Dow Jones futures fell slightly early Thursday, along with S&P 500 futures and Nasdaq futures, with Adobe plunging and Treasury yields continuing to rise.
The stock market rally marched higher Wednesday, with the Nasdaq clearing the 20,000 level for the first time and the S&P 500 almost at all-time levels. Credit the megacaps.
Tesla hit a record high, breaking out of a three-year consolidation. Alphabet kept surging on more good news, now also at all-time levels. Amazon.com, Meta Platforms and Apple also hit new highs intraday.
Nvidia had a solid session, coming up to key levels. Microsoft is working up the right side of its base.
After the close, Adobe reported better-than-expected earnings for its fiscal fourth quarter, but gave disappointing guidance. ADBE stock plunged more than 10% early Thursday.
Broadcom earnings are due Thursday night.
Nvidia, Google and Meta stock are on IBD Leaderboard, with Tesla on the Leaderboard watchlist. Google stock and Meta also are on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Nvidia stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures lost 0.1% vs. fair value. S&P 500 futures declined 0.2%. Nasdaq 100 futures retreated 0.4%. Adobe is an S&P 500 and Nasdaq big cap.
The 10-year Treasury yield rose to 4.3%, now clearly breaking a recent downtrend from a mid-November peak.
At 8:30 a.m. ET, the Labor Department will release the November producer price index, a day after a largely in-line CPI report.
China signaled further stimulus measures including a higher budget deficit as well as further rate cuts in 2025.
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 had a generally strong session, with the Nasdaq and especially megacaps leading the way. The November consumer price index, released before the open, showed inflation sticky but as expected, with a few hopeful signs in the details.
The Dow Jones Industrial Average fell 0.2% in Wednesday's stock market trading. The S&P 500 index climbed 0.8%, just shy of highs. The Nasdaq composite leaped 1.8%. The small-cap Russell 2000 gained 0.5%, rebounding from the 21-day moving average.
All the Magnificent Seven stocks rose Wednesday except for Apple. Most outpaced the Nasdaq.
The Nasdaq is now 6.5% above its 50-day moving average, somewhat extended. The index can certainly become more extended, often peaking in 2024 when it's 8%-9% above the 50-day. Still, the odds of a pullback would then rise significantly, with a higher risk that any such pullback would be significant.
Sentiment remains high, with more than 60% of investment newsletter writers bullish for a fifth straight week.
However, superhot growth stocks have cooled somewhat, suggesting a little less investor froth. Many rose on Wednesday, such as Palantir Technologies and AppLovin, but only regaining a portion of their recent pullbacks.
Outside the megacaps, market gains were more modest. The Invesco S&P 500 Equal Weight ETF edged up 0.1%, hitting resistance at the 21-day line. The First Trust Nasdaq 100 Equal Weighted Index ETF gained 0.9%, but only half the QQQ's 1.8%.
U.S. crude oil prices popped 2.5% to $70.29 a barrel.
The 10-year Treasury yield rose five basis points to 4.27%, up 12 basis points this week after hitting a short-term low on Friday.
Bitcoin surged 5.1% to $101,432.84, another "risk on" sign.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rebounded 2%. The iShares Expanded Tech-Software Sector ETF climbed 1.55%, with Microsoft stock and Adobe key members. The VanEck Vectors Semiconductor ETF popped 2.45%. Nvidia stock is the dominant SMH member, with a Broadcom a notable holding.
Reflecting more-speculative story stocks, ARK Innovation ETF gained 2% while ARK Genomics ETF sank 1.5%. Tesla stock is a major weight across Ark Invest's ETFs. Cathie Wood also built up a big Nvidia stake.
SPDR S&P Metals & Mining ETF rose a fraction. The SPDR S&P Homebuilders ETF and Industrial Select Sector SPDR Fund fell 0.2%. The Energy Select SPDR ETF and Financial Select SPDR ETF climbed 0.2%.
The Health Care Select Sector SPDR Fund slumped 1.4%.
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Megacap Stocks
Tesla stock jumped 5.9% to 424.77, clearing the November 2021 all-time high of 414.50. Investors could view the move out of the three-year consolidation as a buy signal, but shares are significantly extended from moving averages. A pause around current levels might create a lower-risk entry.
Google stock leaped 5.5% to 195.40 to a new peak. On Tuesday, shares gapped up 5.6%, clearing a 182.49 cup-with-handle buy point, on a new quantum-computing chip. Wednesday's move came as Google unveiled its latest AI tool, Gemini 2.0.
Amazon stock climbed 2.3% to 230.26, hitting yet another high and increasingly extended.
Meta stock gained 2.2% to 632.68, now extended from a 602.95 flat-base buy point.
Nvidia stock rose 3.1% to 139.313, just above the 50-day line but below the 21-day A 140.76 buy point is still actionable, though investors might want to see more strength, reaching various levels between 143-150.
Microsoft stock advanced 1.3% to 448.99. Shares are still actionable from the 50-day line and from a short-term high of 441.85. MSFT stock is moving toward a 468.35 consolidation buy point.
Apple stock dipped 0.5% to 246.49, reversing from a fresh high of 250.80. Shares are within range of a 237.49 flat-base buy point, according to MarketSurge analysis. Apple reportedly has tasked Broadcom to help on an in-house AI server chip.
(Broadcom stock jumped 6.6% on Thursday, clearing an early entry and nearing an official buy point. But, Broadcom earnings are due Thursday night, with big implications for Nvidia and the chip sector.)
What To Do Now
The stock market rally continues to power higher. A few stocks, such as Google, have flashed buy signals this week, but standing pat with heavy exposure has paid off well.
Keep an eye on the Nasdaq and bullish sentiment. Those are sending yellow warning flags, but not red. So no need to wave a white flag.
Work on watchlists and have a game plan for adding exposure and scaling back.
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.
