Dow Jones futures rose slightly early Tuesday, along with S&P 500 futures and Nasdaq futures. General Electric, General Motors and Cadence Design Systems headlined earnings overnight. The Federal Reserve begins its latest policy meeting today, with Microsoft and Google after the close.
The stock market rally enjoyed modest gains Monday, with the Dow Jones win streak running to 11 sessions, the longest in six years.
Tesla rebounded back above a key level, shrugging off an analyst downgrade and further reports of a possible India factory. China stocks jumped Tuesday on hopes for new stimulus. Vipshop and Trip.com flashed buy signals, with internet and EV plays rallying.
Fed Meeting
The two-day Fed meeting gets underway Tuesday, with a policy announcement due Wednesday at 2 p.m. ET. Markets have a quarter-point Fed rate hike locked, but see only a modest chance of yet another move before year-end. How strongly will Fed chief Jerome Powell and policymakers make the case for that additional rate hike?
Dow Jones Futures Today
Dow Jones futures were up less than 0.1% vs. fair value. S&P 500 futures climbed 0.1% and Nasdaq 100 futures rose 0.4%.
The 10-year Treasury yield rose a few basis points to 3.89%.
Crude oil was little changed while copper futures climbed more than 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Key Earnings
Cadence Design reported Monday night, which also has implications for rival chip design software firm Synopsys. Both Cadence Design and SNPS stock are near buy points.
CDNS stock fell solidly after Cadence Design earnings just topped with revenue roughly in line. Shares dipped 0.65% to 214.27 on Monday, dropping below a 242.65 buy point from a short consolidation just above a flat base. SNPS stock declined slightly early tuesday. Synopsys stock is working on a handle just below a 468.03 cup base, according to MarketSmith analysis.
Auto and mobile chipmaker NXP Semiconductor and clinical studies specialist Medpace topped views late Monday after both closed modestly extended from buy zones. NXPI stock edged higher overnight while MEDP stock tumbled on weak guidance.
Nucor had mixed results. NUE stock fell slightly in late trade, not far from a buy point.
F5 reported strong results. FFIV stock jumped early Tuesday, signaling a move over multiple resistance areas to a 10-month high.
On Tuesday, earnings season kicks into high gear. General Electric, General Motors and RTX, formerly Raytheon Technologies, all beat second-quarter views and raised guidance. GE stock, already in buy range, popped in premarket trade. GM stock rose modestly, moving toward a buy point. RTX stock fell modestly as its Pratt & Whitney jet engine unit found a manufacturing defect.
Microsoft, Google parent Alphabet and Visa headline earnings late Tuesday. Microsoft is close to record highs, while Google stock is work on a handle entry. Visa stock is in a buy range.
Tesla is on IBD Leaderboard. Microsoft stock, Cadence Design and SNPS stock are on the IBD Long-Term Leader list. TSLA stock is on the IBD 50. CDNS stock and Tesla are on the IBD Big Cap 20.
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Stock Market Rally
The stock market rally had a modestly positive session Monday.
The Dow Jones Industrial Average rose 0.5% in Monday's stock market trading, hitting a fresh 15-month high. The S&P 500 index advanced 0.4% while the Nasdaq composite gained 0.2%, just below a rising 10-day line. The small-cap Russell 2000 climbed 0.3%.
Winners beat losers on the NYSE, while advancers lagged decliners slightly on the Nasdaq.
The Invesco S&P 500 Equal Weight ETF rose 0.3%, just below the S&P 500.
The First Trust Nasdaq 100 Equal Weighted Index ETF fell 0.3% vs. the Nasdaq 100's 0.2% gain. That reflects how megacaps, especially TSLA stock, buoyed the Nasdaq on Monday.
Growth stocks could still be in the midst of a pullback, but the overall market isn't showing a broad retreat.
U.S. crude oil prices climbed 2.2% to $78.74 a barrel, a three-month high. Copper futures rose 1%. China stimulus hopes boosted industrial commodities.
The 10-year Treasury yield rose about 2 basis points to 3.855%.
The U.S. dollar rose for a fifth straight session after tumbling earlier this month.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.1%, while the Innovator IBD Breakout Opportunities ETF edged up 0.1%.
The iShares Expanded Tech-Software Sector ETF slipped 0.3%. MSFT stock is a major IGV holding. The VanEck Vectors Semiconductor ETF nudged 0.1% higher. Cadence Design and SNSPS stock are in both the IGV and SMH ETFs.
Reflecting more-speculative stocks, ARK Innovation ETF retreated 1.1% and ARK Genomics ETF slid 2.2%. TSLA stock is the No. 1 holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF rose 1.2%, with NUE stock a key holding. U.S. Global Jets ETF descended 1.2%. SPDR S&P Homebuilders ETF climbed 0.4%. The Energy Select SPDR ETF advanced 1.6% and the Health Care Select Sector SPDR Fund fell 0.2%.
The Industrial Select Sector SPDR Fund climbed 0.2%.
The Financial Select SPDR ETF gained nearly 1%, with Visa stock a key holding. The SPDR S&P Regional Banking ETF popped 2.5%
Five Best Chinese Stocks To Watch Now
Tesla Stock
Tesla stock fell at Monday's open on a UBS valuation downgrade, but reversed higher to close up 3.5% to 269.06, reclaiming the 21-day line. The EV giant reportedly will hold further talks with India about setting up a plant there. Shares may be working on a handle after tumbling late last week following earnings that raised investor concerns about profit margins.
What To Do Now
The stock market rally is continuing to move higher, though growth plays were mixed Monday. A lot of stocks still seem stretched, or are pulling back, often to key support levels. With the earnings flood starting to hit and the Fed meeting on tap, investors may want to be cautious about new buys.
Many stocks aren't far from being actionable from a variety of sectors, so run your screens and have your watchlists ready.
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.
