Dow Jones futures rose slightly early Thursday, along with S&P 500 futures and Nasdaq futures.
The stock market rally staged a dramatic bullish turnaround Wednesday. The major indexes recovered from sharp early losses, with the Nasdaq jumping and the S&P 500 retaking key levels.
Nvidia rallied for a third straight session, surging in heavy volume as CEO Jensen Huang touted "incredible" demand for its AI chips. Tesla eked out a small gain after rebounding from solid morning losses.
Meanwhile, AppLovin, ServiceNow, Spotify, Eli Lilly, Freshpet and On Holding all flashed buy signals Wednesday.
Nvidia and Freshpet stock are on IBD Leaderboard. Eli Lilly and On Holding stock are on SwingTrader. Nvidia, On Holding, Eli Lilly and ServiceNow stock are on the IBD 50. Eli Lilly stock is on the IBD Big Cap 20. On Holding was Wednesday's IBD Stock Of The Day.
The video embedded in the article analyzes Wednesday's bullish action and reviews AppLovin stock, On Holding and Doordash.
Dow Jones Futures Today
Dow Jones futures climbed 0.15% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures rose 0.2%.
The 10-year Treasury yield edged up to 3.67%.
Crude oil futures climbed more than 1%.
At 8:15 a.m. ET, the European Central Bank is expected to cut interest rates by a quarter point, following a similar move in June.
At 8:30 a.m., the Labor Department will release the August producer price index and weekly jobless claims.
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 sold off at the open, in the wake of Tuesday's presidential debate, Wednesday's CPI inflation report and continued concerns for lenders and consumer spending. But the major indexes, all down more than 1% intraday, rebounded from midmorning lows. Nvidia led the Nasdaq higher.
The Dow Jones Industrial Average advanced 0.3% in Wednesday's stock market trading after tumbling to undercut its 50-day line intraday. The S&P 500 index ran up 1.1%, reclaiming the 50-day and 21-day lines after what appeared to be a serious rejection near those levels. The Nasdaq composite jumped 2.2%, back above the 21-day line after falling 1.4% intraday. The small-cap Russell 2000 rose 0.3% after tumbling toward its 200-day line intraday.
The Invesco S&P 500 Equal Weight ETF rose a fraction, holding the 21-day line after briefly undercutting its 50-day line in morning trade.
Wednesday's whipsaw action underscores how important the overall market is to individual stocks. Some leading stocks fell solidly Wednesday morning then rebounded.
The Nasdaq, now up 4.2% so far this week, is still an inside week. The tech-heavy composite is still below its 50-day, but it's definitely closing the gap.
U.S. crude oil prices 2.37% to $67.31 a barrel
The 10-year Treasury yield rose one basis point to 3.65% after hitting a fresh 52-week low intraday of 3.61%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF gained 1.1%. ServiceNow stock is a big IGV holding while AppLovin also is in the ETF. The VanEck Vectors Semiconductor ETF soared 5.2%. Nvidia stock is the No. one holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF rallied 2.2% and ARK Genomics ETF 1.8%. Tesla stock is a major holding across Ark Invest's ETFs. Cathie Wood also has taken a big position in NVDA stock in recent months.
SPDR S&P Metals & Mining ETF leapt 1.95%. The SPDR S&P Homebuilders ETF edged up 0.2%. The Energy Select SPDR ETF slumped 0.9% and the Health Care Select Sector SPDR Fund fell 0.3% amid some big post-debate moves up and down for many medical stocks. Eli Lilly stock is a major XLV holding.
The Industrial Select Sector SPDR Fund climbed 0.2%. The Financial Select SPDR ETF retreated 0.5%.
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Stocks Near Buy Points
AppLovin skyrocketed 13.15% to 97.57, vaulting from the 21-day line to back above a 91.91 buy point. It's now slightly extended from the official entry, though still in range of a high-handle alternate buy point of 93.70.
The relative strength line, which tracks a stock's performance vs. the S&P 500 index, is at a 52-week high. Early Tuesday, Bank of America raised its APP stock price target to 120.
ServiceNow stock climbed 1.75% to 875.17, reversing higher after undercutting the flat-base buy point of 850.33 intraday.
Spotify stock rose 2.9% to 336.60, rebounding from the 50-day line to retake a prior 331.08 flat-base buy point and clear the 21-day line. After this week, SPOT stock will have a new base with a 359.38 entry.
Eli Lilly stock climbed 2% to 919.54, bouncing off its 50-day line and closing just over its 21-day. That offers an early entry. Investors could treat the Aug. 2 high of 972.53 as a high handle to a V-shaped consolidation.
Freshpet stock advanced 1.8% to 137.62, back above a 136.35 buy point, after undercutting its 21-day line intraday Tuesday.
On Holding stock popped 2.6% to 46.43 after skidding to 43.38 intraday. Shares closed above a 21-day line as well as a 44.30 consolidation buy point.
Tesla Stock
Tesla stock rose 0.9% to 228.21, holding its 50-day line. The EV giant fell to 216.80 intraday, but found support at the 21-day moving average. Shares jumped 4.6% on Tuesday.
TSLA stock has a 271 consolidation buy point, though investors could use the Sept. 5 high of 235 as an aggressive entry.
Tesla has a busy October ahead, with third-quarter deliveries (likely on Oct. 2), the robotaxi event on Oct. 10, and Q3 earnings on Oct. 16.
Nvidia Stock
Nvidia stock soared 8.1% to 116.86, back above its 21-day moving average. The AI chip leader is on the cusp of its 50-day line, closing fractionally above its 10-week. Santa Clara, Calif.-based Nvidia enjoyed its first heavy-volume gain in over a month.
CEO Jensen Huang, speaking Wednesday at Goldman Sachs' Communacopia + Technology Conference, said Nvidia is seeing "incredible" demand and "everything is sold out."
NVDA stock is now up 13.6% for the week. But that's after diving 13.9% in the prior week, and 7.7% in the week before that.
Nvidia stock has a 131.26 buy point from an ungainly handle.
Shares edged higher early Thursday, signaling a possible test of the 50-day line.
The U.S. government is close to letting Nvidia export its AI chips to Saudi Arabia, Semafor reported, citing sources at the Saudi AI summit, Gain.
As the most important company and stock of the past two years, it's hard to overstate Nvidia's importance to the market.
Meanwhile, Nvidia chipmaker Taiwan Semiconductor and Broadcom regained their 50-day lines.
What To Do Now
Wednesday's action was encouraging, especially given the negative action to start. A number of stocks flashed buy signals Wednesday and many more are setting up.
The S&P 500 is clearly above its 50-day line, but not decisively so. The Nasdaq still has to reach that key level.
You can choose to take some pilot positions, but keep overall exposure low and be ready to exit quickly.
There's nothing wrong with waiting for real confirmation that the market uptrend is back on track. But don't get stuck in a bearish — or bullish — mindset. As the market changes, you need to adapt.
Whether aggressive or patient, investors should keep a close eye on stocks setting up.
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.
