Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures. MongoDB (MDB) and Toll Brothers (TOL) headlined earnings after the close, with an AMD AI event on tap Wednesday.
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The stock market rally had a mixed session Tuesday even as Treasury yields continued to slide on weaker jobs data. Megacaps outperformed while small caps lagged. Apple (AAPL) broke out, moving back above a $3 trillion valuation. Amazon.com (AMZN) reclaimed a buy point. Nvidia (NVDA) and Tesla (TSLA) rebounded from their 50-day lines. Microsoft (MSFT) rose slightly within the buy zone.
MongoDB (MDB), Asana (ASAN), HealthEquity (HQY), Toll Brothers (TOL), SentinelOne (S) and AeroVironment (AVAV) reported Tuesday night.
Early Wednesday, Ollie’s Bargain Outlet (OLLI) will release quarterly financials.
Advanced Micro Devices (AMD) will hold its Advancing AI event Wednesday morning. It’s expected to formally launch its MI300 data center GPU to expand its competition with Nvidia. AMD stock dipped 0.2% to 118.38 on Tuesday, below the 21-day line. While a 122.11 cup-with-handle buy point remains technically valid, investors should probably use the Nov. 29 high of 129.73 as a new handle entry.
Amazon stock, Microsoft and Nvidia are on IBD Leaderboard. Apple stock and Nvidia were added to SwingTrader on Tuesday. MSFT stock is on the IBD Long-Term Leaders list. Nvidia stock, SentinelOne, MongoDB and Microsoft are on the IBD 50. Microsoft and MDB stock are on the IBD Big Cap 20.
Apple was Tuesday’s IBD Stock Of The Day.
The video embedded in the article reviews Tuesday’s market action and analyzes Apple stock, Amazon and Nvidia.
Dow Jones Futures Today
Dow Jones futures advanced 0.2% vs. fair value. S&P 500 futures climbed 0.3% and Nasdaq 100 futures rose 0.5%.
The 10-year Treasury yield edged higher to 4.19%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Key Earnings
MDB stock fell sharply in overnight trade, signaling a move below a recent buy point. MongoDB earnings crushed views once again while revenue comfortably topped. The database software maker also guided higher for Q4. But billings and deferred revenue disappointed. MongoDB stock rose 2.5% to 433.67 on Tuesday, just out of a buy zone from a cup-with-handle base, according to MarketSmith analysis. The official buy point 412.67.
ASAN stock tumbled in extended action, signaling a move back below a buy zone even though Asana also topped views and guided higher. Shares had advanced 2.2% to 23.31 on Tuesday. Asana stock cleared a 22.13 handle buy point last Friday.
HQY stock was little changed overnight after HealthEquity earnings topped Q3 views. Shares of the health savings account manager dipped 4 cents to 69.02 on Tuesday, just below the 50-day line. HealthEquity stock is working on a 76.62 buy point from a 13-month cup-with-handle base. A decisive move above the 50-day could offer an early entry.
TOL stock climbed modestly in late trade after the luxury homebuilder topped earnings views and gave solid fiscal Q1 and 2024 guidance. Toll Brothers stock closed flat at 87.21. That’s slightly extended from an 82.39 cup-with-handle buy point but in range from an 87.12 shelf entry.
SentinelOne stock spiked higher in extended trade, signaling a breakout after the cybersecurity firm reported a smaller-than-expected loss and 42% revenue growth. SentinelOne also guided higher for Q4 revenue. Shares fell 1.2% on Tuesday to 20 but have been running up the right side of a 43%-deep base with a 21.95 buy point. S stock arguably had an early entry around 18 last week.
AVAV stock edged higher in overnight action after AeroVironment earnings solidly beat. Shares of the drone maker inched up 0.8% to 141.23 after hitting a record intraday high on Monday. AVAV stock is extended from a buy zone.
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Stock Market Rally
The stock market rally was mixed, with megacaps propping up the major indexes while small caps retreated.
The Dow Jones Industrial Average fell 0.2% in Tuesday’s stock market trading. The S&P 500 index lost a fraction. The Nasdaq composite climbed 0.3.
The Dow is holding at 52-week highs while the S&P 500 and Nasdaq are trading just below their 52-week highs.
It wasn’t a good day for market breadth, though the overall trend remains positive. Losers outpaced winners by 2-to-1 on the NYSE and nearly so on the Nasdaq
The small-cap Russell 2000 fell 1.4%. That followed a 2.9% jump Friday and a 1.1% gain Monday.
The Invesco S&P 500 Equal Weight ETF (RSP) sank 0.8%, definitely underperforming the S&P 500.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) declined 0.6%, but came off lows. The Nasdaq 100 rose 0.25%, buoyed by Apple, Amazon, Nvidia, Tesla stock and more.
Leading stocks generally look fine, while losing sectors were mostly just taking a pause within uptrends. One exception is the oil and gas sector.
U.S. crude oil prices fell 1% to $72.32 a barrel.
The 10-year Treasury yield tumbled 11.5 basis points to 4.17%, hitting a three-month low. The odds of a March Fed rate cut are now over 65% vs. about 35% a week earlier.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) closed just below break-even. Microsoft stock is a huge IGV holding, with SentinelOne also in the fund. The VanEck Vectors Semiconductor ETF (SMH) was flat. NVDA stock is the largest SMH holding, with AMD also a significant component.
Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) declined 0.9% while ARK Genomics (ARKG) retreated 3.25%. Tesla stock is a major holding across ARK Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) slumped 2.5%, and the Global X U.S. Infrastructure Development ETF (PAVE) gave up 1.1x%. U.S. Global Jets (JETS) descended 1.55%. The SPDR S&P Homebuilders ETF (XHB) dipped 0.5%, with TOL stock an XHB member. The Energy Select SPDR ETF (XLE) shed 1.75%, and the Health Care Select Sector SPDR Fund (XLV) edged down 0.1%.
The Industrial Select Sector SPDR Fund (XLI) stepped back 0.8%. The Financial Select SPDR ETF (XLF) declined 0.5%.
Tesla Vs. BYD: EV Giants Vie For Crown, But Which Is The Better Buy?
Megacap Stocks
Megacap stocks had paused or pulled back over the past couple of weeks, but stepped up on Tuesday.
Apple stock rose 2.1% to 193.42, clearing a 192.93 cup-with-handle buy point. AAPL stock closed with a $3.008 trillion valuation, back above the $3 trillion level. On Tuesday, Apple iPhone manufacturer Foxconn raised its Q4 outlook after reporting strong November revenue.
Amazon stock climbed 1.4% to 146.88, bouncing from the 21-day line and reclaiming a 145.86 buy point.
Tesla stock gained 1.3% to 238.72, rebounding from the 50-day line and snapping a four-day losing streak. Shares pulled back from an intraday high of 246.66. The EV giant has a 278.98 double-bottom buy point, but investors could use the Nov. 29 high of 252.75 as an early entry.
On Tuesday, weekly EV registration data showed Tesla China sales continuing to ramp up, likely helped by the updated Model 3. The EV giant has offered some incentives recently in China, but they’ve been relatively modest given the fierce EV price war there. On the flip side, weak German sales may have cooled Tesla stock enthusiasm Tuesday afternoon.
Nvidia stock gained 2.3% to 465.66 on Tuesday, moving off its 50-day line after a three-day slide. A 476.09 double-bottom buy point is still valid, but NVDA stock has to get above its 21-day line first. It’s possible that Nvidia will forge a new consolidation. Volume was modestly below average after several high-volume down days in the past couple of weeks.
The AMD AI event Wednesday is important for Nvidia, which has dominated the AI chip business so far.
MSFT stock edged up 0.9% to 372.52. On Monday, shares undercut the 366.78 cup-base buy point, but managed to close above that entry as well as the 21-day line. Microsoft stock is 7.4% above its 50-day line, no longer extended after being 11% above that key level on Nov. 10, when it first broke out.
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What To Do Now
The stock market rally still looks healthy. Market breadth has improved, Tuesday notwithstanding.
There are some stocks flashing buy signals, but investors may simply want to stand pat while the major indexes and some leading stocks consolidate. If they haven’t already, investors could take some profits in extended stocks after big November gains. But that depends on exposure and concentration levels as well as your personal investing style.
Keep working on watchlists. Make sure to screen well beyond growth stocks, as several other sectors have stepped up.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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