Dow Jones futures fell early Wednesday, with S&P 500 futures and especially Nasdaq futures down sharply as Magnificent Seven stocks Tesla and Google-parent Alphabet retreated on earnings.
The stock market rally was mixed Tuesday, with the major indexes edging lower into the close while small caps had another strong session.
Nvidia fell back, stopped at the 21-day line. Fellow Magnificent Seven stocks Microsoft, Amazon.com and Meta Platforms rose, but also hit resistance. All of these names were down slightly early Wednesday.
GE Aerospace, Spotify Pentair and HCA Healthcare flashed buy signals Tuesday on earnings.
Nvidia stock is on IBD Leaderboard and the IBD 50. GE stock is on SwingTrader. GE Aerospace was Tuesday's IBD Stock Of The Day.
The video embedded in the article reviewed Tuesday's stock market action and analyzed GE Aerospace, Pentair and HCA stock.
Dow Jones Futures Today
Dow Jones futures fell 0.5% vs. fair value, with Visa stock a Dow component. S&P 500 futures sank 0.9% while Nasdaq 100 futures lost 1.35%. Tesla stock and Google are huge S&P 500 members.
The 10-year Treasury yield edged down to 4.23% after slipping 2 basis points to 4.24% on Tuesday.
Crude oil futures climbed 1% after tumbling 7.1% in the prior four sessions.
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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Tesla Earnings Miss
Tesla earnings missed views. Revenue climbed slightly vs. a year earlier. However, auto revenue fell nearly 7%, more than expected. That's despite a whopping $890 million in regulatory credits vs. $442 million in Q1 and $282 million in Q2 2023. Q2 deliveries fell vs. a year earlier. Also, cheap financing, which Tesla has leaned on in recent months, carries a cost.
Tesla, in its earnings statement, said still-unseen lower-cost models should start production in the first half of 2025. Presumably, mass output would come later.
Elon Musk, who stammered throughout the Tesla earnings conference call, didn't provide much else on the "product roadmap."
Musk reiterated Monday comments made on social media that he expects the Optimus robot to do be doing "useful" tasks in Tesla factories by late next year. That's pushing back from prior plans for the end of 2024.
The robotaxi event will now be held on Oct. 10. Musk had already confirmed that the Aug. 8 date was being pushed back.
Musk said it's "possible" that unsupervised full-self driving could take place this year and said he would be "shocked" if it doesn't happen this year. The Tesla CEO has said for almost a decade that full autonomy would likely happen "this year."
Musk said Tesla may seek supervised FSD approval in China and Europe by year-end.
Musk bemoaned the difficulty of obtaining Nvidia GPUs. A few months ago, Musk diverted Nvidia chips from Tesla to his sister companies.
Tesla Stock Plunges
Tesla stock tumbled more than 8% in premarket trade, signaling a move below its 21-day line. Shares fell 2% to 246.38 Tuesday. After a big run-up, TSLA stock has a 271 handle buy point on a consolidation going back several months to a year.
Google Earnings Beat
Google earnings beat views amid strong online search ad revenue, though YouTube ad revenue missed.
Google Cloud revenue jumped 29%, beating. The cloud-computing unit is vying with the larger Amazon Web Services and Microsoft Azure.
Late Monday, cybersecurity startup Wiz rejected a $23 billion takeover offer from Google, seen as a effort to beef up cloud and security.
On the conference call, Google signaled heavy spending in Q3, which will pressure margins. The internet giant also will invest more on its autonomous driving unit Waymo.
Google stock fell 4% early Wednesday, signaling a move back below the 50-day line after retaking that level on Monday. Shares edged up 11 cents to 181.90 on Tuesday, but hit resistance at the 21-day line.
Other Tech Titans
Microsoft stock lost 1% in the wake of Google's results. Like Google, the Dow tech titan rebounded Monday from its 50-day line. On Tuesday, MSFT inched up 0.4%, but hit resistance at its 21-day.
Amazon stock edged lower early Wednesday. Shares rose 2.1% on Tuesday to 186.41, stalling at the 50-day line but below a still-valid 191.70 buy point.
Meta stock fell 3% in extended trade. Shares ticked up 0.3% on Tuesday, hitting 50-day line resistance as it continues to recover from a tumble from record highs.
Microsoft, Amazon and Meta earnings are due next week.
Nvidia stock fell almost 2%. Shares dipped 0.8% to 122.59 on Tuesday, hitting 21-day line resistance. NVDA stock is above its 50-day line.
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Other Earnings
In addition to Tesla and Google, Dow giant Visa, Seagate Technology, Texas Instruments and FTAI Aviation also reported late Tuesday. Visa, which has been a laggard, fell further. Seagate, Texas Instruments and FTAI rose, all near 52-week highs.
Early Wednesday, Tenet Healthcare and Vertiv reported. THC stock signaled a breakout after flashing a buy signal Tuesday on results from rival hospital chain HCA. AI cooling play Vertiv fell further from its 50-day line.
Stock Market Rally
The stock market rally showed mixed action Tuesday, though market breadth was modestly positive.
The Dow Jones Industrial Average dipped 0.1% in Tuesday's stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite lost less than 0.1%.
The small-cap Russell 2000 jumped 1%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 1.4%. The iShares Expanded Tech-Software Sector ETF edged up 0.2%. The VanEck Vectors Semiconductor ETF fell 1.1%. Nvidia stock is by far the biggest component in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF inched up 0.2% while ARK Genomics ETF gained 2.1%. Tesla stock is the top holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF climbed 0.7%. SPDR S&P Homebuilders ETF advanced 0.4%. The Energy Select SPDR ETF retreated 1.6%.
The Health Care Select Sector SPDR Fund lost a fraction, with HCA stock a member. The Industrial Select Sector SPDR Fund fell 0.2%, with GE stock the No. 1 holding.
The Financial Select SPDR ETF edged up 0.2%, with Visa a major member. The SPDR S&P Regional Banking ETF rose 1.6%.
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What To Do Now
The market rally is still acting well. It's unclear if megacap techs such as Nvidia and Microsoft will rev higher or take a longer, well-deserved break. In the meantime, many stocks in the housing, financial and industrial sectors, and others, are showing strength.
Investors should have decent-to-heavy exposure, depending on what you're holding. If you were quick to react to the market rotation out of big techs, you might be heavily invested. Others may have pared back losers without making many new buys.
The next two weeks of earnings and Fed-related news mean investors need to pay close attention. Be ready to act by keeping your watchlists and exit plans up to date.
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