Dow Jones futures rose slightly early Friday, with stronger gains for S&P 500 futures and especially Nasdaq futures. Broadcom and Costco Wholesale reported earnings late Thursday.
Broadcom surged overnight on results, signaling a breakout and a $1 trillion valuation. Fellow AI chip play Arm Holdings flashed an aggressive entry Thursday, then added to gains early Friday.
The stock market rally retreated Thursday, with small caps leading the downside. The Nasdaq and S&P 500 are still just below record highs, even with Adobe selling off on weak guidance.
Nvidia edged lower from key levels Thursday. Microsoft is moving toward a buy point. Tesla and most other megacaps were little changed, but generally extended.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Microsoft stock is on IBD Long-Term Leaders. Nvidia stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures climbed 0.4% and Nasdaq 100 futures gained 0.9%. Costco stock and Broadcom are both S&P 500 and Nasdaq 100 members.
The 10-year Treasury yield continued to rise, moving up to 4.35%.
Crude oil futures rose slightly.
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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Broadcom Earnings
Broadcom earnings slightly beat fiscal Q4 views while revenue just missed. The AI chip and software giant gave solid guidance for fiscal Q1 and raised its dividend by 11%. Most importantly, Broadcom expects an AI surge.
Broadcom stock leapt 17% in extended trade. That signals a Friday gap-upwell above a 185.05 buy point from a double-bottom base right next to another consolidation. It would also push Broadcom above a $1 trillion valuation for the first time.
AVGO stock fell 1.4% to 1347.34 on Thursday, with a $843.8 billion market cap.
Nvidia stock advanced 1.5% in premarket trade. Shares declined 1.4% on Thursday to 137.34, pulling back from just below the 50-day line, 140.76 buy point and other key levels.
Taiwan Semiconductor rose 2.5% overnight, signaling a move back above a $1 trillion valuation. Taiwan Semi makes chips for Nvidia, Broadcom and many others. TSM stock stepped back 1.3% to 191.46 on Thursday, just below the 50-day. It now has a 205.63 handle buy point in a consolidation just above a prior base.
Arm Holdings stock climbed more than 3% early Friday. On Thursday, shares popped 3.4% to 148, breaking a long downtrend and flashing an aggressive entry. ARM stock has a 164.16 buy point from a consolidation within a larger range, according to MarketSurge.
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Costco Earnings
Costco earnings beat while sales were roughly in line, beating some estimates and missing others.
COST stock was little changed early Friday. Shares edged down 0.6% to 988.39 on Thursday, just below record highs and modestly extended from a prior base.
Stock Market Rally
The stock market rally saw modest losses on the major indexes and a solid decline among small caps. Adobe stock was a notable earnings loser while a somewhat-hot PPI inflation report helped extend the weekly gain in Treasury yields
The Dow Jones Industrial Average fell 0.5% in Thursday's stock market trading, now clearly below the 21-day line. The S&P 500 index also fell 0.7%. The Nasdaq composite gave up 0.7% after hitting an all-time high Wednesday. The small-cap Russell 2000 slumped 1.4%, knifing through the 21-day.
It was a quiet session for leaders. Tesla stock fell 1.6%, but that snapped a six-session win streak to a record high.
Among super-hot extended names, Palantir Technologies climbed 0.95% and AppLovin sank 3.55%.
Microsoft stock edged up 0.1% 5o 449.56, moving toward a 468.35 consolidation buy point, up 6.2% so far in December as the tech titan tries to rejoin the leadership.
U.S. crude oil prices dipped 0.4% to $70.02 a barrel.
The 10-year Treasury yield rose five basis points to 4.32%, up 17 basis points so far this week. Rebounding Treasury yields are a potential headwind for the market rally, especially growth stocks.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF shed 1.3%. The iShares Expanded Tech-Software Sector ETF gave up 0.9%, with Microsoft, Adobe, Palantir stock and AppLovin all key members. The VanEck Vectors Semiconductor ETF declined 1%. Nvidia is the No. 1 SMH component, but Taiwan Semiconductor stock and Broadcom are also major holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF retreated 1.4% and ARK Genomics ETF tumbled 3.75%. Tesla stock is a massive holding across Ark Invest's ETFs, with Cathie Wood's Ark also building up a big NVDA stake.
SPDR S&P Metals & Mining ETF stepped down 2.3%. SPDR S&P Homebuilders ETF lost 0.95%. The Energy Select SPDR ETF slipped 0.7% and the Health Care Select Sector SPDR Fund shed 0.8%.
The Industrial Select Sector SPDR Fund sank 0.6%. The Financial Select SPDR ETF dropped 0.4%.
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What To Do Now
The stock market rally is still acting well, with the Nasdaq right at record highs. Thursday was a quiet session, with not many stocks flashing new buy signals aside from Arm. Some are in buy range while more are setting up in emerging bases or pullbacks, including Fortinet and Goldman Sachs. Many leaders are simply extended.
Standing pat, assessing your current holdings, working on watchlists and updating watchlists is still the order of the day.
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