Dow Jones futures rose early Thursday, along with S&P 500 futures and especially Nasdaq futures rose as Nvidia jumped on earnings.
The stock market rally retreated slightly heading into Nvidia's results, in part due to somewhat-hawkish Fed minutes from the April 30-May 1 policy meeting. Many consumer and commodity names sold off as well.
Nvidia reported earnings that comfortably beat quarterly views, guided higher and announced a 10-for-1 stock split. Shares rose sharply .
The long-awaited Nvidia report has huge implications for AI plays such as Broadcom, Advanced Micro Devices, Taiwan Semiconductor and Microsoft. Those stocks rose slightly in initial after-hours trading.
Meanwhile, Synopsys, Snowflake and ELF Beauty also reported Wednesday night.
Nvidia and Eli Lilly stock are on IBD Leaderboard. Booking stock is on SwingTrader. Microsoft stock and Synopsys are on IBD Long-Term Leaders. Nvidia stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures were 0.2% above fair value. S&P 500 futures rose 0.7%. Nasdaq 100 futures jumped 1.1%. Nvidia stock is a big S&P 500 and Nasdaq 100 component.
The 10-year Treasury yield edged down to 4.42%.
Crude oil futures rose slightly.
Copper, which tumbled Wednesday, fell slightly.
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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Nvidia Earnings
Nvidia earnings skyrocketed 461% with revenue soaring 262%, the fourth straight quarter of triple-digit growth for both.
The AI chip leader guided higher on Q2 revenue, though not by the same margin as before.
"The next industrial revolution has begun," Nvidia CEO and founder Jensen Huang said in the earnings release.
Nvidia will split its stock 10-for-1. It also hiked its dividend 150% to 10 cents a share, or 1 cent post split.
Nvidia stock rose 7% in premarket trading, signaling a move above 1,000 for the first time. Shares gained steam as executives talked up growth prospects and the company's latest AI chip and projects on the conference call. Shares dipped 0.5% in Wednesday's regular session to 949.50. NVDA stock cleared a 922.20 cup-with-handle buy point last week.
Broadcom, AMD and Taiwan Semiconductor rose roughly 2-3% overnight.
Super Micro Computer and Dell Computer, which both use Nvidia chips in their AI servers, rose 5%-6% in premarket trade.
Microsoft and ServiceNow, two big software AI players, climbed about 1%. Both are around buy points.
Other Earnings
Synopsys earnings fell short while the electronics design software maker gave mostly weak guidance. SNPS stock edged lower in extended action. Shares edged up 0.3% to 573.13 Wednesday. Synopsys stock has a 582.97 handle buy point.
Snowflake earnings missed but revenue solidly beat while the data analytics software firm also gave strong guidance. SNOW stock rose solidly overnight, but off initial gains. Shares advanced 0.4% to 163.34 on Wednesday. Snowflake stock is still far off 52-week highs set in February.
ELF Beauty earnings easily beat once again but the cosmetics maker guided lower after raising targets consistently for several quarters. ELF stock rose solidly early Thursday after initially plunging more than 10% Wednesday night. Shares of the low-priced cosmetics makers fell 2.1% on Wednesday, between the 50-day and 200-day lines.
Stock Market Rally
The stock market rally saw modest losses on the major indexes with a number of leaders taking harder hits.
The Dow Jones Industrial Average fell 0.7% in Wednesday's stock market trading. The S&P 500 index slipped 0.3%. The Nasdaq composite declined 0.2%, reversing from a fresh intraday all-time high. The small-cap Russell 2000 lost 0.8%.
Consumer stocks struggled Wednesday. Target sold off on weak earnings and guidance, but Urban Outfitters, Williams-Sonoma and luxury homebuilder Toll Brothers reversed sharply lower despite seemingly solid results.
Energy and commodity stocks retreated. Copper prices sold off 4.9%, their biggest loss in nearly two years, following a big run. U.S. crude oil futures fell 1.4% to $77.57 a barrel, down 3.1% so far this week.
The 10-year Treasury yield rose 2 basis points to 4.43%.
Fed minutes from the April 30-May 1 meeting released Wednesday showed policymakers worried about a lack of progress on bringing inflation down. However, since May 1 fresh inflation and economic data have pointed to cooling inflation again. Fed Gov. Christopher Waller, a policy hawk, noted improvement on Tuesday.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF was essentially flat, with Microsoft and ServiceNow big components. The VanEck Vectors Semiconductor ETF rose 0.8%. Nvidia stock is the No. 1 holding in SMH, with Broadcom, AMD and TSM stock big members as well. SNPS stock is in both SMH and IGV.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 0.5% and ARK Genomics ETF climbed 1%.
SPDR S&P Metals & Mining ETF slumped 2.4%. SPDR S&P Homebuilders ETF declined 2.3%. The Energy Select SPDR ETF stepped down 1.85% and the Health Care Select Sector SPDR Fund rose 0.2%.
The Industrial Select Sector SPDR Fund edged up 0.1%. The Financial Select SPDR ETF declined 0.6%.
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What To Do Now
Nvidia earnings are finally out. Are you ready?
Futures suggest a positive market reaction to Nvidia results. If that carries over to Thursday's regular session, investors could see a number of buying opportunities.
But a downside reversal could trigger heavy selling. With consumer, commodity and some infrastructure plays taking hits recently, the market rally could ill-afford to see weakness in AI.
So investors need to be prepared. Have your watchlists ready, with special attention to your prime targets. But have your exit strategies in place as well.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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