Dow Jones futures fell solidly early Friday, along with S&P 500 futures and especially Nasdaq futures, after a Trump-backed bill to avoid a government shutdown failed. Bitcoin continued a sharp sell-off.
Nike and FedEx moved on earnings, with Carnival and the Federal Reserve's favorite inflation gauge due early Friday.
Novo Nordisk crashed early Friday after its experimental weight-loss drug CagriSema missed expectations in a late-stage trial. Eli Lilly and Viking Therapeutics jumped.
The stock market rally tried to rebound at Thursday's open, but gains fizzled, with the major indexes closing narrowly mixed. Treasury yields continued to surge, while Micron Technology plunged.
Nvidia rose Thursday but pared gains and sits below key levels. Microsoft gave up intraday gains but now has a handle buy point. Tesla fell slightly Thursday after Wednesday's sell-off, but found short-term support. All fell early Friday.
GE Vernova made a bullish bounce off the 50-day line. But many other stocks broke down.
Thursday's short-lived, anemic bounce didn't inspire much confidence. Investors should be cautious, looking to reduce exposure vs. adding positions.
Nvidia is a hedged position on IBD Leaderboard. Tesla stock is on the watchlist. GE Vernova stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. GE Vernova was Thursday's IBD Stock Of The Day.
Trump-Backed Funding Bill Fails
A House GOP bill backed by President-elect Donald Trump to avert a government shutdown failed Thursday night as dozens of Republican lawmakers voted no along with almost all Democrats. Trump and Tesla CEO Elon Musk derailed a prior continuing resolution Wednesday.
Without a funding measure, a partial government shutdown is due to start Friday night.
Separately, Trump threatened the European Union with tariffs if it doesn't buy more U.S. oil and gas. Over a month ago, the EU's leader indicated the bloc could buy more U.S. gas.
Dow Jones Futures Today
Dow Jones futures fell 0.6% vs. fair value, with Nike stock a blue chip member. S&P 500 futures declined 1% and Nasdaq 100 futures tumbled 1.45%, with TSLA stock and Nvidia among the losers. Futures turned lower Thursday night after the government funding bill failed.
The 50-day line could loom as a test for the Nasdaq.
The 10-year Treasury yield fell to 4.55%. Crude oil futures edged lower.
Bitcoin tumbled to $94,000, continuing a sell-off. Bitcoin-related stocks fell again.
The Fed's favorite inflation measure, the core PCE price index, is due out at 8:30 a.m. ET. The Fed seems unlikely to cut rates again in the near future, but inflation and economic reports in the next several weeks will reinforce or shake that perception.
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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FedEx, Nike Earnings
FedEx earnings beat views but revenue fell short while guidance was light. But the shipping giant said it plans to spin off its FedEx Freight unit into a separately traded public company by mid-2026.
Shares jumped early Friday. FDX stock rose 1% to 275.88 on Thursday, just below the 200-day line after falling below that key level Wednesday. FedEx stock has a 3133.84 buy point.
Nike earnings and revenue were better than feared as new CEO Elliott Hill tries the engineer a turnaround. NKE stock initially jumped late but reversed sharply lower after the Dow shoe and apparel giant gave weak guidance. Shares edged up 0.3% to 77.10 on Thursday, below all the moving averages in a three-year slump.
Carnival earnings are due early Friday. CCL stock rose 1.45% on Thursday, but hit resistance at the 21-day line after losing 3.5% Wednesday. A pullback to the 50-day line could offer a buying opportunity.
Fed, Treasury Yields Put Trump On Notice
Stock Market Rally
The stock market rally tried to bounce Thursday, but it faded almost immediately with generally negative closes for the key indexes and ETFs. Treasury yields kept rising, a growing headwind for stocks.
The Dow Jones Industrial Average broke a 10-day losing streak in the weakest possible way, rising a fraction in Thursday's stock market trading. The S&P 500 index fell 0.1% after briefly retaking its 50-day line. The Nasdaq composite also closed down 0.1%, after a short-lived retaking of the 21-day.
The small-cap Russell 2000 fell 0.45%. The Invesco S&P 500 Equal Weight ETF sank 0.3% to a three-month low. The First Trust Nasdaq 100 Equal Weighted Index ETF gave up 0.9%, sinking to its lowest level since Election Day, Nov. 5.
U.S. crude oil prices fell 0.95% to $69.91 a barrel.
Bitcoin fell 4.3% to $96,274.27, down 9.8% over two days.
The 10-year Treasury yield jumped 7.5 basis points to 4.57%, hitting the highest levels since the end of May. That's after spiking 11 basis points on Wednesday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 0.2%. The iShares Expanded Tech-Software Sector ETF climbed 0.4%, with Microsoft stock a major holding. The VanEck Vectors Semiconductor ETF declined 1.3%. Nvidia stock is the No. 1 holding in SMH, with Micron also a big holding
ARK Innovation fell 0.7% and ARK Genomics edged up 0.1%. Tesla stock is a major holding across ARK Invest's ETFs. Cathie Wood's ARK has also built up a big NVDA stake.
The SPDR S&P Metals & Mining ETF gave up 1.2%. The SPDR S&P Homebuilders ETF slumped 2.2%. The Energy Select SPDR ETF shed 0.9%, and the Health Care Select Sector SPDR Fund retreated 0.8%.
The Industrial Select Sector SPDR Fund dipped 0.1%. GE Vernova and FedEx stock are notable components.
The Financial Select SPDR ETF rose 0.4%.
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Nvidia Stock
Nvidia stock rose 1.4% to 130.68. That snapped a five-day losing streak, during which the AI chip giant tumbled well below its 50-day line. But it was an inside day, with NVDA stock closing well off session highs.
NVDA stock may be working on a double-bottom base with a potential 146.54 buy point, but it needs to show more strength.
Shares fell more than 2% before the open.
Microsoft Stock
Microsoft stock is trying bounce off its 21-day line but closed off 0.1% to 437.03 after Wednesday's 3.8% skid. MSFT stock now has a proper handle, with the cup-with-handle buy point of 456.16.
The Dow tech giant fell slightly early Friday.
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Tesla Stock
Tesla stock fell 0.9% to 436.17 on Thursday after tumbling 8.3% on Wednesday. Shares found support at the 10-day line. TSLA stock is well above its 21-day and 50-day lines.
Tesla fell 4% in overnight trade, after the Trump-Musk funding bill failed.
Tesla stock has surged since the election as investors see Trump favoring Musk and Tesla. If the two had a falling out, the implications for TSLA could be large.
Tesla influencers gushed over Full Self-Driving v13 following a limited release around Thanksgiving. But in the past few days, a wider FSD v13 rollout suggests no major step toward self-driving. Musk has said he expects unsupervised FSD by mid-2025, though he has forecast that "this year" or "next year" for nearly a decade.
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What To Do Now
Even at Thursday's highs, there was no reason to get excited. The failure to stage anything more than a token bounce is discouraging.
GE Vernova stock provided a buying opportunity, but market conditions aren't favorable.
If you feel compelled to make new buys, have a game plan for getting out quickly.
A safer course might be to pare exposure, especially if one is fully invested or nearly so. Going through your holdings and cutting damaged stocks and outright losers might serve that purpose.
Friday's PCE price index could be the catalyst for market moves, perhaps a de facto Day Three reaction to the Fed meeting and rate outlook. But it doesn't have to a positive reaction.
If the market does show renewed strength in the coming days, a number of stocks could quickly look promising. So keep your watchlists up to date.
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