Dow Jones futures fell slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is on tap, with Cava Group, Spotify and Nvidia-backed AI startup Soundhound AI headlining big earnings reports overnight.
The stock market rally retreated Tuesday after a huge run, while Treasury yields jumped. The Nasdaq and S&P 500 gave up little ground while the Dow Jones and especially small caps fell solidly. Shopify led big earnings winners while Zeta Global plunged.
Tesla fell solidly Tuesday but after a massive run over the prior week. Donald Trump late Tuesday named CEO Elon Musk to co-run a government efficiency effort.
Nvidia rose around record highs, around buy points, but other AI chip plays were generally down.
Nvidia is on IBD Leaderboard, with Tesla stock, Shopify and Cava on the Leaderboard watchlist. Nvidia and Cava stock are on SwingTrader. Zeta and Nvidia stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures lost 0.1% and Nasdaq 100 futures fell 0.2%.
The 10-year Treasury yield edged down to 4.42%.
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
The October consumer price index is due at 8:30 a.m. ET Wednesday. Economists expect a 0.2% CPI rise with core CPI up 0.3%. The CPI inflation rate is expected to pick up to 2.6% vs. a year earlier while core inflation holds at 3.3%.
Key Earnings
Cava stock, Spotify, FanDuel parent Flutter Entertainment, Instacart parent Maplebear, Rocket Lab and Soundhound reported earnings late Tuesday, while CyberArk Software released results early Monday.
Spotify stock, Cava, CyberArk and especially Rocket Lab surged in in premarket trade. Flutter stock rose modestly, signaling a move above a traditional buy point.
Meanwhile, Instacart stock and Soundhound AI fell solidly. Nvidia has a stake in AI startup Soundhound.
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Stock Market Rally
The stock market rally retreated, but the Nasdaq barely fell. The S&P 500 and even the Dow held up reasonably well given recent gains and Tuesday's jump in Treasury yields.
The Dow Jones Industrial Average dipped 0.1% in Tuesday's stock market trading. The S&P 500 index fell 0.3% and the Nasdaq composite declined 0.1%, their first losses in six sessions.
The small-cap Russell 2000 tumbled 1.8%, but that's after a 9.7% jump over the prior five sessions.
Much like the Russell, some postelection winners such as Tesla suffered big percentage losses, but in the context of huge recent gains.
U.S. crude oil prices rose 8 cents to $68.12 a barrel.
The 10-year Treasury yield jumped 12 basis points to 4.43%, back near recent four-month highs after U.S. bond markets were closed Monday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.7%. The iShares Expanded Tech-Software Sector ETF rose 0.5%, with Zeta stock a holding. The VanEck Vectors Semiconductor ETF declined 0.7%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF retreated 1.8% and ARK Genomics ETF slumped 4%. Tesla stock is still a major holding across Ark Invest's ETFs. Cathie Wood also has built up a big stake in Nvidia.
SPDR S&P Metals & Mining ETF gave up 2.5% and the SPDR S&P Homebuilders ETF lost 2.6%. The Energy Select SPDR ETF slipped 0.5% and the Health Care Select Sector SPDR Fund retreated 1.4%.
The Industrial Select Sector SPDR Fund dropped 0.9%.
The Financial Select SPDR ETF dipped 0.3%.
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Tesla Stock
Tesla stock fell 6.1% to 328.64 on Tuesday. But that followed a five-session, 44.1% spike, mostly on Donald Trump's victory on Nov. 5.
TSLA stock just lost a sliver of its recent gains and is still 21% above its 21-day line. But it's a reminder that investors should avoid buying hot stocks that are extended.
CEO Elon Musk was a huge supporter of Trump's election bid. There are hopes among Tesla investors that Trump policies will favor Tesla.
On Tuesday night, President-elect Trump announced in a statement that Elon Musk and Vivek Ramaswamy will lead the Department of Government Efficiency (DOGE) to "dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures and restructure Federal Agencies."
Musk, in the statement, said, "This will send shockwaves through the system."
TSLA stock rose 1% early Wednesday.
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What To Do Now
The stock market rally held up relatively well Tuesday given the gains over the past week. Anyone riding the elevator up can't be surprised if the market and individual stocks take a gradual escalator down a floor or two. As long as the market and stocks are holding the bulk of their Trump bumps, investors shouldn't be too concerned.
Don't buy extended stocks. Wait for pullbacks to key moving averages or new bases. Of course, even when buying stocks at good spots, they may struggle if the market pulls back modestly.
Still watch out for earnings. Nvidia earnings in particular will be key for AI stocks and the broader market. So have watchlists up to date with key earnings flagged.
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Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
