Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures.
The stock market rally shrugged off a hotter-than-expected core CPI inflation reading on Tuesday, with Oracle gapping up on earnings and Nvidia bouncing. Big-cap techs led the S&P 500 to an all-time closing high, but market breadth was weak.
ServiceNow, Shockwave Medical, Archrock, Symbotic and Microsoft flashed buy signals Tuesday, at least intraday.
Investors had an opportunity Tuesday to make some incremental buys, but that window may quickly close once again.
Early Wednesday, Dollar Tree tumbled on weak results.
Tesla fell as Wells Fargo downgraded the EV giant to the equivalent of a sell rating slashing its price target.
Nvidia stock and ServiceNow are on IBD Leaderboard. ServiceNow stock is on SwingTrader. MSFT stock is on IBD Long-Term Leaders. Nvidia, Symbotic and Shockwave stock are on the IBD 50. Archrock was Tuesday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures were little changed and Nasdaq 100 futures lost 0.1%.
The 10-year Treasury yield rose to 4.18%. Crude oil futures rose more than 1%.
Bitcoin rallied back above $73,000, hitting a fresh all-time high.
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 strong session despite generally high CPI data, perhaps because some details hint at a tamer reading for the Fed's favorite inflation gauge, the core PCE price index. Nvidia and Oracle stock led a rebound in big techs, along with ServiceNow, Microsoft and Meta Platforms.
The Dow Jones Industrial Average climbed 0.6% in Tuesday's stock market trading, rising from the 21-day and 10-week moving averages and reclaiming the 39,000 level. The S&P 500 index gained 1.1, off the 10-day line to set a new closing high. The Nasdaq composite jumped 1.5%, rebounding from near the 21-day line and almost setting a closing high
Despite the solid-to-strong gains in the major indexes, decliners narrowly topped advancers.
The small-cap Russell 2000 fell a fraction, a third straight decline, though off session lows.
The Invesco S&P 500 Equal Weight ETF climbed 0.3%, well below the S&P 500's pace but also setting a record close. The First Trust Nasdaq 100 Equal Weighted Index ETF rose a solid 0.8%, but lagged the Nasdaq 100's 1.5% leap. On the other hand, RSP and QQEW held up a little better in the prior two sessions.
Nvidia and many AI chip names have been leading the rally, but are significantly or greatly extended.
Some big-cap software names, including AI plays such as ServiceNow and Microsoft, have been consolidating for some time. Oracle, which gapped up to a buy point, gave the sector a lift with its earnings and bullish comments. Medical products names, including Shockwave stock and Dexcom, are looking interesting. So are a number of energy services firms like Archrock stock. Banks and payment stocks also are doing well.
The Nasdaq and S&P 500 aren't extended, but after one strong day are once again close to being so. That's a downside of the market refusing to have a substantial pause or pullback.
U.S. crude oil prices fell 0.5% to $77.56 a barrel.
The 10-year Treasury yield rose 5 basis points to 4.15%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF rebounded 2.2%. Microsoft is a major IGV holding, along with Oracle and ServiceNow. The VanEck Vectors Semiconductor ETF rallied 3.2%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 0.8% and ARK Genomics ETF slumped 1.6%. Tesla stock is a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF retreated 1.7% and the Global X U.S. Infrastructure Development ETF rose 0.6%. U.S. Global Jets ETF descended 2.15%. SPDR S&P Homebuilders ETF climbed 1.4%. The Energy Select SPDR ETF dipped 0.2% and the Health Care Select Sector SPDR Fund advanced 0.5%.
The Industrial Select Sector SPDR Fund edged up 0.4%.
The Financial Select SPDR ETF gained 0.4%, almost back to early 2022's all-time highs. The SPDR S&P Regional Banking ETF fell 1%.
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Stocks In Buy Zones
ServiceNow stock popped 4.3% to 789.56, rebounding from around the 50-day line, back above the 21-day line and breaking a downtrend. That offers an early entry in an emerging flat base that is set to be valid after this week.
Shockwave stock rose 2.7% to 264.70, breaking the trendline of a short consolidation, a day after rebounding from the 21-day line. That offers an early entry. Investors also could use 270.96 as the official entry for the recent action, which includes a three-weeks-tight pattern. Investors could view the recent action as a handle to a long, deep SWAV stock consolidation.
Symbotic stock climbed 3.15% to 46.43, continuing a recent bounce from around the 50-day line and other converging moving averages. Shares reached 47.89 intraday before paring gains. The warehouse automation specialist is flirting with a trendline entry, with the March 8 high of 47.05 as a specific trigger. It may be best to buy SYM stock at an early entry rather than wait for an official buy point. But it's a very volatile stock.
Microsoft stock advanced 2.7% to 415.01, rebounding from the 10-week line and retaking the 21-day line. That could offer an early or add-on entry. But unlike ServiceNow, Microsoft hasn't quite broken a trendline in its emerging flat base. Investors could wait for a little more progress, to the 416-417 level or above
Archrock stock rose 1.9% to 18.41, extending Tuesday's bounce from the 21-day moving average. That topped a short trendline, offering an early entry AROC stock has an ascending base with an official 19.42 buy point, according to the daily chart on MarketSurge. The natural gas services firm provides compression services related to natural gas pipelines and transport, which is faring better than ailing natgas production.
Nvidia Stock
Nvidia stock jumped 7.2% to 919.13, bouncing from the 10-day moving average in above-normal volume. That followed Monday's 2% decline and Friday's ugly downside reversal in huge volume. On March 7, the AI chip leader was the most extended vs. the 50-day that it's been since 2023. With Tuesday's move, NVDA stock is 35.6% above the 50-day line, still significantly stretched.
Tesla Stock
Tesla stock fell modestly in premarket trade. Shares edged down 0.1% to 177.54 on Tuesday, briefly setting a fresh 10-month low.
Before Wednesday's open, Wells Fargo downgraded Tesla to underweight and cut its price target to 125 from 200. The analyst expects deliveries to fall short, with weaker sales and prices pushing its 2024 EPS estimate nearly a third below consensus. Wells Fargo also said a yet-unveiled cheap EV may be not be a boon for Tesla, citing "likely tough" economics.
What To Do Now
The market rally once again has quickly found support. That resilience is impressive, but makes it hard for new bases to form. That's especially true of Nvidia and other AI chip names that have led the market in the past few months.
But a number of other sectors, including software, medical products and energy have some quality forging new bases. Some of these stocks have relative strength lines that have been lagging as a result, but generally after prior uptrends.
Investors could have taken advantage of some of these names, depending on their exposure levels. But with the market rally close to extended, the window to buy could close quickly. If the major indexes pull back soon, Tuesday's actionable stocks could struggle, at least temporarily.
This is why it's important to work on your watchlists, making sure you're looking beyond the hottest names at the moment. You want to spot emerging new opportunities before they've gotten extended.
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