Major indexes rallied in the last hour of trading Wednesday as the Dow Jones Industrial Average and S&P 500 broke three-day losing streaks. Donald Trump's Trump Media soared while GameStop plunged on earnings. Nvidia fell and Super Micro Computer trimmed early losses, while Cathie Wood holding Robinhood soared on the stock market today.
Bulls remained in charge of the Dow Jones, which gained 1.2%, or 477 points, while the S&P 500 added 0.9%. Both rebounded after three straight days in the red. On the S&P, all sectors gained.
The Nasdaq also rose after sideways action during much of the trading day and ended 0.5% higher. This comes after it and the S&P posted yet another distribution day on Tuesday, flashing warning signs of a market top. Investor's Business Daily continues to recommend 60%-80% exposure for now.
The latest Investors Intelligence report found continued elevated bullish sentiment, though lower from the prior week. Bearish sentiment also fell slightly from last week's lows. The number of advisors projecting a correction fell from 25% to 24.2. Nonetheless "high levels of optimism reflect increased risk but are not calls for immediate sales," Investors Intelligence noted.
Volume fell on the New York Stock Exchange and the Nasdaq, according to preliminary closing data. Breadth was strong, with advancers outnumbering decliners by 4-to-1 on the NYSE and nearly 3-to-1 on the Nasdaq.
The small-cap Russell 2000 rose 2.1% but the Innovator IBD 50 exchange traded fund slipped 1% on the stock market today. The yield on the benchmark 10-year Treasury note fell nearly 4 basis points to 4.19%.
Holiday Retail Sales, Dow Jones Stocks
One thing for investors to watch for is Friday's report from the Commerce Department on Personal Income and Outlays for February. That will include the personal consumption expenditures index, a key inflation gauge that the Federal Reserve uses to determine interest rates. Core PCE is seen staying unchanged at 2.8% year over year, according to Econoday.
Another item that should be on investors' radar is retail sales heading into the Easter holiday. The holiday's early arrival could put a dent in retail sales, according to MarketWatch. The National Retail Federation sees a potential 7% year-over-year decline in spring holiday retail sales as a result.
Meanwhile, a majority of stocks in the Dow Jones index gained ground.
Apple rose more than 2% but Microsoft ended slightly lower. Salesforce fell 1.5% and Visa fell 0.6% as it tests its 50-day line.
Merck gapped up 5% on a big FDA win for its cardiovascular drug. The stock topped an alternate buy point at 130.24.
Futures: Small Caps Power Higher As Growth Leaders Retreat
Stock Market Today: Semtech, Carnival, Cintas
Elsewhere, analysts at Baird gave semiconductor stock Semtech an outperform rating and a price target of 40 ahead of earnings on Thursday. That is a 59% upside based on Tuesday's closing price. Shares have rebounded from the 10-week moving average while also rising further above a recent resistance level at the 200-day moving average.
Carnival reversed to close 0.9% higher, and Cintas rose 8.3%, after their earnings reports. Carnival raised its outlook but expects to take a hit to earnings due to costs for rerouting around the Red Sea conflict.
Among the Magnificent Seven, Google parent Alphabet is approaching a buy point of 153.78. Also, Nvidia tumbled for a second straight day, dropping 2.5% after falling 2.6% on Tuesday.
Tesla rose over 1% on the stock market today even after analyst Itay Michaeli at Citi lowered his price target to 196 from 224 with a neutral rating. The analyst also expects lower first-quarter deliveries of 429,900 vs. earlier estimates of 473,300.
Outside the Magnificent Seven, Super Micro Computer, a key artificial intelligence player in the server market, trimmed its losses to 0.2%.
Meme stocks were back in play on the stock market today. GameStop plunged 15% after fourth-quarter sales declined for the second straight quarter, though earnings grew. Shares gapped down below the 50-day moving average in strong volume, which is a sell signal. The stock also undercut its base in intraday trades.
Reddit, a popular social media platform for retail investors, sold off 11% after rallying on its debut last week. Meanwhile, Trump Media & Technology soared 14.2% on the second day of trading. But speculation is rife that the stock may be getting a lift from short sellers.
HubSpot, Monday.com Setting Up
Some software stocks are in bases. HubSpot is testing the 50-day moving average in a flat base, while IBD 50 stock Monday.com is close to a buy point.
Shares of Robinhood rose nearly 4% after the brokerage firm launched its first credit card. Robinhood is a holding in Cathie Wood's ARK Innovation ETF.
Tuesday's Stock Of The Day, ServiceNow, is in a flat base with a buy point of 815.32. The enterprise software company has a perfect IBD Composite Rating of 99. Also, biotech Vericel broke out from a flat base with a buy point of 50.09.
In real estate, Forestar Group broke out of a cup with handle with a buy point of 38.29 while medical tech stock 4D Molecular Therapy hit buy ground out of a cup base with an entry at 35.61 and ended just above the buy point Wednesday. The relative strength line is at a new high for both stocks. But volume was weak for 4D Molecular.
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