Dow Jones futures and S&P 500 futures fell modestly early Thursday, while Nasdaq futures rose slightly as President Donald Trump made new tariff comments late Wednesday. ServiceNow, IBM, Chipotle Mexican Grill headlined earnings after the close.
The stock market rally powered higher Wednesday morning after Tuesday's follow-through day but closed well off highs and below a key level, buoyed President Trump's comments on China tariffs and the Federal Reserve.
Palantir Technologies and GeneDx Holdings flashed buy signals Wednesday, up 7.3% and 9.1%, respectively. Many others flirted with entries intraday, while many more made progress.
Investors could be looking to add exposure, gradually. But there are reasons to be cautious.
GeneDx stock and Palantir are on IBD 50. Palantir stock is on the IBD Big Cap 20.
Trump On Tariffs, Powell
President Donald Trump late Tuesday said he expects China tariffs to fall substantially and he won't play "hardball" with Beijing. He also said he wouldn't fire Fed chief Jerome Powell. Treasury Secretary Scott Bessent, who helped fuel Tuesday's advance, said Wednesday that there's a big "opportunity" for a U.S.-China trade deal, though a full agreement could take years.
Wednesday night, President Trump said he will set new tariff rates on China in two to three weeks, but he also said if there's no China deal, it's "OK." Meanwhile, Trump said he is not considering changes to auto tariffs, but added that he could raise auto tariffs on Canada. That came after the White House said the president is considering exempting automakers from certain tariffs, following a Financial Times report.
On Thursday, Beijing said Trump should "remove all unilateral tariffs imposed on China" and denied trade talks were happening.
Dow Jones Futures Today
Dow Jones futures fell 0.45% vs. fair value. S&P 500 futures declined 0.2% and Nasdaq 100 futures edged higher.
The 10-year Treasury yield declined to 4.35%.
Crude oil futures rose 1%.
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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Key Earnings
ServiceNow, IBM, Chipotle, Texas Instruments, Penumbra reported Wednesday night.
ServiceNow stock jumped on earnings while Texas Instruments and Penumbra rose solidly. PEN stock could top a 290.94 double-bottom buy point on Thursday.
IBM stock and Chipotle fell on results, with the burrito chain reporting its first same-store decline since 2020.
Stock Market Rally
The stock market rally jumped at the open after Trump retreated on trade and the Fed. The major indexes closed substantially higher despite ending near session lows.
The Dow Jones Industrial Average advanced 1.1% in Wednesday's stock market trading. The S&P 500 index gained 1.7%. The Nasdaq composite jumped 2.5%. The small-cap Russell 2000 popped 1.5%.
The major indexes opened above the 21-day moving average, but closed below that key level, which has acted as resistance in recent weeks.
It's not great to see market gains fade below the 21-day line. But the indexes did have a solid advance and have moved a lot from Monday's intraday lows.
A pause around current levels could be constructive, letting more stocks catch up or forge handles. But a close below the lows of Tuesday's FTD would be highly bearish.
Tesla jumped 5.3% Wednesday despite grim Q1 earnings as Elon Musk still sees a robotaxi launch in June. Other Magnificent Seven stocks had solid to strong gains as well Wednesday. But Tesla stock and the other megacaps remain in downtrends, below key levels.
A number of growth and defensive growth stocks are acting well.
U.S. crude oil prices rose 2.2% to $62.27 a barrel.
The 10-year Treasury yield was little changed at 4.385%, but came well off intraday lows of 4.26%.
Trump's Retreat Vs. The Fed, China Is Fueling The S&P 500. The Hard Part Comes Next.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF climbed 0.9%. The iShares Expanded Tech-Software Sector ETF popped 3.2%, with ServiceNow stock and Palantir both big holdings. The VanEck Vectors Semiconductor ETF leaped 3.7%, with Texas Instruments stock a member.
ARK Innovation ETF jumped 3.9% and ARK Genomics ETF gained 2.2%. Tesla stock is the No. 1 holding across ARK Invest's ETFs. Cathie Wood's ARK also owns a lot of PLTR stock.
SPDR S&P Metals & Mining ETF rallied 2.4%. The Energy Select SPDR ETF dipped 0.2% and the Health Care Select Sector SPDR Fund rose 0.5%.
The Industrial Select Sector SPDR Fund bounced 1.2% and the Financial Select SPDR ETF advanced 1.1%.
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What To Do Now
The stock market rally continued to make progress Wednesday, as Trump tariff headlines were a tailwind for a second straight session. That could change in an instant.
Investors should looking for buying opportunities, but in this market being choosy and incremental is key. Those who bought Wednesday morning could easily be sitting on modest losses.
If you're quick to buy into a market rally, especially in stocks with high average true ranges such as Palantir, you have to be ready to exit even faster.
Have your watchlists ready. A few good market days can do wonders for leading stocks, though many of them need more time.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
