Dow Jones futures and S&P 500 futures rose modestly early Thursday, while Nasdaq futures climbed solidly, as Nvidia jumped on earnings, lifting chip stocks. Alibaba rallied before the open on its results.
The stock market rally had a mixed session on Wednesday, up and down following the 2 p.m. ET release of Fed minutes from the Jan. 31-Feb. 1 policy meeting. "Almost all" participants thought a quarter-point rate hike was appropriate on Feb. 1, but a "few" favored a half-point move, according to the Fed minutes.
The S&P 500 tested its 50-day line Wednesday. The market rally remains "under pressure."
Nvidia, Etsy, eBay, Dutch Bros, Tesla and EV-rival Lucid headlined earnings report late Wednesday.
Alibaba and Moderna released quarterly results before Thursday's open.
Dow Jones Futures Today
Dow Jones futures were 0.35% above fair value. S&P 500 futures rose 0.6%. Nasdaq 100 futures climbed 1.1%. Nvidia stock is giving a solid boost to S&P 500 and Nasdaq 100 futures, with Etsy and a variety of chip plays helping, including AMD stock.
Futures suggest the S&P 500 will bounce from its 50-day line at Thursday's open while the Nasdaq tests resistance at its 21-day line.
Meanwhile, the 10-year Treasury yield rose 3 basis points to 3.95%, back at 2023 highs.
Crude oil futures climbed 1%. Copper futures sank 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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Key Earnings
NVDA stock jumped 10% early Thursday as Nvidia earnings beat views and the chip giant guided slightly higher on Q1 revenue. Nvidia stock edged up 0.5% to 207.54 in Wednesday's regular session, just above its 21-day line. The chip giant now has a handle with a 230.59 buy point to a long consolidation. It already has a three-weeks-tight pattern with the same entry. But NVDA stock is extended from moving averages.
Advanced Micro Devices, an Nvidia rival in some markets, rose nearly 4%, with many chip-related names also rallying.
Etsy stock rose more than 3% in extended action as Etsy earnings were in line but revenue comfortably beat. The arts and crafts e-commerce firm had broken out in early February, right as the market rally peaked, but sold off hard. Etsy stock rose 2.9% to 128.45 on Wednesday, still below the 50-day line.
EBAY stock fell 5.5% as the e-commerce site's earnings and revenue just topped views. EBAY stock edged down 0.1% on Wednesday to 47.85, below the 21-day line. Shares have pulled back from nine-month highs but were in range from a 47.23 buy point from a bottoming base.
BROS stock tumbled 6.5% in extended trade as Dutch Bros earnings fell short though revenue topped. The coffee and energy drinks shop gave lukewarm 2023 guidance. Dutch Bros stock climbed 1.7% to 37.99 on Wednesday, back above the 21-day line. Above its 200-day and 50-day lines, BROS stock has a 41.54 buy point from a deep cup-with-handle bottoming base.
LCID stock sold off 15% as deliveries fell short and the EV maker disappointed with its 2023 production forecast. Lucid sees 2023 production of 10,000-14,000 vehicles up from last year's 7,180 but well below analysts consensus target of about 21,000. Shares of the luxury EV maker nudged 0.8% higher to 9.98 on Wednesday, trading between the 200-day and 50-day lines.
BABA stock rose 6% early Thursday after Alibaba earnings beat fiscal Q3 views. Shares edged down 0.3% to 94.78 on Wednesday. Alibaba stock tumbled Tuesday on reports that China's No. 2 e-commerce firm JD.com would begin a subsidy campaign to target fast-rising No. 3 Pinduoduo, the main arm of PDD Holdings.
MRNA stock fell modestly as Q4 EPS came up short. Shares had been up overnight as Moderna and Merck said that the FDA gave them breakthrough status for a personalized cancer vaccine for patients with high-risk melanoma. MRNA stock fell 1.2% to 158.17 on Wednesday, just above its 200-day line. Shares rose 3% overnight.
Stock Market Rally Wednesday
The stock market rally traded in a relatively narrow range Wednesday, following significant losses in the prior three sessions.
The Dow Jones Industrial Average fell 0.25% in Wednesday's stock market trading. The S&P 500 index dipped 0.15%. The Nasdaq composite edged up 0.1%. The small-cap Russell 2000 rose 0.3%.
U.S. crude oil prices slumped 3.2% to $73.95 a barrel, the sixth straight decline as demand fears mount. On the plus side, cooling crude and gasoline prices ease inflation concerns.
Copper prices dipped 0.8%.
The 10-year Treasury yield fell 3 basis points to 3.92%, pulling back from Tuesday's three-month high. The Fed minutes didn't substantially change the rate hike outlook, though the 10-year Treasury yield did come slightly off intraday lows.
Earlier, St. Louis Fed President James Bullard continued to sound hawkish, but the nonvoting member also didn't offer big surprises. He signaled he wants to see fed funds futures at 5.25%-5.5%, which is what markets have been pricing in. There is now a one-third chance of even more tightening by the July meeting.
Friday's PCE inflation report, the Fed's favorite inflation gauge, looms large.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF climbed 0.3%, while the Innovator IBD Breakout Opportunities ETF advanced 0.4%. The iShares Expanded Tech-Software Sector ETF popped 1%. The VanEck Vectors Semiconductor ETF sank 0.5%. Nvidia stock is a major SMH holding.
SPDR S&P Metals & Mining ETF inched up 0.2%. U.S. Global Jets ETF maintained altitude. SPDR S&P Homebuilders ETF stepped up 0.65%. The Energy Select SPDR ETF fell 0.6% and the Financial Select SPDR ETF dipped 0.1%. The Health Care Select Sector SPDR Fund declined 0.3%.
Reflecting more-speculative story stocks, ARK Innovation ETF rose 2.4% and ARK Genomics ETF 2.2%. Tesla stock is a major holding across Ark Invest's ETFs.
Tesla stock rose 1.8% to 200.86 on Wednesday. Shares appear to be forming a handle of some sort. A bottoming base without a prior uptrend, below the 200-day moving average is not ideal. However, if TSLA stock consolidated until Tesla's March 1 Investor Day event, a breakout then would likely involve clearing the 200-day.
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Market Rally Analysis
The stock market rally was up and down Wednesday. At one point, the major indexes looked like they might have a decent advance following the Fed minutes release, but they fell back to mixed.
The S&P 500 index touched its 50-day moving average, closing just above that key support level. The market rally is still an "uptrend under pressure" following Tuesday's sell-off.
The Nasdaq, S&P 500 and Russell 2000 are all trading below their late 2022 highs once again. The 21-day moving average also could act as resistance.
Leading stocks showed mixed action, with relatively modest moves outside of earnings.
The past several days reinforce how even leading stocks largely follow the overall market, for good or ill.
If the overall market rally can show even a little strength, a number of leading stocks will start flashing buy signals. If the market gains momentum, a slew of top stocks will race higher, with few failures.
On the flip slide, the S&P 500 and Nasdaq breaking lower would inflict widespread damage on far more charts.
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What To Do Now
The stock market rally is still at a key moment, fighting for support with several resistance levels to the upside. It's not a good time to be making new buys. Investors should be looking to reduce exposure.
Again, if the market rally improves modestly, a number of stocks will suddenly look actionable. So be prepared with your watchlists. But be ready to step out more aggressively if the market rally show further damage.
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