Dow Jones futures were little changed early Friday, while S&P 500 futures and Nasdaq futures declined as Amazon stock became the latest megacap earnings meltdown. Apple rose slightly.
Exxon Mobil and Chevron stock rose on strong earnings beats early Friday.
The stock market rally had a mixed Thursday, with the Dow Jones rising on earnings reports and the Nasdaq sinking on Meta Platforms results and guidance. But the key indexes all closed at or near session lows. That came despite Treasury yields falling below key levels after third-quarter GDP showed U.S. economic growth topping views while inflation cooled significantly.
In addition to Apple and Amazon.com, Vertex Pharmaceuticals, First Solar, Texas Roadhouse, DexCom and T-Mobile also reported Thursday night.
Apple stock edged higher in premarket trade. The iPhone giant slightly beat earnings and sales forecasts, but signaled slower growth ahead.
Amazon stock plunged on weak cloud revenue and terrible Q4 guidance. Vertex stock climbed solidly overnight on strong Q3 results. FSLR stock fell modestly on weak Q3 results. Texas Roadhouse stock was down in late trading despite beating views. T-Mobile stock rose on mixed Q3 results. DexCom stock popped on strong earnings.
Chevron and Exxon Mobil reported third-quarter profit and revenue that were well above views. Chevron and XOM stock rose modestly early Friday. CVX stock signaled a possible move to a buy point. XOM stock could move out of a buy zone. Both have run up considerably over the past few weeks.
In other news, Tesla CEO Elon Musk officially closed his $44 billion, $54.20 a share deal for Twitter, already firing the CEO and several top executives.
TXRH stock is on IBD Leaderboard, with DXCM stock an earnings options play for Leaderboard. Vertex and XOM stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were about even with fair value, with AAPL stock, Chevron and Intel providing some support for blue chips. S&P 500 futures slumped 0.5%. Nasdaq 100 futures lost 0.95%.
The 10-year Treasury yield rose 6 basis points to 4%.
Crude oil futures fell 1%. Copper prices sank nearly 2%.
Hong Kong's Hang Seng index tumbled 3.7%, the lowest since April 2009, with Chinese internet and EV stocks leading the way. Chinese cities are reimposing restrictions amid rising Covid cases.
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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Stock Market Rally
The stock market rally had a mixed session, closing near session lows with the major indexes diverging on earnings.
The Dow Jones Industrial Average rose 0.6% in Thursday's stock market trading. The S&P 500 index sank 0.6%. The Nasdaq composite tumbled 1.6%. The small-cap Russell 2000 edged up 0.1%.
The 10-year Treasury yield fell 7 basis points to 3.94%, dropping below the key 4% level.
GDP rose at a 2.6% annual rate in Q3, returning to growth after two quarters of slim declines. That was slightly above estimates. However, inflation measures showed a faster-than-expected deceleration. Also, the European Central Bank hiked rates by 75 basis points, as expected, but three members favored a half-point move. The post-meeting statement also was slightly less hawkish.
Markets still expect the Fed to hike rates by 75 basis points for a fourth straight meeting next week, though it's no longer a lock. They see a strong chance that the Fed will hike rates by just 50 basis points.
U.S. crude oil prices rose 1.3% to $89.05 a barrel.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF fell 0.4%, while the Innovator IBD Breakout Opportunities ETF rose 0.6%. The iShares Expanded Tech-Software Sector ETF climbed 0.6%. The VanEck Vectors Semiconductor ETF declined 1.25%.
SPDR S&P Metals & Mining ETF dipped 0.3%. U.S. Global Jets ETF ascended 1.3%. The Energy Select SPDR ETF gained 0.4%, with XOM stock and Chevron both massive components. The Health Care Select Sector SPDR Fund fell 0.5%.
Reflecting more-speculative story stocks, ARK Innovation ETF lost a fraction and ARK Genomics ETF slid 1.7%.
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Earnings Reports
Apple earnings edged past fiscal Q4 views while revenue modestly beat. Both iPhone and services revenue slightly missed targets. On the earnings call, management said it expected growth to decelerate in the holiday Q1 vs. Q4. Apple singled out the strong dollar as major headwind.
AAPL stock rose less than 1%, swinging between small gains and losses. Apple stock fell just over 3% to 144.80 on Thursday, falling below its 21-day line after hitting resistance at its 50-day line earlier in the week.
Amazon earnings slightly beat views while revenue fell short, in part due to weakness at the high-margin Amazon Web Services. The e-commerce and cloud-computing giant warned on Q4 sales. Cloud-software plays, already rocked by disappointing cloud-computing growth by Microsoft, slumped again on Amazon.
AMZN stock crashed 14% in premarket trade, signaling the worst levels in over two years. Shares sank 4.1% to 110.96 on Thursday after falling back below their 21-day line on Wednesday. Microsoft cloud-computing weakness and online ad woes for Meta and Google weighed on Amazon stock this week.
Vertex earnings and revenue topped Q3 consensus. The biotech giant also raised full-year sales targets.
VRTX stock rose 5% overnight. That's after Vertex stock tumbled 7.5% in Thursday's session to 287.89, knifing below the 306.05 flat-base buy point and closing below its 50-day line.
First Solar reported a wider-than-expected Q3 loss while revenue fell short.
FSLR stock fell 1.5% early Friday, well off overnight lows but signaling a test of the 50-day line. Shares edged down 0.2% to 131.18 on Thursday, holding above its 50-day line after regaining that key level Wednesday on Enphase Energy earnings. First Solar stock is consolidating, but needs more time to forge a proper base.
T-Mobile earnings topped while revenue fell short. The wireless giant added more mobile and broadband customers than expected. TMUS stock rose 3% in overnight trade. Shares dipped 0.15% to 140.63 on Thursday. T-Mobile stock is hitting resistance at a 142.79 buy point in a double-bottom base.
Texas Roadhouse earnings topped views modestly. TXRH stock fell 1% in extended trade. Shares rose 1.5% to 98.75, climbing in a buy zone above a flat base, according to MarketSmith analysis.
DexCom earnings and sales also exceeded consensus. DXCM stock leapt 11% early Friday, signaling a move into a buy zone. Shares dipped 1.3% to a 101.25 close. DexCom stock had formed a shelf with a 105.43 buy point, formed just above the 200-day line and a bottoming base.
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Market Rally Analysis
The stock market rally diverged on Thursday, making it hard to discern clear patterns. Strong earnings lifted the Dow Jones, while the Nasdaq sank as Meta Platforms plunged and other megacap techs retreated. The S&P 500 also lost ground.
The Dow Jones, though rising, closed near lows for a second straight session. The S&P 500 is hitting resistance at its 50-day line, though it's still above its 10-week. The Nasdaq has fallen back from around its 50-day/10-week lines and undercut its 21-day line.
Advancers led decliners on the NYSE, but trailed on the Nasdaq.
The 10-year Treasury yield tumbled again Thursday. Falling yields are a positive for stocks, though that relationship doesn't hold every day.
VRTX stock and some select other medicals retreated sharply Thursday on no clear news, adding to earnings-fueled volatility. Several other health care names showed solid action, however.
Energy stocks are still doing well, reflecting rising prices. Defensive-minded discounters and auto-parts retailers are looking strong, along with several restaurant stocks.
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What To Do Now
The stock market rally is showing volatile action around key levels, mostly but not entirely on earnings. It's a tricky environment for trading.
Investors can choose to slightly add exposure here, but may want to wait until the indexes calm down and clear key levels.
The market isn't giving a reason to reduce exposure overall, but if stocks erase gains, don't let slim losses turn into large ones.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
