Dow Jones futures rose early Friday, along with S&P 500 futures and especially Nasdaq futures after the stock market rally staged a downside reversal Thursday. Intel, Roku and First Solar were big earnings movers overnight. Key inflation data is on tap.
The major indexes had a strong open Thursday, especially the Nasdaq, as Meta Platforms and chip stocks roared higher. But the indexes reversed lower amid surging Treasury yields. The Dow Jones snapped a 13-day win streak, the longest since 1987. Better-than-expected GDP growth and other economic data buoyed stocks initially, but they also fueled yields.
META stock and chipmakers came well off early highs.
Meanwhile, ServiceNow quickly reversed lower despite strong earnings and guidance. Microsoft added to Wednesday's post-earnings losses, breaking key support. Some more-speculative AI plays, including C3.ai and Upstart Holdings had big outside days to the downside.
Tesla retreated Thursday, though the move was potentially constructive.
Chip-gear makers and cruise lines were winners Thursday, with Lam Research and Royal Caribbean leading the charge on their earnings reports. But they also came off highs.
Solar IPO Nextracker gapped out of a base on strong volume following earnings, soaring 12.4% to 44.19, hitting a new high. NXT stock came public in February at $24 a share.
Overnight Earnings
Industry giant First Solar reported after the close, along with Enphase Energy. FSLR stock soared to a big beat, signaling early entries. ENPH stock dived on mixed results and weak guidance.
Intel, KLA, DexCom, Roku, Ford Motor, Deckers and Skechers were also notable earnings reports late.
Intel reported a surprise Q2 profit and generally bullish guidance. INTC stock jumped. KLAC stock was a late winner, building on Thursday's 5.3% jump on Lam Research's results.
Roku easily beat views. ROKU stock jumped late after falling back hard over the prior few sessions. Skechers and DXCM stock also were overnight earnings winners, while Ford and DECK stock edged lower.
Exxon Mobil slightly missed EPS views early Friday, while revenue topped. XOM stock edged lower.
Chevron reported full Q2 results after releasing better-than-expected EPS and some other figures on Sunday. On Friday, revenue came in light. CVX stock fell slightly.
META stock, Tesla and Royal Caribbean are on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Royal Caribbean, Norwegian Cruise and CCL stock are on the IBD 50 list, along with ServiceNow. TSLA stock is on the IBD Big Cap 20. Carnival was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures advanced 0.4% vs. fair value. S&P 500 futures rose 0.6% and Nasdaq 100 futures climbed 1%. Intel stock and Chevron are both Dow Jones component.
The 10-year Treasury yield fell 6 basis points to 3.95%.
The Commerce Department will release June's PCE price index, the Fed's favorite inflation gauge, as part of the income and spending report at 8:30 a.m. ET. The PCE inflation rate is expected to cool to 3% from May's 3.8%. The core PCE inflation rate should slow to 4.2% from May's 4.6%.
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 modest losses Thursday, but it was an ugly session given the session's strong start, especially for the Nasdaq.
META stock, up as much as 9%, closed with a 4.4% gain. ServiceNow opened 4% higher but ended down 3%. MSFT stock fell 2.1%, closing below its 50-day line for the first time since March 1 after sliding 3.8% on Wednesday.
The 10-year Treasury yield spiked 16 basis points to 4.01%, moving back toward 2023 highs. The U.S. dollar also continued its two-week rebound.
U.S. crude oil prices climbed 1.7% to $80.09 a barrel, topping the $80 level for the first time since April.
The Dow Jones Industrial Average fell 0.7% in Thursday's stock market trading. The S&P 500 index closed down 0.6% after touching its best level since March 2022. The Nasdaq composite retreated 0.55%. The small-cap Russell 2000 slumped 1.3%.
The Invesco S&P 500 Equal Weight ETF fell 0.9% after fractionally hitting 2023 highs.
The First Trust Nasdaq 100 Equal Weighted Index ETF briefly hit a 52-week high, unlike the Nasdaq or Nasdaq 100, but closed off 0.4%.
The market enjoys broad leadership. Megacaps, chips and software are at the forefront, but travel, housing, industrials, some medicals and even some financials are among leaders.
The Nasdaq is now 4.2% above its 50-day line, the first time it's been less than 5% since May 25. It still hasn't touched the 21-day line since May 5.
Cooling some speculative frenzy may be positive. AI stock jumped 6% early and reversed for a 7% loss, possibly facing a 10-week line test. UPST stock reversed lower for an 8% decline. Both are up huge in 2023.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 0.6%. The iShares Expanded Tech-Software Sector ETF was down 0.8%, with Microsoft a massive holding and NOW stock also a key component. The VanEck Vectors Semiconductor ETF was up 1.8%. Lam Research is a notable SMH holding, along with Intel and KLAC stock.
Reflecting more-speculative story stocks, ARK Innovation ETF slid 2.9% and ARK Genomics ETF 2.6%. Tesla stock is the No. 1 holding across Ark Invest's ETFs. ROKU stock is a top-five holding for Cathie Wood's Ark funds.
SPDR S&P Metals & Mining ETF retreated 1.9%. U.S. Global Jets ETF descended 2.1% as mixed results and higher fuel costs ahead hit carriers. SPDR S&P Homebuilders ETF dipped 0.1%. The Energy Select SPDR ETF sank 0.6%, with XOM stock and Chevron dominant components. The Health Care Select Sector SPDR Fund retreated 0.7%, with DXCM stock part of the ETF.
The Industrial Select Sector SPDR Fund sank 0.9%.
The Financial Select SPDR ETF slid 1.3%. The SPDR S&P Regional Banking ETF declined 1.7%.
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Tesla Stock
Tesla stock fell 3.3% to 255.71, but in below-average volume. Shares are working on a possible handle to a consolidation going back to September. The handle buy point is 299.29. TSLA stock also is close to testing its 10-week line for the first time since the June 1 breakout, according to MarketSmith.
What To Do Now
The start of a market rally is when investors should be planting their seeds. Sometimes the market climate will turn, and those early sprouts won't take hold, but when there's a follow-through day to confirm a new uptrend, you want to be starting to build up your portfolio.
Now, months into a market rally, it's a time to be making adjustments, making some incremental buys, adding to winning positions and pruning some laggards. With the Nasdaq trending higher but with ups and downs, it's not a great time to be making big new bets, especially in one fell swoop.
A pullback or pause over a few weeks could set the stage for a more consistent advance, like early May to mid-June.
Earnings season remains in full force, so pay close attention to upcoming results that could affect your portfolio.
Keep working on your watchlists. More stocks are rounding out bases or handles or pulling back to key levels in recent days.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
