Upon Hours, Dow Jones Futures Fall Slightly As Stock Market Rally Sees Pullback
After hours, Dow Jones futures fell slightly, as did S&P 500 futures and Nasdaq futures. There was an overnight plunge in Trade Desk (TTD) on the outlook. The stock market rally finally saw a pullback, with the S&P 500 and Nasdaq composite breaking long win streaks. Additionally, there was a spike in Treasury yields on a poor 30-year Treasury bond auction. Fed chief Jerome Powell stated that the central bank is “not confident” about reigning in inflation. On Thursday, there were several earning gap-ups, including Duolingo (DUOL) and Affirm Holdings (AFRM). Nvidia (NVDA) broke out Thursday morning, but saw a reduction in gains. Meanwhile, China’s Li Auto (LI) reported booming earnings. Overall, a market pullback is likely constructive as market indexes and leading stocks catch their breath. Palantir Technologies (PLTR) and MercadoLibre (MELI) are close to forming handles. Trade Desk earnings modestly topped Q3 views, whereas the digital ad platform guided low on Q4 revenue. TTD stock fell more than 25% in overnight action, then falling 2.6% in Thursday’s session, also dropping below the 50-day line. Meanwhile, ANET stock fell late. Arista Networks (ANET) forecasted revenue growth slightly below consensus. Nvidia stock is on the IBD Leaderboard. Li Auto, Nvidia, Trade Desk, MercadoLibre, Arista Networks and DUOL stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value, S&P 500 futures down 0.15%, and Nasdaq 100 futures declined 0.3%. The 10-year Treasury yield rose slightly to 4.65%. However, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Stock Market Rally
The stock market rally saw a retreat, with the S&P 500 snapping an eight-session win streak and the Nasdaq down for the first time in 10 sessions. The Dow Jones Industrial Average declined 0.65% in Thursday’s stock market trading. The small-cap Russell 2000 tumbled 1.5%. The Invesco S&P 500 Equal Weight ETF (RSP) sank 0.85%, and the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.9%, hitting resistance at the 50-day line. While market breadth remains a challenge, technology, especially software, is doing well.
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gave up 0.8% and the VanEck Vectors Semiconductor ETF (SMH) dipped 0.2%. The ARK Innovation ETF (ARKK) skidded 3.1%, the Health Care Select Sector SPDR Fund (XLV) tumbled 2.1%, and the Industrial Select Sector SPDR Fund (XLI) edged down 0.2%.
Nvidia Stock
Nvidia stock hit 482.30 just before midday. Thursday marked the stock’s first up day in above-average volume in more than two months. The RS line hitting a new high as or before a stock breaks out is a bullish sign.
MercadoLibre Stock
MELI stock declined 1.9% to 1,341.38. After Friday, MercadoLibre stock should have a handle on its cup base, with a 1,398.15 buy point.
Palantir Stock
PLTR stock fell 1.1% to 18.29 on Thursday. Shares are only two days into a possible handle on a daily chart.
Tesla Stock
Tesla stock tumbled 5.5% to 209.98, falling from the 200-day line. HSBC initiated TSLA stock at “reduce,” with a 146 price target.
China EV Stocks
Li Auto stock retreated 4.3% to 37.65 on Thursday, while BYD stock slipped 1% to 31.09. For now, a market pullback may be constructive, and the major indexes and leading stocks will catch their breath.
