Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures. Target, and PDD Holdings were big earnings movers before the open, with investors looking ahead to Nvidia after the close.
The stock market rally was quiet Tuesday, with the major indexes nudging higher and the Nasdaq setting a record high heading into Nvidia's Wednesday night report. The tech titan's earnings and guidance will have a huge impact on AI stocks and possibly the overall market.
However, Eli Lilly broke out on drug trial data. Microsoft flashed a buy signal, along with Nu Holdings, Lam Research and Booking Holdings.
Target and Modine Manufacturing were overnight earnings losers.
But e-commerce giant PDD Holdings, Analog Devices, Urban Outfitters, TJX Cos.,Williams-Sonoma rose on results.
Toll Brothers was little changed.
Nvidia and Eli Lilly stock are on IBD Leaderboard. Booking stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Nvidia stock is on the IBD 50. Eli Lilly was Tuesday's IBD Stock Of The Day.
The video embedded in this article reviews Tuesday's market action and analyzed LLY stock, Microsoft and Ares Management.
Dow Jones Futures Today
Dow Jones futures were 0.2% below fair value. S&P 500 futures declined 0.15% and Nasdaq 100 futures were flat.
The 10-year Treasury yield rose a few basis points to 4.45%.
Crude oil futures fell 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally had a quiet session, but the major indexes edged higher, with the S&P 500 and Nasdaq setting record closes.
The Dow Jones Industrial Average edged up 0.2% in Wednesday's stock market trading. The S&P 500 index climbed 0.25%. The Nasdaq composite rose 0.2%. The small-cap Russell 2000 fell 0.2%, pausing slightly below two-year highs.
Leading stocks continued to do well.
U.S. crude oil prices fell 0.7% to $79.26 a barrel.
The 10-year Treasury yield fell just over two basis points to 4.41%, backing off the 50-day line after rising for three sessions.
Fed Gov. Christopher Waller, speaking just before Tuesday's market open, said he wants to see several months of cooling inflation before cutting rates. But Waller, a policy hawk, says inflation is starting to go in the right direction again.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF fell 0.8%, with Microsoft stock a major holding. The VanEck Vectors Semiconductor ETF edged down 0.1%. Nvidia stock is the No. 1 holding in SMH. LRCX stock and Analog Devices also are in the ETF.
Reflecting more-speculative story stocks, ARK Innovation ETF gave up 0.9% and ARK Genomics ETF declined 1.7%.
SPDR S&P Metals & Mining ETF added 0.35%. The SPDR S&P Homebuilders ETF edged down 0.1%. WSM stock is the No. 1 holding in XHB, with Toll Brothers a significant member as well. The Energy Select SPDR ETF shed 0.5%.
The Health Care Select Sector SPDR Fund climbed 0.2%, with LLY stock a key holding. The Industrial Select Sector SPDR Fund fell 0.3% and the Financial Select SPDR ETF rose 0.6%.
Five Best Chinese Stocks To Watch Now
Stocks In Buy Zones
Eli Lilly stock rose 2.55% to 803.17 on Tuesday, clearing a 795.50 handle buy point from a shallow double-bottom base. Lilly reported positive late-stage data for a Crohn's disease treatment.
Microsoft stock rose 0.9% to 429.04 after briefly topping a 430.18 flat-base buy point intraday. Earlier Tuesday, shares cleared a trendline, offering a slightly lower entry. The relative strength line has been lagging slightly since November, reflecting MSFT stock's underperformance vs. the S&P 500 index. On Tuesday, CEO Satya Nadella discussed Microsoft's latest AI tools during his keynote address at Microsoft's Build conference.
Nu Holdings stock gained 3% to 12.02, bouncing off the 50-day line. That could offer an early entry into the Brazilian fintech. NU stock broke out past a still-valid 12.11 cup-with-handle buy point on May 15 following earnings, but then fell back.
Lam Research stock rose 2.3% to 964, clearing a short-term high while bouncing from near the 50-day line. That offered an early entry. LRCX stock has a 1,007.39 flat-base buy point. On Tuesday, the chip-equipment maker announced a $10 billion buyback and a 10-for-1 stock split.
Booking stock climbed 1.4% to 3,822.34, breaking out past a handle in an awkward double-bottom base. The official buy point is 3,811.57.
Key Earnings
Target earnings missed views with guidance light, with the retail giant pointing to weaker consumers. TGT stock tumbled early Wednesday. Shares nudged 0.6% lower to 155.78 on Tuesday, undercutting the low of a flat base.
PDD easily beat Q1 views. Shares rose solidly in premarket trade, signaling a move out of a buy zone to a three-year best. The stock fell 0.9% on Tuesday to 145.45, holding in range of a cup-with-handle base buy point, according to MarketSurge. PDD is parent of Chinese e-commerce giant Pinduoduo and international site Temu.
Urban Outfitters earnings easily beat. URBN stock rose modestly in premarket trade, off overnight highs but signaling a possible buy signal. Shares edged down 0.3% to 41.32 on Tuesday, just above the 50-day line. Urban Outfitters stock has a 47.29 consolidation buy point. A move above the May 13 high of 42.52 would be an early entry.
Modine earnings topped fiscal Q4 views but revenue just missed while fiscal 2025 guidance was light. MOD stock dived early Wednesday. Shares dipped 0.9% to 101.47 on Tuesday, but rebounded from early lows of 97.36, briefly testing a 97.91 cup-with-handle buy point. The industrial cooling company has become more of an AI play via its exposure to data centers.
Toll Brothers earnings exceeded forecasts. TOL stock was little changed in premarket action. Shares slipped 0.6% to 130.22 on Tuesday, holding above a 128.75 cup-with-handle base buy point.
Analog Devices earnings slightly beat, with the chipmaker also guiding up on the current fiscal Q3. ADI stock rose solidly before the open, already extended from a prior consolidation.
Williams-Sonoma earnings easily beat while sales also topped, sending WSM stock gapping above a 319.78 flat-base buy point.
TJX earnings topped while sales were in line. Shares rose modestly before the open, just below 100. TJX stock is are working on a 102.04 buy point from a double-bottom base. Investors could use Monday's high of 100.38 as a slightly early entry.
Time The Market With IBD's ETF Market Strategy
Nvidia Earnings
Nvidia earnings are due Wednesday night. Analysts expected blowout earnings and sales growth, with investors also likely betting on another big guidance hike. Will the AI chip leader satisfy lofty expectations above and beyond official consensus?
NVDA stock climbed 0.6% to 953.86 on Tuesday, a record close and still in range of a 922.20 cup-with-handle buy point.
Nvidia earnings will be sure to affect AI chip stocks like Broadcom as well as AI plays like Microsoft and even Modine Manufacturing.
What To Do Now
The market rally is acting well, especially leading stocks. A large number of stocks from a variety of sectors have flashed buy signals and generally are working. Many are still actionable while others are setting up.
So it's been a good time to build up substantial exposure. Investors should be cautious heading into Nvidia earnings, especially with tech and AI-related names.
But investors should be working on their post-Nvidia plans. Have your watchlists up to date. But also have your exit strategies ready if the market has a negative reaction to Nvidia earnings.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
