Dow Jones futures fell slightly Thursday morning while S&P 500 futures rose and Nasdaq futures leapt as NVDA stock jumped on results. The Nvidia earnings report fueled chip and AI stocks. Snowflake, Splunk and NetApp also reported Wednesday night.
The stock market rally attempt ran up on Wednesday ahead of the results, with improving breadth. Treasury yields fell sharply amid some weaker economic data as well as disappointing results or guidance from more retail and consumer plays.
The market is gaining some momentum but has not yet confirmed its rally attempt.
Nvidia stock raced higher overnight. SPLK stock and Snowflake also are earnings winners, while NetApp fell slightly.
Meanwhile, a slew of AI-related names also rose slightly to sharply on Nvidia earnings. Some could offer buy signals Thursday.
Early AI plays rising include chipmakers Broadcom and Marvell Technology to software makers like ServiceNow, Adobe, Palantir Technologies, C3.ai and Samsara as well as server maker Super Micro Computer. Don't forget megacaps such as Microsoft, Meta Platforms and Google parent Alphabet.
In other news, Boeing found a new 737 Max manufacturing issue that may have resulted in hundreds of incorrectly drilled holes. It's a job done by supplier Spirit AeroSystems. Boeing says it has a fix. Near-term deliveries could be delayed, but the issue reportedly doesn't affect Max jets in operation. BA stock fell modestly early Thursday, testing a buy point and 50-day line. Spirit Aero tumbled.
NVDA stock and Meta are on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. ADBE stock and ServiceNow are on the IBD 50. Google stock, Meta and ServiceNow are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures fell 0.15% vs. fair value, with Boeing stock acting as a drag. S&P 500 futures climbed 0.5% while Nasdaq 100 futures jumped 1%. Nvidia stock is a major Nasdaq 100 and S&P 500 component, along with the likes of Broadcom, ServiceNow, Adobe, Microsoft, Meta and Google.
Futures signal that the S&P 500 and Nasdaq will test or reclaim their 50-day lines at Thursday's open.
The 10-year Treasury yield rose a few basis points to 4.23%.
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 attempt had a solid session heading into Nvidia earnings, led by tech giants.
The Dow Jones Industrial Average rose 0.5% in Wednesday's stock market trading. The S&P 500 index popped 1%. The Nasdaq composite jumped 1.6%. The small-cap Russell 2000 climbed 1%.
U.S. crude oil prices fell 0.9% to $78.89 a barrel, down 2.9% so far this week.
Copper futures climbed 1.4%, now up 4.2% over a five-session winning streak.
The 10-year Treasury yield tumbled 13 basis points to 4.2%, retreating from 15-year highs. Weaker-than-expected economic data, and a downward revision to job growth in the 12 months ending in March, may ease pressure on Fed chief Jerome Powell heading into Friday's big Jackson Hole speech on Friday morning.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 1.3%. The iShares Expanded Tech-Software Sector ETF gained 1.6%. The VanEck Vectors Semiconductor ETF popped 2.2%. NVDA stock is the No. 1 holding for SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF advanced 2.3% and ARK Genomics ETF 2.1%.
SPDR S&P Metals & Mining ETF edged up 0.1% and the Global X U.S. Infrastructure Development ETF climbed 1%. U.S. Global Jets ETF ascended 0.6%. SPDR S&P Homebuilders ETF stepped up 2.1%. The Energy Select SPDR ETF fell 0.25% and the Health Care Select Sector SPDR Fund rose 0.3%.
The Industrial Select Sector SPDR Fund rebounded 1%.
The Financial Select SPDR ETF advanced 1%. The SPDR S&P Regional Banking ETF climbed 1.3%.
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Nvidia Earnings
Nvidia earnings easily beat views, thanks to booming data-center demand, reflecting the massive AI boom. The chip giant also guided higher for the current Q3 and announced a $25 billion NVDA stock buyback.
Expectations had been extremely high for Nvidia results.
Nvidia stock rose strongly in overnight trading, though off Wednesday evening peaks, signaling a record high.
Shares rose 3.2% to 471.16 in Wednesday's regular session. Nvidia stock hit a record intraday high of 481.87 on Tuesday, briefly clearing a short consolidation, but closed down 2.8% to 456.68. That's after spiking 8.5% on Monday, flashing buy signals. The relative strength line, the blue line in the charts provided, hit a new high Monday.
AI Stock Reaction
Chipmakers Broadcom and Marvell rose solidly in late trading. AVGO stock and MRVL rose modestly Wednesday to about their 50-day moving averages. The AI chip plays could offer buy signals, but Marvell earnings are due Thursday night, with Broadcom on Aug. 31.
Software giants ServiceNow and Adobe edged higher in after-hours action. On Wednesday, NOW stock rose slightly, clearing the 50-day line and breaking a trendline. ADBE stock climbed modestly from its 21-day line within a short consolidation. Both Adobe and ServiceNow have generative AI partnerships with Nvidia.
Among more volatile AI software plays, PLTR stock, AI stock and IOT rose solidly in late trade. All three stocks bounced 4%-5% Wednesday, but well below their 50-day lines.
Snowflake and Splunk earnings Wednesday night also may be impacting software makers, along with AI leader Nvidia.
SMCI stock popped in extended action. Super Micro stock jumped 7.6%, regaining its 50-day line after a big earnings sell-off this month.
As for megacaps, MSFT stock rose modestly in overnight action, signaling a possible test of the 50-day. Microsoft rose 1.4% on Wednesday, regaining its 21-day line. META stock gained modestly late, possibly foreshadowing an aggressive entry, after rising 2.3% to close just shy of its 50-day.
Google stock climbed slightly in extended trade. Shares rose 2.55% Wednesday, within a buy zone, while also topping an alternate entry. The internet giant announced upcoming security improvements to Gmail and other Google Workspace products, some of which will use AI.
All three are big buyers of Nvidia AI chips.
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Other Key Earnings
SNOW stock rose solidly early Thursday. Snowflake earnings topped views while the data analytics software maker guided in line. Snowflake stock climbed 2% to 155.70 on Wednesday, just retaking its 200-day line.
SPLK stock surged overnight, signaling a bounce above the 50-day line after Splunk earnings easily beat views and revenue also topped. The database and security software maker guided higher. Splunk stock advanced 1.8% to 99.93 on Wednesday. Shares have a 112.03 flat-base buy point.
NTAP stock fell slightly in extended trade after NetApp earnings slightly beat fiscal Q1 views. The data storage giant guided in line for Q2. NetApp stock edged up 2 cents on Wednesday to 76.53, just below the 50-day line. NTAP stock has been on track to have a flat base after this week.
NetApp rival Pure Storage, which reports next week, was slightly higher in late trade. PSTG stock is already flashing an early entry from the 50-day line within its own flat base.
Market Rally Analysis
The stock market rally attempt made a strong move. Market breadth was strong Wednesday, after decliners trumped winners in the prior two sessions.
The market rally still needs a follow-through day to confirm the uptrend. The Nasdaq's price gain was strong enough to qualify for an FTD, but volume was slightly below Tuesday's level. The S&P 500 had higher volume but its solid price gain wasn't quite sufficient to meet the FTD standards.
But, with Wednesday's advance, if the market were to stage a follow-through day from these levels, the major indexes would very likely retake the 50-day line in the process.
Several tech names flashed aggressive signals Wednesday, but Nvidia earnings made that highly risky.
The energy sector still looks strong, along with the housing, industrial, construction and steel areas to some extent, along with some medicals. Banks and consumer plays are generally struggling.
Fed chief Powell's speech Friday morning will likely swing stocks and Treasury yields.
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What To Do Now
The stock market rally attempt is showing promise, but we're just at the "engaged to be engaged" step.
Investors could try to take advantage of possible buying opportunities, but it's a good idea to wait a few minutes, or more, after the open. An Nvidia-led AI rally could gain momentum Thursday, or it could fizzle out.
Add exposure gradually, to limit the risk of the market slashing gains or reversing lower on any given day.
Have your watchlists ready, and don't just have tech growth names in mind.
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.
