg reported that Tesla Shanghai was nearing the start of prototype testing of a modified Model 3.
Tesla shares rose 1% in late trading. Shares rose 0.1% to 166.52 in regular trading on Tuesday, just below the 21-day line. Tesla shares are also facing resistance at the 50-day line and above that is the 200-day line. Any progress in Tesla shares will result in a double bottom buy point at 207.89.
dow jones futures today
Dow Jones futures rose 0.2% against fair value. S&P 500 futures were up 0.2% and Nasdaq 100 futures were up 0.3%. Tesla stock is a staple of the S&P 500 and Nasdaq 100.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
IBD experts analyze hot stocks during the stock market rally on IBD Live.
stock market rise
Stock market gains were mixed for much of Tuesday’s trading, but the Nasdaq turned lower on concerns about the debt ceiling.
The Dow Jones Industrial Average fell 1% in stock market trading on Tuesday. The S&P 500 index fell 0.6%. The Nasdaq Composite fell 0.2%. The small-cap Russell 2000 is down 1.4% on him.
The megacap was the primary impetus. AMD shares surged 4.2%, briefly above the official buy point. Nvidia shares rose 0.9% to a 52-week high. Google stock rose 2.6% and Amazon 2%. MSFT shares rose 0.7%.
US oil prices fell 0.35% to $70.86 per 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 U.S. Treasury yield climbed 4 basis points to 3.45%.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) fell 1.1%, while the Innovator IBD Breakout Opportunity ETF (game) retreated 2%. iShares Augmented Technology Software Sector ETF (IGV) fell 0.3%, with Microsoft stock taking the top spot. VanEck Vectors Semiconductor ETF (SMH) closed below break-even with shares of AMD and key Nvidia shares.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) down 2.5%, the ARK Genomics ETF (Argu) fell 3.3%. TSLA stock is the #1 holding across Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 2.8%, while the Global X US Infrastructure Development ETF (pave) gave up 1.6%. US Global Jets ETF (Jets) fell 0.45%. SPDR S&P Homebuilders ETF (XHB) gave up 1.2%. Energy Select SPDR ETF (XLE) retreated 2.5% and the Healthcare Select Sector SPDR Fund (XLV) fell 0.8%.
Financial Select SPDR ETF (XLF) fell 0.9%. SPDR S&P Regional Banking ETF (KRE) retreated 1.5%.
Top 5 Chinese stocks to watch right now
market rise analysis
The stock market rally on Tuesday was a divergent move, with mega-cap tech stocks gaining as the broader market fell.
The Nasdaq edged up to its highest level since late August. The S&P 500 is just below the 21st line. The Dow Jones fell below the 50-day line for its worst closing price since late March.
Given the mixed performance of major indices, the range was unusually negative.
Losers beat winners more than 2-1 on the Nasdaq and almost 4-1 on the New York Stock Exchange. New lows easily beat new highs.
The Nasdaq 100, led by AMD, Nvidia, Microsoft, Amazon and GOOGL stocks, climbed 0.1%, approaching its August high. However, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.95% but is still above 50 days.
Invesco S&P 500 Equal Weight ETF (RSP) fell 1.4%, its worst closing since late March. It is now slightly closer to the October bear market low than it was to the 2023 high of early February.
On the positive side, the chip sector is showing new strength and broadening. The SMH ETF gave up intraday gains on Tuesday but is still outperforming. AMD stock and Nvidia are clearly in the lead.but Ram Research (LRCX) and Applied Materials (Amat) has seen a bullish move by the chip gear giant, with AMAT’s results expected to be released on Thursday night. ON Semiconductor (upon) and ACLS stocks, the EV-focused chip market, are rebounding. broadcom (AVGO) is approaching the buy point.
If the chip sector is poised to strengthen again, that would bode well for the market upside. Semiconductors have a huge market capitalization in their own right. Also, chips are in basically everything. So if chips are doing well, it bodes well for many industries.
On the other hand, software is also evolving. Yes, MSFT stock is part of it, although much of its rise reflects cloud computing and AI.but salesforce.com (CRM) stock, Service Now (now) and Dynatrace are all doing well, with several cloud names recovering in the last few weeks. ServiceNow announced Tuesday a new AI feature in partnership with Microsoft.
On the downside, the FTC’s move to challenge the Amgen-Horizon deal could set a precedent to block many biotech acquisitions. As such, it could affect biotech stocks for some time.
Timing the Market with IBD’s ETF Market Strategy
what to do now
Equity market gains continue to move sideways, with narrow leadership. Do not attempt to force a strong exposure in such an environment. If you belong to a good strain such as a megacap, you can get good exposure. If you’re unlucky, you may have almost nothing but cash.
When taking a new position, keep the stakes small and focus on early entry. You can take a partial profit relatively early on to ensure a profit in the end. Some stocks, such as Nvidia, rose significantly, but many others rose slightly from their buy points and then fell back.
Keep building your watchlist. There are reasons to be cautious in a volatile market, but it won’t take long for the market rally to show renewed strength. So I want to be prepared.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
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