Dow Jones futures rose modestly early Friday, along with S&P 500 futures and Nasdaq futures, as Apple and Amazon.com headlined key earnings overnight. The October jobs report is on tap.
The stock market rally had a damaging day, with all the major indexes breaking or testing key levels. The Nasdaq led the sell-off as megacaps Microsoft and Meta Platforms slumped, weighing on techs generally.
That included Nvidia, Broadcom, Arista Networks and other artificial intelligence hardware plays despite strong AI-led capital spending from Microsoft and Meta, as well as Google-parent Alphabet late Tuesday.
Tesla extended its retreat this week after last week's earnings surge.
Nvidia and Meta stock are on IBD Leaderboard. Nvidia stock is on SwingTrader. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia, Meta and Arista stock are on the IBD 50. Arista Networks and Broadcom stock are on the IBD Big Cap 20.
The video embedded in this article reviews Thursday's stock market action and analyzes Meta stock, GoDaddy and Netflix.
Dow Jones Futures Today
Dow Jones futures climbed 0.4% vs. fair value. S&P 500 futures rose 0.4%. Nasdaq 100 futures were up 0.45%. Apple stock is a Dow Jones, S&P 500 and Nasdaq giant, with Amazon also an S&P 500 and Nasdaq megacap.
Dow component Boeing rose modestly late as the aerospace giant and labor union reached a sweetened pay deal to end the strike.
The 10-year Treasury yield rose to 4.3%
Crude oil futures rose 2% amid a report that Iran plans to strike at Israel via pro-Iran militias in Iraq.
The jobs report is due at 8:30 a.m. ET, with economists expecting a slowdown in hiring amid hurricane impacts. At 10 a.m. ET, ISM will release its October manufacturing index, which is expected to remain below the neutral 50 level.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Apple Earnings
Apple earnings slightly beat fiscal Q4 views. But management signaled slower growth in the key holiday quarter.
Apple stock declined slightly early Friday. Shares fell 1.8% to 225.91 in Thursday's session, testing the 50-day line. AAPL stock has a 237.23 consolidation buy point, according to MarketSurge, but has an early entry around 234.
Amazon Earnings
Amazon earnings comfortably beat while the cloud-computing arm, Amazon Web Services, met views for a 19% gain. That followed strong growth from Google Cloud and Microsoft Azure.
The cloud-computing and e-commerce giant gave mixed Q4 guidance.
Amazon stock rose strongly in extended trade. Shares declined 3.3% Thursday to 186.40, just above the 50-day line. On Wednesday, AMZN stock flirted with a 195.37 early or handle entry before closing near session lows.
Ailing chipmaker Intel jumped and collaboration software maker Atlassian soared overnight on their earnings.'
Early Friday, Exxon Mobil and Dow giant Chevron rose modestly on earnings beats.
Nvidia stock rose modestly following the Amazon and Intel earnings, while Arista edged higher.
Stock Market Rally
The stock market rally sold off Thursday and never showed much fight during the session. Blame megacap earnings as well as perhaps caution heading into further big quarterly results, economic data, the presidential election and more.
The Dow Jones Industrial Average lost 0.9% in Thursday's stock market trading, undercutting its 50-day line. The S&P 500 index tumbled 1.9% and the Nasdaq composite sold off 2.8%, both closing below their 21-day lines for the first time since Sept. 10. Both are near their 50-day averages. The small-cap Russell 2000 sank 1.6%, dropping below its 21-day and 50-day lines.
Microsoft gapped below all its moving averages on weak revenue guidance and heavy capital spending plans. Meta fell solidly — still with a decent chart — amid big spending plans, despite upbeat Q4 revenue targets.
But while AI spending weighed on the internet giants, their results didn't lift AI hardware. Nvidia stock fell 4.85% on Thursday, below its 21-day line. Broadcom gave up 3.9%, below the 50-day. Arista, which boasts Microsoft and Meta as huge customers, fell 2.4% to between its 21-day and 50-day lines.
Tesla stock fell just over 3% to 249.71, bringing its weekly loss to 7.2%. TSLA stock still has the bulk of last week's 22% surge on earnings, but is in danger of triggering the 7%-8% sell rule from the 264.86 cup-with-handle buy point.
There were big earnings winners Thursday, including Lemonade, Carvana, Sprouts Farmers Market, Booking and Twilio. But there were many big losers as well, including SharkNinja, Robinhood Markets and Monolithic Power Systems
U.S. crude oil prices climbed 0.95% to $69.26 a barrel.
The 10-year Treasury yield climbed two basis points to 4.28%. Once again, the benchmark yield topped the 4.3% level intraday but fell back. Core PCE inflation ran fractionally above views, but a tame wage report countered that.
Former Huge Winner Now S&P 500's Biggest Loser
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.7%. The iShares Expanded Tech-Software Sector ETF slid 2.6%, with Microsoft stock a key member. The VanEck Vectors Semiconductor ETF tumbled 3.6%, with Nvidia and Broadcom stock big members.
ARK Innovation ETF sold off 4.85% and ARK Genomics ETF lost 3.6%.
SPDR S&P Metals & Mining ETF declined 1.5%. SPDR S&P Homebuilders ETF shed 0.7%. The Energy Select SPDR ETF climbed 0.6% and the Health Care Select Sector SPDR Fund dropped 0.8%.
The Industrial Select Sector SPDR Fund gave up 1.15%. The Financial Select SPDR ETF fell 1.4%.
Time The Market With IBD's ETF Market Strategy
What To Do Now
The stock market rally is showing some weakness on the major indexes. A good day or two could set things right, but further losses might show some real damage.
Leading stocks are generally showing similar action, with earnings winners and losers canceling each other out. While some stocks with earnings gaps have kept running or held up, others such as Tesla stock have given up much or all those gains.
In this technical environment and with so much news in the next few days, it's not a great time to be adding stocks.
From a portfolio perspective, you might consider easing exposure, which might happen anyway if you're paring losers or laggards. Beyond those moves, be aware of upcoming earnings for your holdings, as well as notable related reports. If you don't have a good cushion, you might consider taking partial profits, hedging the position or simply exiting ahead of the news.
The current pullback could create a number of buying opportunities, especially if animal spirits revive in a week or so. So keep working on your watchlists. Definitely stay engaged and make sure you have a game plan in place if the market weakens further.
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