Dow Jones futures fell slightly Friday morning, along with S&P 500 futures and Nasdaq futures.
The major indexes had a mixed session and closed near session highs, but the stock market rally suffered further damage. The Nasdaq tumbled below its 50-day line, joining the other key indexes. The Nasdaq and S&P 500 tested the lows of the Aug. 29 follow-through day. That test may continue Friday.
Apple was once again a big loser, with Apple stock and iPhone chipmakers skidding on China fears. Falling jobless claims also raised Fed rate hike fears. In addition to Apple, Nvidia continued to slide, but is holding key support.
Tesla is still trading within a narrow range, not far from an early entry. Meta Platforms continues to flirt with buy signals, along with Uber Technologies. Novo Nordisk did offer an entry Thursday.
RH, Smartsheet and DocuSign reported after the close.
Meta stock, Uber and Nvidia are on IBD Leaderboard. NVO stock and NVDA are on the IBD 50. NVDA stock and Meta are on the IBD Big Cap 20. Uber was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures edged lower and Nasdaq 100 futures declined 0.1%.
The 10-year Treasury yield was steady at 4.26%.
Crude oil edged higher, but copper prices sank 1%.
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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Earnings
RH stock tumbled in extended trade, signaling a gap below the 50-day line. The luxury home furnishings retailer beat views but gave cautious guidance. Shares fell 1.3% to 368.55 on Thursday, holding support at the 50-day line. RH stock has been forging a new base next to the top of a longer consolidation.
SMAR stock rose solidly overnight, suggesting a move above the 50-day and 200-day lines after the project planning software maker topped views. Smartsheet stock dipped 0.8% to 40.36 on Thursday.
DOCU stock climbed slightly early Friday after the e-signature software firm beat views and set upbeat guidance. DocuSign stock fell 1.2% to 52.13 on Thursday, between the 50-day and 200-day lines.
Stock Market Rally
The stock market rally opened solidly lower on Apple woes and falling jobless claims. But after the first hours, the major indexes pared losses to close near session highs.
The Dow Jones Industrial Average rose 0.3% in Thursday's stock market trading. The S&P 500 index fell 0.3%. The Nasdaq composite ceded 0.9%. The small-cap Russell 2000 retreated 1%.
U.S. crude oil prices fell 0.8% to $86.87 a barrel, snapping a nine-session win streak.
The 10-year Treasury yield dipped 3 basis points to 4.26%, after surging 20 basis points in the prior three sessions.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF declined 0.4%. The iShares Expanded Tech-Software Sector ETF dipped 0.2%. The VanEck Vectors Semiconductor ETF skidded 2.2%. Nvidia stock is the No. 1 SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF slipped 0.4% and ARK Genomics ETF slid 1.6%. TSLA stock is the top component across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 0.8% U.S. Global Jets ETF descended 1.5%. SPDR S&P Homebuilders ETF rose 0.3%. The Energy Select SPDR ETF dipped 0.1% and the Health Care Select Sector SPDR Fund climbed 0.5%.
The Industrial Select Sector SPDR Fund dipped 0.3%.
The Financial Select SPDR ETF fell 0.3%. The SPDR S&P Regional Banking ETF sank 1.35%.
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Apple Stock
Apple stock declined 2.9% to 177.56 on Thursday. While off intraday lows, the Dow Jones tech titan tumbled 3.6% on Wednesday to close below the 50-day line. Apple stock has a 198.23 buy point from a flat base.
Apple stock has tumbled as China looks to expand government bans of using iPhones at work to include state-owned companies. That also follows China's Huawei unveiling a 5G phone without banned U.S. chips. That suggests pressure on iPhone sales, while also a bad sign for wireless chipmakers such as Qualcomm and Qorvo.
Apple will unveil the iPhone 15 on Sept. 12.
Nvidia Stock
Nvidia stock fell 1.7% to 462.41 on Thursday after sliding 3.1% on Wednesday. The AI chip leader undercut its 21-day line, but found support at the 50-day line. Perhaps NVDA stock needs to consolidate for a time to set up again.
Tesla Stock
Tesla stock edged down 0.2% to 251.49, rebounding for a third straight session off the 21-day line. Shares have been trading between the 50-day and 21-day lines. TSLA stock has a 299.29 buy point, A strong move above the 50-day line would offer an early entry, perhaps using the Aug. 31 high of 261.18 as a specific trigger.
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Meta Stock
Meta stock rose intraday to a high of 307.05, and appeared to decisively clear the 50-day line after a couple weeks near that level, offering an early entry. But shares reversed quickly to as low as 292.22. Meta stock closed off 0.2% at 298.67
The action was reminiscent of Oracle swings on Aug. 23.
After Friday, META stock will have a new base with a 396.20 buy point.
Uber Stock
Uber stock rose 0.8% to 46.27, rebounding from its 50-day line and snapping a three-day losing streak. The ride-hailing and food-delivery app giant has a 49.49 buy point from a flat base, according to MarketSmith analysis. Investors also could view it as a shallow cup .
Investors could use Wednesday's intraday high of 46.85 as an early entry. Investors also could view the Sept. 1 high of 47.70 as a "handle."
Uber CEO Dara Khosrowshahi said Thursday that demand is steady with the ad business on track top targets. An UBER stock buyback is likely in the next two years, he added, as the ad business is on track to exceed targets.
Novo Nordisk Stock
Novo Nordisk stock climbed 2.2% to 195.38 in heavy volume, offering an entry as it cleared a one-month consolidation following a big gap-up on Aug. 8.
That gap-up came as the Danish drug giant said its weight-loss drug Wegovy significantly cut heart risks.
Market Rally Analysis
Thursday wasn't a terrible day by itself, with the indexes ending mixed, at session highs. But the cumulative losses, and where the indexes are vs. key levels, have taken a toll on the stock market rally.
The Nasdaq gapped below its 50-day line after just holding that key level. The S&P 500 retreated modestly after slipping below its 50-day on Wednesday.
The Nasdaq and S&P 500 fell intraday below the lows of their Aug. 29 follow-through day, but pared losses to close above those levels. A close below the FTD low would be highly bearish. In the vast majority of such cases, the market rallies ultimately fail.
The Dow Jones rose, but fell below its 50-day line on Tuesday, closing below its FTD on Wednesday.
The Russell 2000 is moving toward its 200-day line, along with the Invesco S&P 500 Equal Weight ETF. Both reflect the weak market breadth in recent days.
Energy has been showing strength, though many stocks are extended or nearly so.
A number of growth names are doing well.
Meta, Uber, Google parent Alphabet, MercadoLibre as well as software names such as Oracle, ServiceNow and HubSpot are acting relatively well.
Many other stocks aren't far from being actionable or at least in position.
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What To Do Now
Bulls aren't giving up. The major indexes and many top stocks rallied off intraday lows, with several leaders closing higher.
But the stock market rally is showing increasing strain. Yes, it wouldn't take much for the market rally to revive and buying opportunities flourish. But it also wouldn't take much for the uptrend to be seriously ailing.
Investors have to ready to adapt and react. That means staying engaged and having a plan. On the upside, you want to have your ready lists up to date. On the downside, how will you reduce exposure as individual holdings and possibly the overall market fall below key levels?
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