Dow futures rose slightly Thursday morning, while S&P 500 and Nasdaq futures rose strongly with NVDA jumping on the results. the nvidia (NVDAThe earnings report has major implications for other chip and artificial intelligence stocks, as well as an emerging market rally bid. snowflake (snow), Splunk (SPLK) And NetApp (NTAP) as reported on Wednesday night.
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The stock market rally continued on Wednesday ahead of the results, with its breadth improving. Treasury yields fell sharply amid some weaker economic data as well as disappointing results or guidance from more retail and consumer operations.
The market is gaining some momentum but it has not yet confirmed its attempt to go higher.
Nvidia stock rose strongly overnight thanks to earnings. SPLK and Snowflake were also winners, while NetApp was slightly lower.
Meanwhile, a slew of AI-related names also moved slightly to strong on Nvidia’s earnings. Some could provide buy signals on Thursday.
These include chip makers from Broadcom (Avgo) And Marvell technology (Morley) to software makers such as service now (now), Adobe (ADBE), Palantir Technologies (PLTR), C3. ai (Amnesty International) And samsara (The Internet of things) as well as the server maker Super microcomputer (SMCI). Don’t forget Megacaps like Microsoft (MSFT), Meta platforms (meta) and the parent of Google the alphabet (Google).
in other news, Boeing (Bachelor’s) I found a new manufacturing problem in the 737 MAX that may have resulted in hundreds of improperly drilled holes. It is the job of the supplier Soul Aviation Systems (SPR). Boeing says it has a solution. Deliveries may be delayed in the near term, but the issue is said to not affect operating Max aircraft. BA fell modestly, testing a buy point and the 50-day line. Aero’s soul landed.
NVDA stocks and Meta in action IBD Leaderboard. Microsoft stock is listed on the IBD Long-Term Leaders List. ADBE and ServiceNow stocks are on BD 50. Google, Meta, and ServiceNow stocks are in IBD Big Cap 20.
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Dow futures were 0.2% above fair value, and Boeing stock was a drag. S&P 500 futures rose 0.8% while Nasdaq 100 futures jumped 1.4%. Nvidia stock is a major constituent of the Nasdaq 100 and S&P 500, along with the likes of Broadcom, ServiceNow, Adobe, Microsoft, Meta, and Google.
Futures indicate that the S&P 500 and Nasdaq may test their 50-day lines at the open on Thursday.
Remember that an overnight move in Dow futures and elsewhere does not necessarily translate into an actual trade in the next regular stock market session.
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stock market rally
An attempted rally in the stock market saw a strong session heading into Nvidia’s earnings, led by the tech giants.
The Dow Jones Industrial Average rose 0.5% in stock market trading on Wednesday. The S&P 500 rose 1%. The Nasdaq Composite Index jumped 1.6%. Russell 2000 junior stock rose 1%.
US crude oil prices fell 0.9% to $78.89 a barrel, down 2.9% so far this week.
Copper futures rose 1.4%, now up 4.2% for five consecutive sessions.
The yield on the 10-year Treasury fell 13 basis points to 4.2%, off a 15-year high. Weaker-than-expected economic data, and a downward revision to job growth in the 12 months through March, could ease pressure on Federal Reserve Chairman Jerome Powell ahead of his big Jackson Hole speech on Friday morning.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) by 1.3%. iShares Expanded Software Technology Fund (ETF)IGV) by 1.6%. VanEck Vectors Semiconductor Corporation (Trait) figured 2.2%. NVDA stock is the #1 stock in SMH.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(ahead of 2.3%) and the ARK Genomics ETF (kick back) 2.1%.
SPDR S&P Metals & Mining ETF (XME) by 0.1% and the Global X US Infrastructure Development ETF (cradlerose 1%. US Global Gates Foundation ETF (Planes) increased by 0.6%. SPDR S&P Homebuilders ETF (XHB) rose 2.1%. Energy Defined Fund SPDR ETF (xle(Down by 0.25% and the SPDR Healthcare Sector Fund)XLV) by 0.3%.
SPDR Industry Selection Fund (XLI) rebounded by 1%.
SPDR Financial Selection Fund (45) advanced 1%. SPDR S&P Regional Banking ETF (Creates) increased by 1.3%.
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Nvidia earnings
Nvidia’s earnings easily outpace views, thanks to the growing demand for data centers, reflecting the massive boom in artificial intelligence. The chip giant also rose during the current third quarter and announced a $25 billion buyback of NVDA shares.
Expectations were very high for Nvidia’s results.
Nvidia stock rose strongly in overnight trading, although it rebounded from Wednesday night’s highs, pointing to a record high.
Shares rose 3.2% to 471.16 points in Wednesday’s regular session. Nvidia stock reached a record intraday high of 481.87 on Tuesday, briefly surpassing the short consolidation, but closed down 2.8%, at 456.68. This is after rising by 8.5% on Monday, which triggered buy signals. The RSI line, the blue line in the provided charts, reached a new high on Monday.
AI stock reaction
Chipmakers Broadcom and Marvell stocks rose strongly in late trading. AVGO and MRVL rose modestly on Wednesday to their roughly 50-day moving averages. AI chip plays could provide buy signals, but Marvell’s earnings are due Thursday night, with Broadcom on Aug. 31.
Shares of software giants ServiceNow and Adobe rose in the after-hours move. On Wednesday, NOW stock rose slightly, crossing the 50-day line and breaking the trend line. ADBE stock rose modestly from its 21-day line during a short consolidation period. Adobe and ServiceNow both have established AI partnerships with Nvidia.
Among the most volatile AI software, PLTR stocks, AI stocks, and IOT stocks rose strongly in late trading. All three stocks are up 4%-5% on Wednesday, but well below their 50-day lines.
Earnings from Snowflake and Splunk Wednesday night could also affect software makers, along with artificial intelligence leader Nvidia.
SMCI stock emerged in an extended move. Super Micro stock jumped 7.6%, regaining the 50-day streak after a big sell-off in earnings this month.
As for the big companies, MSFT rose modestly during overnight trading, indicating a possible test of the 50-day line. Microsoft shares rose 1.4% on Wednesday, regaining the 21-day streak. META stock rose modestly of late, which could herald a strong entry, after rising 2.3% to close within 50 days.
Google stock rose slightly in extended trade. Shares rose 2.55% on Wednesday, inside buy territory, while also clearing out an alternative entry. The internet giant has announced upcoming security improvements for Gmail and other Google Workspace products, some of which will use artificial intelligence.
All three are major buyers of Nvidia AI chips.
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Other major earnings
SNOW stock rose strongly in volatile after-hours trading. Snowflake earnings topped views while the data analytics software maker was riding a straight line. Snowflake stock rose 2% to 155.70 on Wednesday, just regaining its 200-day line.
SPLK stock rose overnight, indicating a bounce above the 50-day line after Splunk’s earnings handily outpaced views and outpaced revenue as well. The database and security software maker is guided by the above. Splunk stock advanced 1.8% to 99.93 on Wednesday. The stock has a flat-bottomed 112.03 buy points.
NTAP stock fell slightly in extended trading after NetApp earnings slightly beat the financial outlook in the first quarter. The data warehousing giant is headed in line for the second quarter. NetApp stock rose 2 cents on Wednesday to 76.53, just below the 50-day line. NTAP stock was on its way to a flat base after this week.
NetApp competitor pure storage (PSTG), which will be announced next week, was slightly higher in late trading. PSTG stock is already showing an early entry from the 50 day line inside its flat base.
Market rally analysis
An attempt to rally in the stock market made a strong move. Market breadth was strong on Wednesday, after losers outperformed winners in the previous two sessions.
The market rally still needs a follow-up day to confirm the upside. Nasdaq price gains were strong enough to qualify for the FTD, but volume was just below Tuesday’s level. The S&P 500 had more volume but its strong price gains weren’t quite enough to meet the FTD criteria.
However, as Wednesday progresses, if the market does stage a follow-up day from these levels, it is very likely that the major indices will reclaim the 50-day line in the process.
Many tech names launched aggressive signals on Wednesday, but Nvidia’s earnings made that too risky.
The energy sector continues to look strong, along with the housing, industry, construction and steel sectors to some extent, along with some medical sectors. Banks and consumer plays are generally struggling.
Fed Chair Powell’s speech Friday morning is likely to send stocks and Treasury yields swinging.
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What are you doing now
The attempt to rally in the stock market looks promising, but we are in the “engaged” step.
Investors can try to take advantage of potential buying opportunities, but it is a good idea to wait a few minutes or more after the open. The Nvidia-led AI crowd could gain momentum Thursday, or it could fizzle out.
Add exposure gradually, to reduce the risk of the market cutting gains or reversing down on any given day.
Prepare your watchlists, and don’t just think of names for technological growth.
Read the big picture every day to stay on top of the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson For stock market updates and more.
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