Dow Jones futures rose early Thursday, along with S&P 500 futures and especially Nasdaq futures, as Treasury yields kept falling. Roku and MercadoLibre were among a slew of earnings Wednesday night, with Palantir Technologies, Eli Lilly reporting before the open and Apple after the close.
The stock market rally attempt had solid gains Wednesday, especially on the Nasdaq. The Federal Reserve left interest rates unchanged, as expected. Fed chief Jerome Powell signaled that policymakers will remain on hold, downplaying the "efficacy" of the Fed's September forecast for one more rate hike this year.
The 10-year Treasury yield fell several basis points on Wednesday, mostly on mixed-to-weak economic data.
Microsoft, Meta Platforms and Amazon.com flashed buy signals, at least intraday.
Earnings
MercadoLibre jumped above the 50-day line just before the close as some earnings data leaked a few minutes early. After the close, the Latin American e-commerce and payments giant reported a 180% EPS gain and 41% revenue rise, both showing accelerating growth and easily beating. MELI stock rose modestly in premarket trade. That added to Wednesday's solid 4.8% gain. It could have an early entry Thursday.
Super Micro Computer, Remity Global, McKesson, Roku, DoorDash, ELF Beauty and Airbnb reported Wednesday night.
Before Thursday's open, weight-loss drug giants Novo Nordisk and Eli Lilly reported, along with PLTR stock, Shopify, Regeneron Pharmaceuticals, McKesson rival Cencora and Marriott Worldwide.
Winners: Roku, ELF, PLTR, SHOP, SMCI and DASH stock were big earnings winners in premarket trading, signaling moves back to or above key level. NVO stock rose slightly on solid results and raised guidance.
Losers: RELY stock, which had been right around record highs, plunged on a surprise EPS miss. ABNB stock, Marriott and McKesson stock fell modestly. MCK stock had closed near the top of a buy zone.
ABNB stock and LLY stock were little changed. Eli Lilly reported a surprise profit but slashed earnings guidance, mostly on acquired in-process R&D
Regeneron and Cencora beat views, but were not active yet.
Apple heads results Thursday night. AAPL stock edged higher Wednesday, topping its 200-day line, but needs to clear its 50-day line decisively to break a downtrend.
Meta, Microsoft and LLY stock are on IBD Leaderboard, with AMZN stock on the Leaderboard watchlist. META stock is on SwingTrader. MSFT stock is on IBD Long-Term Leaders. NVO stock, Remity, Microsoft and McKesson on the IBD 50 list. Novo Nordisk, Cencora, Meta, Microsoft and MCK stock are on the IBD Big Cap 20.
The video embedded in the article discussed Wednesday's market actin and analyzed Microsoft, Meta and Amazon stock.
Dow Jones Futures Today
Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures climbed 0.7%. Nasdaq 100 futures jumped 1.1%.
The 10-year Treasury yield fell several basis points to 4.69%, extending Wednesday's losses. If that holds in Thursday's session, that wouldn't necessarily break the strong uptrend, but one could at least entertain the idea.
Crude futures rose less than 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Fed Meeting
The Federal Reserve kept its official fed funds rate at a 5.25%-5.5% rate, surprising no one.
The central bank raised its economic assessment, bolstering the case for "higher for longer" rates. But it noted "tighter financial and credit conditions" — a nod to higher Treasury yields — are "likely to weigh on economic activity, hiring and inflation"
Fed chief Powell, who began speaking at 2:30 p.m. ET, continued to stress that policymakers will proceed carefully. He said an economic slowdown is "likely" needed to bring inflation down to moderate levels.
But he suggested that the Fed's September meeting "dot plot" that pointed to one more rate hike this year isn't that relevant today. Powell said "the efficacy of the dot plot decays" as time passes.
The odds of a December rate hike fell to 19.8% vs. 28.8% on Tuesday.
Earlier Wednesday, the ADP Employment Report showed private jobs increased by 113,000 last month, below views, though September job openings came in a little higher than expected. The October ISM manufacturing index unexpectedly sank 2.3 points to 46.7, signaling a faster contraction. Construction spending was in line. All off that comes ahead of the October jobs report on Friday.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The new stock market rally rose solidly Wednesday with Treasury yields falling back. Stocks strengthened from modest gains on Fed chief Jerome Powell.
The Dow Jones Industrial Average rose 0.7% in Wednesday's stock market trading. The S&P 500 index climbed 1.05%. The Nasdaq composite jumped 1.6%. NYSE and Nasdaq exchange volume was higher than Tuesday's trade.
Market breadth was lackluster given the gains on the major indexes.
The small-cap Russell 2000 rose just 0.45%, still close to Friday's three-year low.
The Invesco S&P 500 Equal Weight ETF climbed just 0.3% while the First Trust Nasdaq 100 Equal Weighted Index ETF popped 1%, both lagging their respective indexes. Both are well below their 200-day lines as well.
U.S. crude oil prices erased early gains, falling 0.7% to $80.44 a barrel.
The 10-year Treasury yield sank 8 basis points to 4.79% on Fed chief Powell and the economic data. The two-year Treasury bond yield, more closely tied to Fed policy, tumbled 10 basis points to 4.97%, the lowest in nearly two months.
Wednesday's action was encouraging. The Nasdaq has rebounded from the 200-day line and retaken the 13,000 level. But it remains below the 21-day and especially 50-day line. The S&P 500 is coming right up to the 200-day. The Dow Jones and Russell 2000 well below that key level.
More leading stocks, including tech, energy and some drug-related names, are setting up or flashing buy signals. But broader leadership and breadth remains poor.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF gained 0.8%, with MSFT stock a major holding. The VanEck Vectors Semiconductor ETF jumped 2.5%. Reflecting more-speculative story stocks, ARK Innovation ETF advanced 0.7% and ARK Genomics ETF 0.9%. Roku stock and Shopify are big holdings across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF climbed 0.4%. The SPDR S&P Homebuilders ETF jumped 3.1%. The Energy Select SPDR ETF dipped 0.2% and the Industrial Select Sector SPDR Fund rose 0.3%. The Financial Select SPDR ETF gained 0.65%.
The Health Care Select Sector SPDR Fund nudged 0.2% higher. LLY stock is a major XLV holding, with Regeneron, McKesson and Cencora also in the ETF.
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Tech Titans Flashing Buy Signals
Microsoft stock rose 2.35% to 346.07, topping its Oct. 25 high of 346.20, offering an early entry in the consolidation going back to July. The relative strength line is already at a new high, a bullish sign for MSFT stock. The RS line, the blue line in the charts provided, tracks a stock's performance vs. the S&P 500.
Meta stock climbed 3.5% to 311.85, retaking its 50-day line after tumbling below that key level amid last week's earnings. That offered an early entry.
Amazon stock gained 2.9% to 137, moving decisively above the 50-day line as well as short-term resistance at 134.48. The official buy point is 145.86, but investors could treat the pattern as a short double-bottom with a 134.48 entry.
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What To Do Now
The new market rally is gaining momentum. Some stocks are flashing buy signals while others are moving into position.
Investors could have added some exposure Wednesday afternoon, and could keep doing so if the market makes more progress. But do so gradually. The major indexes have a lot of potential resistance levels. While some stocks are looking interesting, it's not a flood of buying opportunities as breadth remains weak.
But it's definitely a time to be looking for buying opportunities as well as stocks that are moving in position or at least are showing strong relative strength.
Earnings season is still in full swing, so definitely keep that in mind with your positions and potential buys.
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