Dow Jones futures rose marginally overnight alongside S&P 500 futures and Nasdaq futures after recording a sharp drop in Wednesday’s rally.Kathy Wood Strain shopify (shop) and Robinhood Market (hood) The headline of another busy closing night was apple (AAPL), Amazon.com (AMZN) on Thursday tap.
X
US Treasury rating downgrade, Treasury yields hit 2023 highs, negative earnings reaction despite some seemingly positive reports, Wednesday Nasdaq led declines, key short-term levels interrupted.
With no direct news, many growth stocks plummeted. Nvidia (NVDA), a symbol of an AI-driven market rally has breached several short-term levels. Tesla (TSLA) remains strong after the earnings plunge, testing key support.
In addition to Shopify and HOOD stocks, Qualcomm (QCOM), Axcelis Technologies (ACLS), Mercado Libre (Meri), hubspot (hub) and PayPal (PYPL) was among many notable after-hours reports.
MELI stocks rose strongly in the closing stages, while ACLS stocks edged higher. PYPL shares, Qualcomm, Robinhood and HubSpot were among the biggest losers. Shopify fell slightly.
thursday morning, shift 4 payment (four), Expedia (Exp), Hyatt Hotel (H.), Entegris (ENTG), Quanta Service (PWR), Cars.com (car) and many other companies have announced earnings.
Apple and Amazon are expected to report on Thursday night, closing out the earnings season, and more.
We have Shopify and HUBS in stock IBD Leaderboard. FICO shares are listed on his IBD Long Term Leaders. ACLS inventory is IBD50. HUB inventory is IBD Big Cap 20.
dow jones futures today
Dow Jones futures beat fair value by 0.1%. S&P 500 futures were up 0.1% and Nasdaq 100 futures were up 0.1%.
The 10-year U.S. Treasury yield rose two basis points to 4.1%.
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 rally in the stock market led to high volumes and heavy losses.
The Dow Jones Industrial Average fell 1% in stock market trading on Wednesday, retreating from a 15-month high. The S&P 500 index fell 1.4%. The Nasdaq Composite fell 2.2%, its biggest one-day drop since February. Small cap Russell 2000 he did 1.4%.
Not surprisingly, the breadth of the market was decidedly weak.
Late Tuesday, Fitch Ratings downgraded US Treasuries from AAA to AA+. The 10-year U.S. Treasury yield climbed to 4.13% during the day, the highest level in 2023, thanks in part to strong U.S. economic data. The 10-year Treasury yield rose 3 basis points to close at 4.08%.
Earnings also hit stocks such as: Advanced Micro Devices (AMD), Generak (GNRC), paycom software (PAYC) and dyna trace (DT).
The Nasdaq fell below its 21-day moving average for the first time in three months. It also fell below the 14,000 level, hitting a three-week low. It is now just 2.6% above the 50-day line, and the extension is gone.
The S&P 500 tested the 21-day line and closed just above that level.
With these major indexes wiping out weeks of gains, it’s no surprise that many major stocks, especially tech stocks, have followed suit.
Nvidia shares fell 4.8% on Wednesday, closing below the 21-day line for the first time in months and hitting a three-week low. NVDA is still above the 50-day line. Beyond the overall market decline, the AI chip leader also fell as rival AMD plummeted 7% in an ugly chart-damaging reversal.
Tesla shares fell 2.7% to 254.11, the lowest since late June, but found some support above the 50-day line. Stocks fell below the 10-week line.
US oil prices fell 2.3% to $79.49 a barrel.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) fell 2.9%. iShares Augmented Technology Software Sector ETF (IGV) retreated by 3.2%. HUBS shares are his holdings in IGV. VanEck Vectors Semiconductor ETF (SMH) fell 3.7%. Nvidia stock is his number one holding in SMH, with AMD and QCOM stocks also notable components.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) down 5.6%, the ARK Genomics ETF (Argu) 4.9%. TSLA shares are the number one holding of all Ark Invest ETFs. SHOP stock is a top 10 Cathie Wood stock. HOOD shares are also a notable investment for her Cathie Wood’s Ark, and Wood also owns a portion of her MELI shares.
SPDR S&P Metals & Mining ETF (XME) fell 2.9%. US Global Jets ETF (Jets) fell 1.1%. SPDR S&P Homebuilders ETF (XHB) fell 0.9%. Energy Select SPDR ETF (XLE) retreated 0.85% and the Healthcare Select Sector SPDR Fund (XLV) increased by 0.1%.
Industrial Select Sector SPDR Fund (XLI) 1.05% Loss The Financial Select SPDR ETF (XLF) fell 0.85%.
Top 5 Chinese stocks to watch right now
Main income
SHOP shares fell slightly in late trading after Shopify reported strong earnings and sales that slightly outstripped views. The e-commerce software giant also expects earnings growth to slow in the third quarter. His Kathy Wood shares on Shopify fell 7.4% to 62.43 on Wednesday, breaking below the 50-day line for the first time since April. is.
HOOD shares tumbled in long-term trading after Robinhood Markets reported smaller-than-expected losses and topped the earnings outlook, but monthly active users of free-trading stocks and cryptocurrency apps fell. It continues to decline. Robinhood shares fell 3.3% on Wednesday to $12.44, below the buy point of $12.76 but above the 21st line.
QCOM shares plunged in overnight trading as the wireless chip giant outperformed third-quarter EPS but fell just short of sales. Apple’s chip maker announced a weak sales outlook for the fourth quarter. Qualcomm shares fell 2.1 percent to 129.27 on Wednesday. MarketSmith analysis shows the stock is heading towards the cup-based buy point of 139.94.
ACLS shares edged higher after strong earnings and guidance from chip equipment makers exposed to EVs. Axcelis shares fell 3.7% to 189.02 on Wednesday, but closed lower and didn’t even touch the 10th or 21st line.
MELI shares rose strongly, trading above the 50-day line after the Latin American e-commerce and payments giant outperformed in EPS and revenue. MercadoLibre shares fell 3.8% to 1,164.81 on Wednesday. The buy point for MELI shares is 1,365.64, but investors may use Monday’s high of 1,257.66 as an early entry.
HUBS shares fell solidly despite the cloud marketing software maker comfortably outperforming its second-quarter guidance and offering bullish guidance. HubSpot shares fell 4% to 553.22 on Wednesday, but found support above the 21-day line and the short-term consolidation cap.
PYPL shares tumbled late after the digital payments leader reported slightly higher EPS and revenue than historical guidance. PayPal shares fell 3.1% to 73.20 on Wednesday, below the 200-day line.
market analysis
The stock market rally will test or fall below the 21-day moving average at some point. So it is not an omen of death.
Delivery days have increased in recent weeks. This institutional selling is a negative signal for the market rally.
On the other hand, market sentiment has become very bullish in various indicators, which is also a bearish sign.
Selling to major stocks, especially tech stocks, was conspicuous. Some charts still look solid, while others look damaged, but they could turn positive in the future.
The market pullback has given stocks room to tackle new buying opportunities, including Nvidia and Tesla, and perhaps enter a steady uptrend again for several weeks. But the decline could last perhaps 50 days or longer.
Timing the Market with IBD’s ETF Market Strategy
what to do now
Wednesday’s market sell-off pushed many of the recent buys, especially tech stocks, under water. For positions with a solid cushion, Wednesday did not trigger many red flashing sell signals. The only question is how much pain investors risk.
The IBD has signaled caution over the last few days as a potential pullback is possible, especially in the middle of earnings season.
Investors should remain vigilant about making new purchases in the very short term. Instead, we want to lock in partial profits, especially if recent gains are in danger of turning into losses.
Earnings from Apple and Amazon and Friday’s jobs report mean uncertainty will continue to rise throughout the week.
Market declines have forced some stocks to back off their bullish stances or end handles and bases. Therefore, you should pay close attention to the flurry of buying opportunities that may arise in the coming days.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
Follow Ed Carson on Twitter. @IBD_ECarson Stock market updates and more.
You may also like:
Why this IBD tool simplifies your search for top stocks
Want to profit quickly and avoid big losses? Try SwingTrader
Best growth stocks to buy and watch
IBD Digital: IBD’s Premium Stock Listings, Tools and Analysis Now Available
Tesla vs. BYD: EV giants vie for the throne, but which one is better to buy?
