Dow Jones futures edged higher early Wednesday, along with S&P 500 and Nasdaq futures. The stock market rally had a strong Tuesday as job openings fell much more than expected, with all the major indexes moving back above their 50-day moving averages. The Nasdaq led as growth stocks revved higher on lower Treasury yields and Fed rate-hike odds.
Tesla, Nvidia and Google parent Alphabet were big winners among the megacaps, all flashing buying opportunities.
China's PDD Holdings and Li Auto surged, flashing buy signals. MercadoLibre, ServiceNow, Axcelis Technologies and, arguably, ORCL stock also look actionable.
Meanwhile bitcoin and bitcoin-related stocks surged after a federal appeals court ruled that the SEC was wrong to prevent Grayscale from turning its Grayscale Bitcoin Trust into an actual Bitcoin ETF. Bitcoin jumped back above $27,000 and GBTC surged 17%.
Coinbase soared 14.9% and Marathon Digital skyrocketed 29%.
HP Enterprise, HP Inc. and Box reported after the close. HPE fell modestly overnight while HPQ stock and Box sold off.
Nvidia stock is on IBD Leaderboard. LI stock was added to SwingTrader. NVDA stock, Li Auto and MELI stock are on the IBD 50. Nvidia and GOOGL stock are on the IBD Big Cap 20. Oracle was Tuesday's IBD Stock Of The Day.
The video embedded in this article discussed Tuesday's bullish action and analyzed Li Auto, Oracle and MELI stock.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures edged higher and Nasdaq 100 futures climbed 0.15%.
Futures picked up slightly after the ADP Employment Report showed private payrolls rose by 177,000 in august vs. estimates for 200,000. July's gain was revised up to 371,000 from 324,000. It's another weak labor report, but the official Labor Department jobs report is due Friday.
The 10-year Treasury yield rose a few basis points to 4.14%.
Crude oil futures edged higher.
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 advanced Tuesday, picking up momentum at 10 a.m. ET as the Labor Department's JOLTS survey provided a jolt. Posted job openings fell 338,000 in July to 8.8 million, the lowest number since March 2021. That was much lower than expected, with June job openings revised down sharply to 9.165 million.
The Grayscale Bitcoin ETF ruling added to the enthusiasm.
The Dow Jones Industrial Average rose 0.85% in Tuesday's stock market trading. The S&P 500 index ran up 1.45%, with Tesla stock the top performer and Nvidia also a winner. The Nasdaq composite jumped 1.7%. The small-cap Russell 2000 bounced 1.4%.
U.S. crude oil prices rose 1.3% to $81.16 a barrel.
The 10-year Treasury yield tumbled 9 basis points to 4.12%, sliding on the job openings data. The odds of a late Sept. 20 hike fell to 14%. Crucially, the odds of a rate hike by the November meeting fell to just below 50-50 from about 62% on Monday.
July PCE inflation data, the Fed's favorite gauge, is due Thursday morning. On Friday, Labor will release the August jobs report.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF gained 2.3%. The iShares Expanded Tech-Software Sector ETF rose 1.9%, with NOW stock and Oracle both key members. The VanEck Vectors Semiconductor ETF popped 2.6%, with NVDA stock the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF jumped 5.4% and ARK Genomics ETF leapt 3.9%. Tesla stock is the No. 1 holding across Ark Invest's ETFs. COIN stock also is a top-five Ark holding. Cathie Wood's Ark also owns some GBTC and MELI stock.
SPDR S&P Metals & Mining ETF climbed 2.4% and the Global X U.S. Infrastructure Development ETF 1.5%. U.S. Global Jets ETF ascended 1.7%. SPDR S&P Homebuilders ETF stepped up 2.4%. The Energy Select SPDR ETF edged 0.3% higher and the Health Care Select Sector SPDR Fund rose 0.9%.
The Industrial Select Sector SPDR Fund advanced 0.8%.
The Financial Select SPDR ETF gained 0.9%. The SPDR S&P Regional Banking ETF was up 0.95%.
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Megacap Stocks
Nvidia stock popped 4.2% to 487.84, a record close. If you ignore the Aug. 24 post-earnings reversal, investors could treat 480.88 as a legitimate breakout buy point.
Google stock rose 2.7% to 234.57. Shares are now extended from a 127.10 cup-with-handle buy point, according to MarketSmith analysis. But it's now cleared an alternate entry of 133.74 from a multiweek shelf.
At Tuesday's Google Cloud Next event, Google Cloud chief Thomas Kurian and Nvidia CEO Jensen Huang expanded their partnership, announcing new AI infrastructure and software for customers to build and deploy massive generative AI models.
Tesla stock surged 7.7% to 257.18, racing past the 21-day line and just closing above the 50-day line. Shares edged lower early Wednesday, just enough to dip back below the 50-day. Investors could use a move above Tuesday's high of 257.48 as an entry now.
Tesla stock has a new base with a 299.29 buy point.
Investor buzz is building for the upcoming Cybertruck and upgraded Model 3. Meanwhile, renewed China optimism buoyed Chinese stocks and China-exposed stocks such as Tesla.
Stocks In Buy Zones
PDD stock spiked 15.4% to 93.22, just clearing a 92.79 cup-with-handle buy point. Investors could wait to see if PDD can pause for a few days to spot a new opening. Before the open, PDD earnings easily beat views, with revenue growth accelerating to 66% despite concerns over China's economy. PDD is parent of China e-commerce giant Pinduoduo as well as fast-growing U.S. site Temu.
LI stock leapt 7.8% to 42.91, vaulting above the 21-day line. At that point, shares of the profitable China EV startup are on the cusp of being extended from the 21-day. Li Auto stock could forge a new base with a 47.33 potential buy point.
Early Wednesday, LI stock fell 4%. Li Auto announced a new insurance subsidy, the first time it's taken part in China's EV price war, even indirectly. That's especially notable because the EV startup has said production bottlenecks, not demand, are limiting deliveries.
MELI stock popped 4.4% to 1,304.66, rebounding from the 21-day line after finding support at the 50-day line late last week. That could offer an early entry into the Latin American e-commerce and payments giant. In early August, MercadoLibre stock briefly broke out of a cup base as part of a post-earnings run but quickly tumbled back. MELI stock may be working on a new base, though one could view 1,388.39 as an awkward-looking handle.
ACLS stock jumped 6.5% to 183.53, reclaiming the 50-day line, though in below-average volume. The EV-exposed chip-equipment maker is working on a new base, but needs more time. Some chip-equipment giants, including Applied Materials and KLA Corp., are near possible buy points as well.
NOW stock rose 1.9% to 578.87. That offered an early entry from a 50-day bounce, clearing a short-term high and breaking a downward-sloping trendline. But volume was well below normal. Also, key software earnings this week, notably Salesforce.com on Wednesday night, could move ServiceNow stock.
ORCL stock rose 3.3% to 120.65 in higher volume, bouncing from the 50-day line amid a UBS upgrade on AI prospects. Investors could have spotted an early entry from a downward-sloping trendline or the Aug. 23 short-term high of 120.45, though resistance remains at 121.36. The official Oracle stock buy point is 127.54 from a flat base. In addition to key software earnings this week, Oracle earnings are due in two weeks.
Market Rally Analysis
The stock market rally showed real strength Tuesday. The major indexes all reclaimed their 50-day moving averages and topped last Thursday's highs, with volume running well above normal. The Nasdaq in particular had a bullish session.
Market breadth was strong, even better than on Monday. That follows weeks of deteriorating breadth.
Growth stocks were the clear winners Tuesday. Several offered clear early entries, such as Li Auto. Others closed right around entries, such as Tesla and ORCL stock. Many others had possible setup days, such as Meta Platforms.
But many other sectors are looking interesting, even when Tuesday's moves weren't dramatic.
Housing stocks had a strong session as Treasury yields fell, though housing retailer and building materials firms have better charts than most builders.
Energy stocks continue to trade sideways after strong runs, along with crude energy prices. Industrial, construction, infrastructure and some steel plays are looking healthy.
Volume often was anemic on non-tech stocks flirting with buy signals.
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What To Do Now
Tuesday was a clear-cut bullish signal for the market rally. Investors probably should have added some exposure Tuesday, and could keep doing so if market conditions remain favorable. But do so gradually.
Keep in mind that July job openings fueled Tuesday's market rally. July PCE inflation data or August jobs report could fuel further gains. But if those readings come in hot, stocks could fall back as yields rebound.
Earnings from Salesforce, Broadcom, MongoDB and more also could swing key tech sectors in the next few days.
There wasn't a flood of new buying opportunities Tuesday, but many were setting up. Investors need to make sure their watchlists are up to date, paying extra attention to stocks that are actionable or nearly so. Make sure your watchlists include leading stocks outside of the tech growth realm.
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