Dow Jones futures and S&P 500 futures fell slightly early Thursday while Nasdaq futures edged higher.
The Federal Reserve meeting will conclude Wednesday afternoon but the attention will quickly turn to Tesla, Meta Platforms, Microsoft and ServiceNow, due Wednesday night.
The stock market rebounded Tuesday, with the Nasdaq leading after Monday's AI-led losses. AI hardware stocks bounced after plunging Monday on DeepSeek fears.
Nvidia leapt 8.8%, reclaiming the 200-day line, but that's after diving 17% Monday. Many of Monday's big losers regained just a small fraction Tuesday.
Meanwhile, many software stocks that may thrive from cheaper AI flashed buy signals Tuesday. They included ServiceNow stock, Shopify, CrowdStrike, HubSpot and Fortinet. Also Rubrik, Snowflake, Datadog, Workday and Confluent.
Several non-AI firms such as Royal Caribbean, Sea and Axon Enterprise flashed buy signals.
The video embedded in the article reviews Tuesday's market action and analyzes Royal Caribbean stock, Axon Enterprise and Shopify.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures lost 0.2% and Nasdaq 100 futures rose 0.1%.
The 10-year Treasury yield dipped to 4.52%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Earnings
After the close, Starbucks and F5 Networks reported better-than-expected earnings. SBUX stock rose solidly before the open, signaling a breakout. FFIV stock skyrocketed.
Before the open, Chili's parent Brinker International surged to a new high after an easy earnings beat. ASML jumped early Thursday on strong earnings and bookings for the Dutch chip-equipment giant.
T-Mobile US rallied on results, signaling a possible early entry. Corning popped on mixed results and upbeat guidance, signaling a move out a buy zone.
Federal Reserve Meeting
The Fed meeting concludes with a 2 p.m. ET announcement and a 2:30 p.m. ET news conference by Fed chief Jerome Powell. Policymakers are set to take no action after cutting rates in the prior three meetings. Will Powell hint at how long the Fed might pause? Will he touch on President Donald Trump?
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Stock Market Rally
Tuesday the stock market rally had a strong session. The Dow Jones Industrial Average rose 0.3% in Tuesday's stock market trading, nearly hitting a record high. The S&P 500 index bounced 0.9%, rebounding from the 50-day line. The Nasdaq composite jumped 2%, back above the 50-day. And the small-cap Russell 2000 climbed 0.2%.
The Invesco S&P 500 Equal Weight ETF fell 0.5% after edging up 0.1% on Monday.
The First Trust Nasdaq 100 Equal Weighted Index ETF rose just 0.2%, greatly lagging the Nasdaq, but that's after Monday's relatively modest 1.3% decline.
U.S. crude oil prices rose 0.8% to $73.77 a barrel.
The 10-year Treasury yield rose two basis points to 4.55%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF gained 2.7%. The iShares Expanded Tech-Software Sector ETF rallied 2.7%, with Microsoft, ServiceNow, HubSpot, CrowdStrike, Datadog, Confluent and Workday all key members. The VanEck Vectors Semiconductor ETF popped 2% after diving 9.8% on Monday. Nvidia stock is a major holding.
ARK Innovation ETF advanced 2% and ARK Genomics ETF climbed 0.4%. Tesla stock is the No. 1 holding across Ark Invest.
SPDR S&P Metals & Mining ETF rose 0.4%. The Energy Select SPDR ETF retreated 0.95%. Meanwhile, the Health Care Select Sector SPDR Fund and the Industrial Select Sector SPDR Fund declined 0.7%. The Financial Select SPDR ETF gave up 0.2%.
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AI Stock Winners In DeepSeek Paradigm Shift
AI hardware stocks — and a slew of related groups — crashed Monday in the wake of China startup DeepSeek releasing a strong AI model that it claims cost less than $6 million to build. In other words, AI compute costs are set to get a lot lower. While potentially negative for the likes of Nvidia, Vistra and more, that would be great for software makers that use AI.
ServiceNow, HubSpot, CrowdStrike, Shopify and Snowflake stock broke out Tuesday. Rubrik, Datadog, Workday and Confluent flashed early buy signals.
Keep in mind that ServiceNow earnings are due Wednesday, with many other software makers and tech titans over the next couple weeks.
Also, if markets decide that DeepSeek news isn't true, or largely untrue, that could send Nvidia stock and hardware plays sharply higher, while software stocks tumble back.
DeepSeek AI Is 'Good News' For Enterprise Software, Says SAP CEO
Microsoft, Meta, Tesla Earnings On Tap
Wednesday night Microsoft, Meta and Tesla report.
Microsoft and Meta's earnings and guidance are hugely important for the tech sector, though Meta already guided for big capital spending growth. What they have to say about DeepSeek will be huge news.
Microsoft stock rose 2.9% to 447.05 on Tuesday. Shares are in a base going back to early July, with a 468.35 buy point. But investors could see a cup base within the larger consolidation offering a 456.16 buy point. MSFT stock crossed a 447.27 early entry on Tuesday.
Meta stock gained 2.2% to 674.33. It's now extended from a flat base, riding a seven-day win streak.
Tesla stock tested its 50-day line again on Tuesday, but ultimately edged up 0.2% to 398.10. TSLA stock is in a base with a 488.54 buy point, according to MarketSurge. A strong post-earnings move above the 50-day and 21-day lines could offer an aggressive entry. The Elon Musk-led earnings call will be the focus, as usual.
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What To Do Now
The stock market rally showed real strength Tuesday after so many leaders cratered Monday. But many of the big AI winners from the past two years might take a long time to recover. A new wave of stocks betting on cheap AI are stepping up, but will that DeepSeek story hold up?
Investors can try some buying opportunities, adding new exposure gradually. But, as Monday showed, you don't want to be too concentrated in a particular group or theme.
Earnings season kicks into high gear starting Wednesday with Tesla, Meta, Microsoft and ServiceNow, and will remain heavy for at least the next couple of weeks. Meanwhile, the Fed meeting and Fed chief Powell could surprise.
It's crucial to be engaged with the market, flexible and ready to act. That means doing your homework, revising watchlists considerably and having your game plan for offense and defense up to date.
Stocks On Key IBD Lists
Meta stock, ServiceNow, HubSpot and Shopify are on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Royal Caribbean, Sea and Snowflake stock are on SwingTrader. Microsoft stock is on IBD Long-Term Leaders, with ServiceNow on the LTL watchlist. ServiceNow, HubSpot, Meta, CrowdStrike stock are on the IBD 50. ServiceNow and HubSpot stock are on the IBD Big Cap 20. Axon, ServiceNow and HubSpot stock are on IBD Sector Leaders.
Royal Caribbean was Tuesday's IBD Stock Of The Day.
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