Dow Jones Futures: Nvidia-led reversal is a blow to the attempted market rally

Dow Jones futures were little changed overnight, while S&P 500 futures and Nasdaq futures rose slightly. Robinhood Markets (CAP) and HubSpot were the top revenue earners of late.

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Shares fade after strong start; AXON, halozyme and UTHR in focus

The stock market opened solidly higher on Wednesday, but gains faded and turned to losses. Nvidia (NVDA) helped lead the downward turnaround, after mixed results, guidance and commentary from the AI ​​server maker Super microcomputer (SMCI).

Other stocks in the Magnificent Seven fell in gains or retreated lower, such as Metaplatforms (META), Apple (AAPL), Microsoft (MSFT), Tesla (TSLA) and debatable Amazon.com (AMZN) was met with resistance at key levels.

The attempted rally in the stock market is still ongoing, but it was not a good sign.

Dow Jones futures today

Dow Jones futures were flat versus fair value. Futures on the S&P 500 rose 0.1%. Nasdaq 100 futures rose 0.3%.

The yield on ten-year government bonds fell to 3.92%.

At 8:30 a.m. ET, the Labor Department will release weekly unemployment claims. They could indicate whether July’s weak jobs report reflected short-term weather effects.

Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.

Nvidia stock is on Scoreboard. Microsoft stock is listed at IBD Long-Term Leaders.

Main income

McKesson (MCK), AppLovin (APP), HubSpot (HUBS), Dutch Brothers (BRITTLE) and Robinhood reported on Wednesday evening.

HubSpot rose on earnings, while Dutch Bros shares plummeted. McKesson shares, which arguably closed within the buy range, fell sharply.

AppLovin, which initially plummeted late, turned slightly higher. Shares of Robinhood rose modestly in up-and-down trading.

early Thursday, Shark Ninja (S.N) And Eli Lilly (LLY) are on tap.

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Attempted stock market rally fails

The stock market rally returned lower after a strong open. The Dow Jones Industrial Average fell 0.6% in stock trading on Wednesday. The S&P 500 index fell 0.8%. The Nasdaq composite fell 1.05%. The small-cap Russell 2000 fell 1.4%.

The Dow Jones and Russell 2000 once again encountered resistance at the 50-day line. This also applied to the Invesco S&P 500 Equal Weight ETF (RSP), which ultimately fell 0.7%.

The first Trust Nasdaq 100 equal-weighted index ETF (QQEW) fell back from the 200-day line, falling 0.7%.

Wednesday was the second day of an attempted rally in the stock market. The rally is intact until the major indexes undercut their Monday lows, but Wednesday’s downward reversal was not encouraging.

While there are profit winners, including Fortinet (FTNT), Shopify (STORE), Axon company (AXON) And Exelixis (EXEL), there were many profit losers, especially Super Micro and Airbnb (ABNB).

US crude oil prices rose 2.8% to $75.23 per barrel.

The yield on ten-year government bonds fell by eight basis points to 3.97%.

ETFs

Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) fell by 1.6%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.2%, with Microsoft shares a major component. The VanEck Vectors Semiconductor ETF (SMH) fell 2.75%, with Nvidia shares the dominant holding.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 1.8% and ARK Genomics ETF (ARKG) fell by 2.5%. Tesla stock is still a notable stock in Ark Invest’s ETFs. Cathie Wood’s Ark also owns some HOOD stock.

SPDR S&P Metals & Mining ETF (XME) gave up 1.2%. SPDR S&P Home Builders ETF (XHB) lost 2.6%. The Energy Select SPDR ETF (XLE) rose by 0.4%. The Healthcare Select Sector SPDR fund (XLV) lost 1%. Eli Lilly stock is No. 1 in XLV, which also includes McKesson.

The Industrial Select Sector SPDR fund (XLI) lost 0.5%. The Financial Select SPDR ETF (XLF) rose by 0.1%.

Time the market with IBD’s ETF market strategy

Beautiful Seven Stock Battle

Nvidia shares rose 4.4% Wednesday morning, but ended down 5.1% to 98.95 on an ugly, downside, external reversal day. It was the lowest closing price since May 22, just before the earnings gap broke out.

Nvidia ally Super Micro missed earnings and posted low earnings per share, but gave bullish revenue targets. Super Micro also indicated in its earnings call that Nvidia won’t begin meaningful shipments of next-generation Blackwell AI chips until early 2025, following recent reports of production delays at Blackwell. SMCI shares fell 20% on Wednesday.

Shares of Apple rose 1.3% to 209.86, but hit resistance at the rising 50-day line.

Meta shares fell just over 1% to 488.92, falling again around the 50-day line.

Shares of Tesla fell 4.4% to 191.82, hitting resistance again at the 200-day line after falling below that key level on Monday. TSLA stock has reversed its massive run from late June to early July.

Shares of Microsoft fell 0.3% to 398.43, failing to close above the 200-day mark for the second straight time after topping intraday.

Amazon shares rose 0.55% to 162.82, but retreated from the 200-day mark.

Shares of Google rose 0.4% to 158.94, modestly above the 200-day line but well below the 50-day line.

While Magnificent 7 stumbles, ‘S&P 493’ does so for the first time since 2022

Analysis of the market rally

Wednesday was a good example of why investors shouldn’t rush into a market at the first uptick. Tuesday marked the start of an attempted rally in the stock market, albeit with a fade in the final hour. On Wednesday, a strong opening quickly turned into losses for major indexes and stocks.

Perhaps the rally attempt will quickly regain momentum, or perhaps the market will retreat or go sideways for several weeks or months.

Don’t try to guess when a new upmarket trend will happen. The key is to be ready when that eventually happens. Continue working on watchlists, focusing on raw talent – ​​relative strength – versus polished charts.

Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.

Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.

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