Dow Jones futures fell slightly on Wednesday morning, along with S&P 500 and Nasdaq futures.
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The stock market’s rally ended on a mixed note on Tuesday, with major stocks such as Nvidia slipping out of high territory and some of the newer breakouts struggling.
The Nasdaq initially rose in value. Nvidia (NVDA) and other AI stocks continued their gains on Tuesday morning. Tesla (TSLA). The Composite Stock Index abandoned all gains by mid-afternoon and closed modestly higher.
The rest of the markets were lackluster throughout the session, with the S&P 500 flat and the Dow slightly lower.
Not many stocks became available for trading on Tuesday, and some of them quickly crashed. lifetime group (LTH) and ON Semiconductor (upon). Others seemed to dilate.
Computer and printer giant HP Co., Ltd. (HPQ), Hewlett Packard Enterprise (HPE), Ambarella (Amba) and box (box) reported on Tuesday night. Box shares rose modestly, while HPQ, HPE and particularly AMBA stocks fell on earnings and guidance.
salesforce.com (CRM) Cybersecurity drama looms Wednesday night Octa (Octa) and cloud strike (CRWDMore).On the other hand, a heated artificial intelligence play C3.ai (AI) may offer heat checks for AI stocks, including AI stocks.
A video embedded in this article highlights Tuesday’s market moves and analyzes Lifetime Group, ON Semiconductor and FLNC stocks.
Tesla’s rival fluence energy (FLNC) was Tuesday’s IBD Stock Of The Day.
dow jones futures today
Dow Jones futures fell 0.3% against fair value. S&P 500 futures were down 0.4% and Nasdaq 100 futures were down 0.4%.
The 10-year U.S. Treasury yield fell 5 basis points to 3.65%.
Crude oil futures fell 3% at the start of Wednesday after plummeting on Tuesday.
China’s Official Manufacturing Purchasing Managers Index fell 0.4 points to 48.8 in May, further below the neutral 50 level and running counter to expectations of a rise to 49.4. It’s the latest sign that China’s economic resilience from the end of coronavirus restrictions is waning.
Hong Kong’s Hang Seng Index fell 1.9%, continuing its decline since late January.
At 10 a.m. ET Wednesday, the Department of Labor will release its April JOLTS survey. Although the number of job openings has declined significantly, it is still at a high level, and is expected to fall to 9.35 million from 9.59 million in March. The Labor Party’s April jobs report will be released on Friday.
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
The stock market rally after the long holiday season treated a tentative debt ceiling deal as a small deal. The positive opening soon became mixed and the Nasdaq fell sharply from its highs.
The Dow Jones Industrial Average fell 0.15% in stock market trading on Tuesday. The S&P 500 index was almost flat. The Nasdaq Composite rose 0.3%. Small-cap Russell 2000 fell 0.3%.
US oil prices fell 4.4% to $69.46 a barrel.
The 10-year U.S. Treasury yield fell 12 basis points to 3.7%.
ETFs
Among growth ETFs, the iShares Expanded Technology Software Sector ETF (IGV) rose 0.8%. CRM shares are IGV’s top holdings, and AI shares are also included in ETFs. VanEck Vectors Semiconductor ETF (SMH) increased by 0.5%. NVDA shares are his major holdings in SMH, which Onsemi is also a constituent of.
The ARK Innovation ETF (Arkuk) up 1.8%, the ARK Genomics ETF (Argu) increased by 0.1%. Tesla shares are the top holdings across Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 1.8%. US Global Jets ETF (Jets) increased by 0.55%. SPDR S&P Homebuilders ETF (XHB) increased by 0.2%. Energy Select SPDR (XLE) fell 1%, while the Healthcare Select Sector SPDR Fund (XLV) fell 0.6%.
Financial Select SPDR ETF (XLF) closed the trade just below breakeven. SPDR S&P Regional Bank (KRE) 0.2% decrease
Top 5 Chinese stocks to watch right now
tesla stock
Tesla jumped 4.1% to 201.16, just breaking the 200-day line. The stock reached 204.48 during the day. TSLA shares are targeting a buy point at 207.89 from a cup base or double dip consolidation.
Tesla fell slightly in the opening session.
Tesla CEO Elon Musk has visited China for the first time since before the coronavirus pandemic and met with government officials. He is likely to visit Tesla’s Shanghai factory.
AI Stock
C3.ai (AI) shares soared 33% to 43.95 on the eve of the earnings announcement, hitting an 18-month high. AI shares have more than doubled since C3.ai reported his preliminary fourth-quarter sales on May 15. The sales were slightly ahead of previous targets and broadly flat year-over-year.
AI stocks plunged early Wednesday as many AI plays retreated slightly.
How Bill O’Neill uncovered the secrets of stock picking
market rise analysis
The stock market rally remains fragmented and narrowly driven.
The Nasdaq got off to a strong start, rising as much as 1.4% and nearly surpassing its August high. But the Composite Stock Index wiped it all out and ended slightly higher. The Nasdaq 100 also narrowed its gains as stocks such as Nvidia and Tesla fell from highs. It briefly exceeded 10% during the daytime on Tuesday, but is now 9% above the 50-day line.
The S&P 500, which hit a nine-month high during the day, closed flat.
The Dow Jones rose towards the 200th but traded in a tight range. The Russell 2000 continues testing for 50 days after his reversal from his 200 last week.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) initially climbed to a 52-week high before reversing with a small loss.
Invesco S&P 500 Equal Weight ETF (RSP) fell 0.2% and remains below the moving average.
The decliners outperformed the risers slightly.
AI stocks generally rallied on Tuesday, but some reversed, with many including Nvidia falling sharply from early highs. C3.ai was a notable exception.
Several names cleared the official purchase points on Tuesday morning, with mixed results. Lifetime and Onsemi stocks broke, but quickly reversed.
On the positive side, Arista Networks (ANET) entered the buying zone but is 13% above the 50-day line after surging 23.5% in three sessions. FLNC stock sparked an early entry, closing just below the official buy point but trading 24% above the 50-day line.
Timing the Market with IBD’s ETF Market Strategy
what to do now
A divided market rally isn’t a great situation, and there was little reason or even opportunity for additional exposure on Tuesday.
Not many stocks are working, and most of the winning stocks such as Nvidia have been extended. A good number of stocks are near the buy point, but some are extending beyond the moving averages.
In recent weeks, many prospective stocks have set up fake-out or shakeout breakouts, like LTH stock on Tuesday. This makes it difficult to move forward or build a position.
At some point the buying opportunity will work more consistently as the market rally shows broader spread and leadership. But it probably won’t be immediately obvious. Investors should therefore be cautious about new purchases and cut losses immediately.
If you own hot artificial intelligence stocks like Nvidia or AI stocks, enjoy. They may continue to run, but it wouldn’t be surprising to see a significant setback over the next few days. NVDA shares, which were once valued at $1 trillion on Tuesday, are 103% above the 200-day line. C3.ai is 148% above its long-term level.
You can also wait for a big heavy downside reversal before starting to sell or sell your holdings. Clearly, the size of your AI-related exposure, your beliefs about the theme and individual stocks, and your own investment style will greatly influence your decisions.
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