Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Toll Brothers (TOL) And Urban Outfitters (Urban) reported on Tuesday night, with nvidia (NVDA) big loom.
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The stock market rally was lackluster on Tuesday, with the Dow turning negative and the Nasdaq cutting initial gains. Major indices remain below key levels while the range was once again thin.
The market is still correcting with huge news coming out. Investors should act accordingly.
Nvidia stock reversed lower from the breach on Tuesday after Monday’s strong move.
It’s hard to overstate the importance of Nvidia’s earnings with the market in an uncertain state. Not only will the reaction of Nvidia stock be a big factor for the technology and the broader market, but Nvidia’s earnings and guidance will be of great importance to dozens of companies, from chip makers from Broadcom (AVGO) And Marvell technology (Morley) to software makers such as service now (now) And Adobe (ADBE), in addition to mega maps such as Microsoft (MSFT), Meta platforms (meta) and the parent of Google the alphabet (Google).
Many of these stocks are approaching potential buy signals, but they could also be potential short candidates.
NVDA stocks and Meta in action IBD Leaderboard. Microsoft stock is listed on the IBD Long-Term Leaders List. Google, Meta, and ServiceNow stocks are in IBD Big Cap 20.
The video included in this article reviewed AVGO and ServiceNow inventory Baker Hughes (bkr).
Dow jones futures today
Dow futures rose 0.35% above fair value. S&P 500 futures rose 0.5%, and Nasdaq 100 futures rose 0.6%.
The yield on the 10-year Treasury note fell several basis points to 4.27%.
Crude oil futures fell by 1%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the broader market on IBD Live
earnings
TOL stock rose modestly in pre-market trading after Toll Brothers’ earnings and revenue topped hits in the third quarter, as the luxury homebuilder saw deliveries and higher margins in the third quarter. Shares rose 1.2% to 75.92 on Tuesday, but are still below the 50-day line after falling in the previous four sessions. Toll Brothers stock has a steady-base 83.72 buy, according to MarketSmith’s analysis of the weekly chart.
URBN stock popped up overnight, indicating a pullback above the 50-day moving average. Urban Outfitters’ earnings easily top and sales are slightly ahead. Shares of the youth clothing store fell 4.3% to 34.09 on Tuesday, missing 50 days.
Trying to climb the stock market
The attempt to rally in the stock market got off to a strong start, but soon the indices erased the gains or headed lower.
The Dow Jones Industrial Average fell 0.5% in stock market trading on Tuesday. The S&P 500 fell 0.3%. The Nasdaq Composite Index rose to the upside. Small-cap Russell 2000 sank 0.3%.
Dick’s Sporting Goods (DKS) And Messi (M) led to a decrease in the number of retailers Louie (a little) made an upward movement on its results.
S&P Global has downgraded several regional banks, following a similar move by Moody’s a few weeks ago and a broad bank warning from ratings agency Fitch.
The losers outperformed the gainers again on Tuesday, as the market breadth has been disturbingly weak so far in trying to rally.
Invesco S&P 500 Equal Weight Fund (RSP) fell 0.4%, slightly below the performance of the S&P 500 and just above the 200-day line. On Monday, the RSP lost a bit as the S&P 500 rose 0.7%.
US crude oil prices fell 0.5 percent to $80.35 a barrel. Copper futures rose 1%, or 2.7%, in a four-day winning streak.
The 10-year Treasury yield fell 1 basis point to 4.33%, after hitting a 15-year high of 4.36%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) lost a small part. iShares Expanded Technology and Software ETF (IGV) was down 0.1%, with shares of Microsoft, Adobe and NOW all the big members. VanEck Vectors Semiconductor Corporation (SMH) lost 1%. Nvidia stock is No. 1 SMH holding, with components of AVGO and MRVL as well.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(down 0.2% and ARK Genomics ETF)ARKG) rose higher.
SPDR S&P Metals & Mining ETF (XME(Increased 0.5% and Global Infrastructure Development Fund (ETF) in the USA)cradle) was flat. US Global Gates Foundation ETF (Planes) fell 0.5%. SPDR S&P Homebuilders ETF (XHB) rose 0.3%, with TOL and XHB shares held. Energy Defined Fund SPDR ETF (xle(Sinking 0.8% and the SPDR Healthcare Sector Selection Fund)XLV) decreased by 0.35%.
SPDR Industry Selection Fund (XLI) decreased by 0.2%.
SPDR Financial Selection Fund (45) decreased by 0.9%. SPDR S&P Regional Banking ETF (Creates) decreased by 2.9%.
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Nvidia earnings
Nvidia’s earnings are due Wednesday night, with expectations high. At least seven analysts have upgraded or raised their price targets for NVDA stock in the past several sessions.
Nvidia stock rose to an all-time high of 481.87 on the day, briefly clearing a short consolidation. But shares retreated, falling 2.8% to 456.68. It is still above the 50-day line after rising 8.5% on Tuesday, flashing buy signals. The RSI line, the blue line in the provided charts, reached a new high on Monday.
AI stocks await Nvidia’s results
Meanwhile, AVGO and Marvell stocks are down slightly, both of which are hitting resistance at the 50-day moving average. Marvell’s earnings are due Friday, with Broadcom next week.
NOW stock rose slightly, and also hit the 50-day resistance. ADBE stock fell, extending a short consolidation with support at key levels. Adobe and ServiceNow both have AI partnerships with Nvidia. snowflake (snow) Wednesday night’s earnings may also pay software names, along with leading maker of artificial intelligence chips Nvidia.
MSFT stock remains below the 50-day line after the post-earnings sell-off. META stock is just below this key level, while Google stock is in buy territory. All three are major buyers of Nvidia AI chips.
Stocks near the 50-day lines could offer buy signals with a strong reaction to Nvidia’s earnings. But they may also be potential shortcomings.
Nvidia’s earnings should spur big moves for more speculative names like Palantir Technologies (PLTR) And C3. ai (Amnesty International).
Market rally analysis
Major indices came in from their highs on Tuesday morning to finish mixed, but the overall picture remained unchanged. The market continues to attempt to go higher within the ongoing correction, with a narrow breadth for the time being.
Investors should look for a follow-up day to confirm the rally attempt. It may come as early as Wednesday, but it would be hard to get excited about FTD just moments before Nvidia’s earnings. An FTD after Nvidia’s earnings Wednesday night or Fed Chairman Jerome Powell’s Jackson Hole speech Friday morning seems more plausible.
Also, if Treasury yields and the US dollar continue to rise, it’s hard to see the stock market seeing a sustained rally, especially high-value growth names.
While some technology stocks such as Broadcom and ServiceNow may be built, don’t neglect the energy sector or the various groups associated with construction.
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What are you doing now
Few stocks flash buy signals, and this is probably for the best.
The stock market is still in a correction. This is not the time to be aggressive, especially in the area of technology.
When a market rally shows signs of real strength, then investors can increase their exposure. Nvidia’s earnings or Fed Chairman Powell’s Jackson Hole speech will likely be the positive catalyst confirming a fresh rally. But don’t try to guess how these events will play out or how the market will react.
Definitely get your list of stocks to buy ready to go. You may also want a list of potential shorts.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @tweet For stock market updates and more.
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