Dow Jones futures were little changed overnight, while S&P 500 futures and Nasdaq futures rose slightly. Robinhood Markets (HOOD) and HubSpot were key earnings late.
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Stocks Fade After Strong Start; AXON, Halozyme And UTHR In Focus
The stock market opened solidly higher Wednesday, but gains faded and turned into losses. Nvidia (NVDA) helped lead the downside reversal, following mixed results, guidance and commentary from AI server maker Super Micro Computer (SMCI).
Other Magnificent Seven stocks slashed gains or reversed lower, as Meta Platforms (META), Apple (AAPL), Microsoft (MSFT), Tesla (TSLA) and arguably Amazon.com (AMZN) hit resistance at key levels.
The stock market rally attempt is still ongoing, but it wasn’t a great sign.
Dow Jones Futures Today
Dow Jones futures were even vs. fair value. S&P 500 futures climbed 0.1%. Nasdaq 100 futures rose 0.3%.
The 10-year Treasury yield dipped to 3.92%.
At 8:30 a.m. ET, the Labor Department will release weekly jobless claims. They could indicate if the weak July jobs report reflected short-term weather impacts.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Nvidia stock is on Leaderboard. Microsoft stock is on IBD Long-Term Leaders.
Key Earnings
McKesson (MCK), AppLovin (APP), HubSpot (HUBS), Dutch Bros (BROS) and Robinhood reported Wednesday night.
HubSpot jumped on earnings while Dutch Bros stock dived. McKesson stock, which arguably closed in buy range, fell sharply.
AppLovin, which initially plunged late, turned slightly higher. Robinhood stock rose modestly amid up-and-down trading.
Early Thursday, Shark Ninja (SN) and Eli Lilly (LLY) are on tap.
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Stock Market Rally Attempt Falters
The stock market rally reversed lower from a strong open. The Dow Jones Industrial Average retreated 0.6% in Wednesday’s stock market trading. The S&P 500 index sank 0.8%. The Nasdaq composite fell 1.05%. The small-cap Russell 2000 tumbled 1.4%.
The Dow Jones and Russell 2000 again hit resistance at the 50-day line. So did the Invesco S&P 500 Equal Weight ETF (RSP), which finished down 0.7%.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell back from the 200-day line, retreating 0.7%.
Wednesday marked Day Two of a stock market rally attempt. The rally is intact until the major indexes undercut their Monday lows, but Wednesday’s downside reversal was not encouraging.
While there earnings winners, including Fortinet (FTNT), Shopify (SHOP), Axon Enterprise (AXON) and Exelixis (EXEL), there were plenty of earnings losers, notably Super Micro and Airbnb (ABNB).
U.S. crude oil prices jumped 2.8% to $75.23 a barrel.
The 10-year Treasury yield popped eight basis points to 3.97%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) dropped 1.6%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.2%, with Microsoft stock a major component. The VanEck Vectors Semiconductor ETF (SMH) fell back 2.75%, with Nvidia stock the dominant holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slid 1.8% and ARK Genomics ETF (ARKG) declined 2.5%. Tesla stock is still a notable holding across Ark Invest’s ETFs. Cathie Wood’s Ark also owns some HOOD stock.
SPDR S&P Metals & Mining ETF (XME) gave up 1.2%. SPDR S&P Homebuilders ETF (XHB) shed 2.6%. The Energy Select SPDR ETF (XLE) climbed 0.4%. The Health Care Select Sector SPDR Fund (XLV) lost 1%. Eli Lilly stock is the No. 1 holding in XLV, with McKesson also a component.
The Industrial Select Sector SPDR Fund (XLI) shed 0.5%. The Financial Select SPDR ETF (XLF) edged up 0.1%.
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Magnificent Seven Stocks Struggle
Nvidia stock rose 4.4% Wednesday morning, but finished off 5.1% to 98.95 in an ugly, downside, outside reversal day. It was the lowest close since May 22, just before its earnings gap-up breakout.
Nvidia ally Super Micro missed on earnings and guided low on EPS, but did give bullish revenue targets. Super Micro also indicated on its earnings call that Nvidia won’t begin meaningful shipments of Blackwell next-generation AI chips until early 2025, following recent reports of Blackwell production delays. SMCI stock dived 20% Wednesday.
Apple stock rose 1.3% to 209.86, but hit resistance at its rising 50-day line.
Meta stock fell just over 1% to 488.92, reversing lower around the 50-day line again.
Tesla stock fell 4.4% to 191.82, hitting resistance at the 200-day line again after tumbling below that key level on Monday. TSLA stock has wiped out its huge late June-early July run.
Microsoft stock edged down 0.3% to 398.43, failing to close above its 200-day for a second straight session after topping it intraday.
Amazon stock edged up 0.55% to 162.82, but backed off from near its 200-day line.
Google stock advanced 0.4% to 158.94, modestly above the 200-day line but well below its 50-day.
As Magnificent 7 Stumbles, ‘S&P 493’ Does This For First Time Since 2022
Market Rally Analysis
Wednesday was a great example of why investors shouldn’t rush back into a market at the first uptick. Tuesday kicked off a stock market rally attempt, albeit with a final-hour fade. On Wednesday a strong open quickly turned into losses for the key indexes and stocks.
Perhaps the rally attempt will quickly regain momentum or, perhaps the market will retreat or go sideways for several weeks or months.
Don’t try to guess when a new market uptrend will occur. The key is to be ready when that eventually happens. Keep working on watchlists, focusing on raw talent — relative strength — vs. polished charts.
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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