Dow Jones futures edged higher overnight, along with S&P 500 futures and Nasdaq futures, after the stock market had huge gains following Donald Trump's election victory. The Fed meeting ends Thursday afternoon with a rate cut expected and the policy outlook in focus.
MercadoLibre, Arm Holdings, AppLovin, Duolingo and Fair Isaac were among the notable earnings reports Wednesday night.
The stock market rally had a big postelection jump, with all the major indexes hitting record highs. Small caps spiked to their best levels since the November 2021 peak. Bitcoin-related plays surged. Financials, especially regional banks, had massive gains, but there were broad-based advances.
Many leading stocks gapped out of bases, rebounded from or above key support or simply broke out. Those include Tesla, Nvidia and Dow Jones giants JPMorgan Chase and Caterpillar.
Investors can take advantage of the buying opportunities amid the powerful bullish signals, but keep a level head.
Nvidia and MercadoLibre are on IBD Leaderboard, with Tesla stock added to the Leaderboard watchlist. Nvidia stock is on SwingTrader. FICO stock is on IBD Long-Term Leaders. Duolingo stock and Nvidia are on the IBD 50. MercadoLibre stock is on IBD Sector Leaders.
FICO, or Fair Isaac, was Wednesday's IBD Stock Of The Day.
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Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures and Nasdaq 100 futures edged higher.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Federal Reserve Meeting
The Federal Reserve remains a near-lock to cut rates by a quarter point at 2 p.m. ET Thursday. But the focus will be on the rate-cut outlook in the wake of Trump's election win. Fed chief Jerome Powell, who will speak at 2:30 p.m. ET, may choose his words carefully.
How Trump's Win Shifts The Fed Rate-Cut Outlook
Key Earnings
AppLovin stock and Lyft skyrocketed on earnings, while Hubspot jumped. Qualcomm popped while Gilead Sciences rose modestly. FICO edged higher. Qualcomm might offer an aggressive entry.
On the downside, MercadoLibre tumbled while Duolingo and Arm fell solidly.
Early Thursday, nuclear-and-AI-utility play Vistra is on tap, along with software makers Datadog and Dynatrace.
Stock Market Rally
The stock market rally had a huge postelection gain.
The Dow Jones Industrial Average spiked 3.6% in Wednesday's stock market trading, its best postelection gain since 1896. The S&P 500 index leapt 2.5%. The Nasdaq composite jumped 2.95%. The small-cap Russell 2000 erupted for a 5.8% gain.
The Dow Jones, S&P 500 and Nasdaq all hit record highs. The Russell 2000 is at its best levels since its November 2021 peak.
U.S. crude oil prices dipped 0.4% to $71.69 a barrel.
The 10-year Treasury yield leapt 14 basis points to 4.425%, hitting a four-month high.
Sector ETFs
Financials surged, with the Financial Select SPDR ETF up 6.1% and the SPDR S&P Regional Banking ETF spiking 13.4%. Insurers and payment stocks also were big winners.
The Industrial Select Sector SPDR Fund jumped 3.9%, SPDR S&P Metals & Mining ETF soared 8.1%, Energy Select SPDR ETF gained 3.8% and the Global X U.S. Infrastructure Development ETF ran 6.75% higher.
Medicals were a mixed bag, with the Health Care Select Sector SPDR Fund edging up 0.1%
SPDR S&P Homebuilders ETF fell nearly 1% on higher Treasury yields.
The KraneShares CSI China Internet ETF sank 2% on Trump tariff concerns.
As for growth ETFs, the Innovator IBD 50 ETF popped 5.3%. The iShares Expanded Tech-Software Sector ETF rallied 4.1%. The VanEck Vectors Semiconductor ETF stepped up 2.6%, with No. 1 holding Nvidia stock surging but with mixed action elsewhere.
ARK Innovation ETF vaulted 8.2% while ARK Genomics ETF gained 2.9%. Tesla stock is a huge Ark Invest holding. Cathie Wood has built up a big Nvidia stock holding.
Time The Market With IBD's ETF Market Strategy
Tesla Stock
Tesla stock spiked nearly 15% to 288.53 on Wednesday, gapping out of a base to a 15-month high. Shares are extended from a 264.86 cup-with-handle buy point that was arguably still valid. However, TSLA stock now has an alternate handle entry at 273.54. The buy zone runs up to 287.22.
Tesla CEO Elon Musk was a huge supporter of Donald Trump. Trump has talked about naming Musk to run a government efficiency effort, though it's unclear how official that might be.
Trump has talked about removing EV tax credits, which have been crucial for Tesla, though it seems unlikely he could get Congress to go along. The returning president is likely to ease regulatory probes and oversight on Tesla and Musk's other companies.
Nvidia Stock
Nvidia stock jumped 4% to 145.56, moving back above a 140.76 consolidation buy point and hitting an all-time high, according to a MarketSurge chart. Investors could use 144.42 as a high-handle entry.
Dow Stocks Soaring
JPMorgan stock leapt 11.5% to 247.06, vaulting past a 225.48 buy point from a shallow cup base. Bank stocks soared on hopes for a widening yield curve, hopes for easier regulation and generally more lending and banking business.
Caterpillar stock gapped up 8.7% to 416.88, surging to a record high after rising off the 50-day/10-week line Tuesday following a gradual pullback to near the top of a prior consolidation.
Both Dow giants were actionable Wednesday, though both are now extended from buy points and the 10-week line. Investors could wait to see if these stocks pull back or pause and provide a slightly safer entry.
What To Do Now
The stock market has staged a powerful move, with all the major indexes breaking out to new highs. It was a broad-based performance, with some huge gains for several sectors and many leading stocks.
Wednesday felt like a game-changing moment, suggesting the market rally is starting a powerful run.
The session was an opportunity to make some buys, especially for investors who pared exposure amid the recent market pullback and ahead of the election results.
The market action shows why investors wanted to keep watchlists up to date, and why they should freshen up those lists again.
Don't load up too much in a single day. It's possible that the market will rethink the election results somewhat. Also, the Fed meeting and continued heavy earnings could hit the indexes or specific sectors or stocks.
If you're at an all-you-can-eat buffet, the goal isn't to eat as much as possible in a single bite. You want to pace yourself, gradually but steadily eating to a full stomach or beyond.
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