Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures.
The stock market rally had a rough session amid several headwinds, though the major indexes came off Tuesday's lows. Treasury yields hit 2024 highs. UnitedHealth and other health insurers fell on Medicare rates, apparel plays slumped on PVH Corp. guidance.
Tesla tumbled Tuesday on stunningly weak deliveries that a long-term bull called an "unmitigated disaster." Shares kept falling Wednesday.
Energy stocks were strong with crude oil prices continuing to rise, but most are significantly extended.
Nvidia, the AI and overall market rally leader, fell Tuesday, but bounced off short-term support. NVDA stock is starting to work on a new base.
Meta Platforms, Uber Technologies, Eli Lilly, Salesforce.com showed resilience, finding support around their 50-day or 10-week lines. Microsoft bounced near key levels and a recent buy point.
Late Tuesday, Intel disclosed a $7 billion operating loss in 2023 for its chip foundry business on sales of $18.9 billion. The Dow giant expects foundry losses to peak in 2024 and not break even until "midway" between now and the end of 2030. Intel stock fell solidly.
Nvidia, Meta Platforms and Uber stock are on IBD Leaderboard. Meta stock is on SwingTrader. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia, Meta Platforms and Salesforce stock are on the IBD 50 list. Nvidia, Uber and META stock are on the IBD Big Cap 20.
The video embedded in the article highlighted Tuesday's market action and analyzed Meta Platforms, Uber and Eli Lilly stock.
Dow Jones Futures Today
Dow Jones futures edged up vs. fair value, even with Intel acting as a drag. S&P 500 futures tilted higher and Nasdaq 100 futures lost a fraction.
The 10-year Treasury yield edged up to 4.37%.
Crude oil futures rose 1%, hitting $86 a barrel.
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 continued to slide with Treasury yields the main culprit. Health insurers, especially Humana, CVS Health and Dow Jones giant UnitedHealth, sold off on lower-than-expected Medicare Advantage rates for 2025. A number of apparel makers and retailers retreated as PVH stock crashed 22% on weak 2024 guidance. Tesla stock was a megacap loser as well.
The Dow Jones Industrial Average fell 1% in Tuesday's stock market trading, closing just below its 21-day moving average. The S&P 500 index sank 0.7%, never touching its 21-day. The Nasdaq composite gave up 0.95%, undercutting its 21-day for much of the session but finishing above that short-term level.
The small-cap Russell 2000 sold off 1.8%, tumbling below its 21-day line and closing near session lows.
The 10-year Treasury yield rose 3 basis points to 4.36%, hitting 4.405% intraday. That's after soaring 14 basis points on Monday. Now at 2024 highs, the yield is a headwind for stocks after being a huge tailwind in late 2023.
The Nasdaq is just 1.9% above its 50-day line, the smallest gap since early November. At some point the Nasdaq will test its 50-day or 10-week lines. That could let a lot of stocks forge buying opportunities, while providing room to run with the next leg up. But there's always the chance that the indexes will suffer a more significant correction.
U.S. crude oil prices rose 1.7% to $85.15 a barrel, hitting the highest levels since late October.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF declined 1%, with Microsoft and Salesforce as key IGV components. The VanEck Vectors Semiconductor ETF 1.3%. Nvidia stock is the largest SMH holding by far.
Reflecting more-speculative story stocks, ARK Innovation ETF tumbled 3% and ARK Genomics ETF 4.4%. Tesla stock remains a major holding across Ark Invest's ETFs, with Cathie Wood bulking up on TSLA in recent weeks as shares have fallen.
SPDR S&P Metals & Mining ETF edged higher and the Global X U.S. Infrastructure Development ETF declined 0.8%. U.S. Global Jets ETF descended 2.4%. SPDR S&P Homebuilders ETF gave up 2.1%. The Energy Select SPDR ETF rose 1.4%.
The Health Care Select Sector SPDR Fund sank 1.6%, LLY stock is the No. 1 holding in XLV, with UnitedHealth No. 2.
The Industrial Select Sector SPDR Fund and the Financial Select SPDR ETF dipped 0.5%.
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Stock Near Buy Points
Meta stock rose 1.2% to 497.37, back above the 21-day moving average, after again finding 10-week line support. A strong move off the 10-week line, perhaps topping the 500 level would offer an entry. Meta could be in the process of forging its first base of 2024.
Uber stock edged up 0.8% to 76.98, reversing higher from the 50-day and 10-week lines. A de facto flat base, which will is set to be official after this week, offers an 82.14 buy point. A decisive move above the 21-day line could offer an early entry.
Eli Lilly stock inched 0.45% higher on Tuesday to 763.96, just below the 21-day and just above the 10-week line. LLY stock has an 800.78 buy point from a de facto flat base that is due to be a proper flat base on Friday.
Salesforce stock gained 0.6% to 304, bouncing intraday off its 50-day and 10-week lines. On track for a flat base after Friday with a 318.71 buy point, CRM stock has a downward-sloping trendline for an early entry.
Microsoft stock fell 0.7% to 421.44, but bounced off the 21-day line and held a420.82 buy point
Nvidia Stock
Nvidia stock declined 1% to 894.52, but closed well off lows. Shares touched their 21-day line for the first time since Feb. 21, just before earnings, but bounced off that key level. NVDA stock is a few weeks into a possible base, but needs more time.
Nvidia stock's performance obviously is crucial to the market rally but especially for AI chip and hardware stocks.
Tesla Stock
Tesla announced Tuesday that it delivered 386,810 in the first quarter, far below even the most-bearish estimates. That was down 20.2% from Q4's record 484,507 and 8.5% below a year earlier.
The EV giant produced 433,371 vehicles, swelling inventory, even with a number of plant shutdowns and slowdowns during the quarter.
Wedbush analyst Dan Ives, a die-hard Tesla bull, said Q1 deliveries were an "unmitigated disaster" and a possible "turning point" if Elon Musk didn't right the ship quickly.
Tesla stock tumbled 4.9% to 166.63, back near 2024 lows. TSLA stock has plunged 32.9% this year, making it the worst performer on the S&P 500 index.
Shares fell 1% early Wednesday.
Analysts are starting to cut Q1 and 2024 earnings estimates further, continuing steady reductions all year. Tesla earnings for Q1 are due April 23.
Rivian Automotive reported Q1 deliveries of 13,588 premium EVs, above views for 13,000. Shares still sank 5.2% on Tuesday, down 55.1% in 2024.
What To Do Now
So far, the market rally and most leading stocks are acting normally. Losses are never fun, but this could create a number of buying opportunities from stocks pulling back to key support or forging bases, such as Meta Platforms, Uber and, perhaps soon, Nvidia.
But it's not a good time to be buying, unless you are very nimble and quick to exit.
Investors should be looking at their portfolios. If you're heavily exposed, you might want to take some profits to protect your portfolio. Don't let losing stocks become big losers.
But definitely work on your watchlists to look for stocks showing relative strength and holding key levels. Just because a stock looks resilient right now doesn't mean that will continue. So wait for stocks to trigger buy signals and for the market to show a little more strength.
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