Dow Jones futures edged lower early Wednesday while S&P 500 futures and Nasdaq futures fell slightly. All eyes are turning to Nvidia.
Cybersecurity firm SentinelOne, Abercrombie & Fitch and Tesla rivals BYD and Li Auto were notable overnight earnings.
Neurocrine Biosciences plunged 15% before the open. Its experimental schizophrenia drug met Phase 2 trial goals, but didn't do as well as a Bristol-Myers Squibb drug that could win FDA approval soon.
Quiet Tuesday Ahead Of Nvidia
The stock market rally had a relatively quiet session Tuesday, with investors not wanting to make big moves ahead of Nvidia earnings.
The artificial intelligence leader's Wednesday night earnings and guidance will be hugely important for AI stocks such as Broadcom and Nvidia chipmaker Taiwan Semiconductor Manufacturing and the broader market rally. Nvidia stock is just below an early entry, with Broadcom and Taiwan Semi also setting up.
Netflix, Costco Wholesale, GE Vernova and Ardent Health flashed buy signals, at least intraday.
Nvidia stock is on IBD Leaderboard. Netflix and Costco stock are on SwingTrader. Nvidia and Netflix stock are on the IBD 50. Ardent Health was Tuesday's IBD Stock Of The Day.
The video embedded in the article discussed the market action and reviewed Nvidia, Netflix and Ardent stock.
Dow Jones Futures Today
Dow Jones futures were just below fair value. S&P 500 futures dipped about 0.1% and Nasdaq 100 futures fell 0.15%.
The 10-year Treasury yield dipped to 3.81%.
Crude oil fell more than 12%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Warren Buffett's Berkshire Nears $1 Trillion
Meanwhile, Warren Buffett's Berkshire Hathaway continued to advance Tuesday, nearing a $1 trillion market cap. BRKB stock rose 1.6% to 460.63, hitting a record high and arguably just in range from a short consolidation. Berkshire stock now has a $994.5 billion market cap. Berkshire edged higher early Wednesday.
Key Earnings
SentinelOne earnings just edged past views. SentinelOne stock rose slightly early Wednesday after edging down 0.6% on Tuesday to 24.75. The cybersecurity play has a 30.76 official buy point, but 24.80 is an early entry. The report comes a day ahead of larger rival CrowdStrike, which is reeling from sparking a global IT outage on July 19.
Abercrombie & Fitch earnings beat views. The young adult apparel retailer guided higher but wared of an "increasingly uncertain environment." Shares plunged in premarket trade, signaling a move well below the 50-day line. ANF stock climbed 0.9% to 166.61 on Tuesday. Abercrombie has a 172.90 handle buy point.
BYD and Li Auto reported mixed results early Wednesday.
BYD stock was not yet trading Wednesday. Shares rose 1.6% to 29.20 on Tuesday, continuing to hit resistance at the 50-day line, but not far from a 30 buy point.
Li Auto edged higher Wednesday after climbing 2.4% Tuesday, but is far off the 52-week highs from late February. Tesla stock was little changed after falling 1.9% Tuesday.
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Stock Market Rally
The stock market rally remained relatively rangebound Tuesday.
The Dow Jones Industrial Average closed fractionally higher in Tuesday's stock market trading after hitting a record high Monday. The S&P 500 index gained 0.2%, just below record levels. The Nasdaq composite climbed 0.2% after briefly undercutting the 50-day line. The small-cap Russell 2000 fell 0.7%.
The S&P 500 and Nasdaq in particular are pausing, with the latter trading between the 18,000 level and the 50-day line.
U.S. crude oil prices fell 2.4% to $75.53 a barrel.
The 10-year Treasury yield rose about two basis points to 3.83%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF edged up 0.2%. The iShares Expanded Tech-Software Sector ETF advanced 0.3%, with SentinelOne stock a small position. The VanEck Vectors Semiconductor ETF climbed 1%. Nvidia stock is the dominant SMH holding, with Taiwan Semiconductor and Broadcom also key members.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 0.7% and ARK Genomics ETF declined 0.8%. Tesla stock is still a major holding across Ark Invest's ETFs, but Nvidia is now a top-10 holding as well. Cathie Wood's Ark also owns a small stake in BYD.
SPDR S&P Metals & Mining ETF climbed 0.4%. The SPDR S&P Homebuilders ETF retreated 1%. The Energy Select SPDR ETF sank 0.9%. and the Health Care Select Sector SPDR Fund gained 0.15%.
The Industrial Select Sector SPDR Fund rose a fraction. The Financial Select SPDR ETF added 0.5%, with Berkshire stock the No. 1 holding.
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Stocks In Buy Zones
Netflix stock gained 1.1% to 695.72 on Tuesday, flirting with a 697.49 buy point from a shallow cup base. Evercore raised its NFLX stock price target to 750 from 710.
Costco stock climbed 1.8% to 908.64, clearing an 896.67 buy point from a 12%-deep cup base, according to MarketSurge analysis.
Ardent Health stock leapt 6.05% to 18.58, clearing a 17.96 handle buy point from an IPO base. ARDT stock, which came public in July, is part of the red-hot hospitals group.
GE Vernova stock climbed 1.9% to 185.65, just above a 185.50 buy point. The spinoff from the former General Electric tumbled to its 50-day line Friday morning, but slashed losses that day.
Nvidia Stock
Nvidia stock rose 1.5% to 128.30 on Tuesday, near the top of a recent range that could serve as a de facto early entry. The official NVDA stock buy point is 140.76, with 136.15 as another early entry.
Nvidia earnings are the "most important" event for the tech sector in years, according to Wedbush analyst Dan Ives.
Broadcom stock climbed 1.1% to 161.39, reversing higher to retake the 50-day line. AVGO stock has a 185.16 consolidation buy point, but could have a handle entry of 172.42 at Wednesday's close. Broadcom earnings are due next week.
Taiwan Semiconductor stock edged up 0.9% to 170.55. Shares are working on a 175.45 cup-with-handle base. TSM stock is slightly below the 50-day line right now.
Investors likely should wait until after Nvidia earnings to take a new position in NVDA or other AI chip plays, unless using an earnings options strategy.
What To Do Now
Tuesday's stock market action was about ideal. A strong rally or sell-off ahead of Nvidia earnings would have forced tough decisions for investors.
When Nvidia earnings are out, investors need to be ready. Have your watchlists ready for possible buys, and there should be plenty of non-tech names on there. But also be prepared to scale out of positions if Nvidia and Wednesday night's other big results disappoint.
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