Dow Jones futures edged lower early Wednesday, along with S&P 500 futures and Nasdaq futures, with the August CPI inflation report due Wednesday morning.
The stock market rally suffered slim-to-solid losses Tuesday, with the S&P 500 and Nasdaq back below the 50-day line. Energy stocks led while software retreated as Oracle plunged on mixed results. AAPL stock retreated as Apple unveiled the iPhone 15 and other products.
Salesforce.com, Alphabet General Electric, Shopify and AI leader Nvidia are stocks in or near buy areas.
The European Union has launched a probe of China EV subsidies. That hit China EV stocks such as Nio and XPeng.
NVDA stock is on IBD Leaderboard, with Salesforce on the Leaderboard watchlist. GE stock is on SwingTrader. Nvidia and CRM stock are on the IBD 50. Nvidia and Google stock are on the IBD Big Cap 20. GE was Tuesday's IBD Stock Of The Day.
The video embedded in this article discusses the market action and analyzes Apple stock, GE and Nextracker.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures slid 0.1% and Nasdaq 100 futures lost 0.2%.
The 10-year Treasury yield rose several basis points to 4.31%.
U.S. crude oil futures rose slightly, moving above $89 a barrel.
The CPI inflation report is sure to swing Dow futures and Treasury yields before the open Wednesday.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
CPI Inflation Report
The Labor Department will release the August consumer price index at 8:30 a.m. ET. Economists expect a 0.6% increase vs. July, a pickup from July's 0.2% gain, as gasoline prices rebound. The overall CPI inflation rate should climb to 3.6% from July's 3.2% and June's 3%.
Core CPI, which excludes food and energy, should increase 0.2% vs. the prior month, steady with July. The core inflation rate should cool to 4.4% from July's 4.7%.
Markets see little chance of a Fed rate hike at the end of the Sept. 19-20 policy meeting, with roughly 40% odds of a move by the Nov. 1 Fed meeting announcement.
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Apple iPhone 15
The Apple iPhone 15 base model starts at $799 and the iPhone 15 Plus begins at $899. Some of the best new features come with the two Pro variants. The iPhone 15 Pro Max will start at $1,199, up $100 from the prior version.
The new iPhone comes with a USB-C connector.
The Dow tech giant also announced new Apple Watch models and AirPods.
Apple stock fell 1.7% to 176.30 on Tuesday. Shares tumbled last week on a report that China will significantly expand its ban on using the iPhone at government offices.
Apple stock has a 198.23 consolidation buy point, but the relative strength line is at a six-month low.
Stock Market Rally
The stock market rally generally retreated after Monday's bounce.
The Dow Jones Industrial Average lost a fraction in Tuesday's stock market trading, after hitting resistance at the 50-day moving average. The S&P 500 index fell 0.6% and the Nasdaq composite gave up 1%, both dropping back below the 50-day. The small-cap Russell 2000 was essentially flat, still holding above the 200-day line.
The 10-year Treasury yield fell 2 basis points to 4.26%, with relatively tight closes in the past few days.
U.S. crude oil prices rose 1.8% to $88.84 a barrel, a 10-month closing high.
Energy remains the strongest sector, fueled by rising oil prices. The leading energy stocks are generally extended now.
Software has been strong, but Oracle stock weighed on many names in the sector. Oracle's mixed results raise the stakes for Adobe earnings on Thursday night.
Many other sectors are struggling. A few good days and many good stocks would be actionable or in position. But a couple of bad days and many would look seriously damaged.
That's not surprising with the market rally under pressure with breadth anemic.
The major indexes decisively breaking above the 50-day line would be a bullish sign. But an S&P 500 or Nasdaq close below the low of their Aug. 29 follow-through day would be highly bearish.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell just over 1%. The iShares Expanded Tech-Software Sector ETF tumbled 2.9%, with ORCL stock and Salesforce among the biggest components. The VanEck Vectors Semiconductor ETF sank 0.75%, with Nvidia stock the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF declined 1.3% and ARK Genomics ETF dipped 0.1%. SHOP stock is a significant holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF advanced 0.4% and the Global X U.S. Infrastructure Development ETF sank 0.5%. U.S. Global Jets ETF descended a fraction. SPDR S&P Homebuilders ETF retreated 1.8%. The Energy Select SPDR ETF rebounded 2.4% and the Health Care Select Sector SPDR Fund nudged down 0.1%.
The Industrial Select Sector SPDR Fund slumped 0.4% even though GE stock is a big holding.
The Financial Select SPDR ETF rose 0.7%. The SPDR S&P Regional Banking ETF advanced 0.8%.
Tesla Archrival Flashes Buy Signal
Stocks Near Buy Points
CRM stock fell 1.6% to 221.66, not far from a 228.79 buy point from a cup-with-handle base. Investors could use Monday's high of 226.83 as an early entry.
Salesforce kicked off its Dreamforce conference Tuesday. It unveiled Einstein Copilot, a conversational chatbot that will be used across Salesforce's software lines, including Slack.
Google stock gave up 1.15% to 135.34, but is still in buy range. Shares have been pausing in September after clearing a shelf entry at 133.74, just above a cup-with-handle base. The relative strength line has been marching steadily higher.
The Justice Department-Google antitrust court case began Tuesday, with the DOJ accusing the tech titan of using its market dominance to limit competition in its search and search advertising businesses. Google stock is holding in a buy area.
GE stock climbed 0.65% to 115, building on Monday's bounce off the 50-day line. General Electric has a 117.96 buy point from a flat base. It's the first real base since a January breakout. GE stock is actionable from the 50-day and a downward-sloping trend line. Shares backed off an intraday high of 116.82, closing below another early entry of 115.85.
GE stock is benefiting from woes at RTX, formerly Raytheon Technologies. RTX stock has plunged this week on a profit warning due to a major jet-engine recall at its Pratt & Whitney unit, which competes with GE.
SHOP stock declined 2.5% to 62.93, working on a 67.60 cup-with-handle buy point, according to MarketSmith analysis. Investors could use a move above Tuesday's high of 64.92 as an early entry.
Nvidia stock slipped 0.7% to 448.70, just below its 50-day line. A couple of attempts at clearing the 500 level fizzled out in late August, but the RS line hasn't given up much ground. NVDA stock could be starting to build a new base. Aggressive investors could start or add to a position with a move above the 21-day line.
What To Do Now
The market rally is trading around its 50-day line. Until the major indexes break higher or lower, investors shouldn't be making big new bets. Few stocks have been flashing buy signals in any case.
The CPI inflation report Wednesday morning and Adobe earnings Thursday evening are possible market catalysts.
Investors need to be prepared and remain flexible. Have your stock lists up to date. On the downside, what's your game plan if the market rally significantly weakens?
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