Dow Jones futures rose early Thursday, while S&P 500 futures and Nasdaq futures fell. Treasury yields moved higher. Meta Platforms plunged on earnings, though its spending splurge lifted several big tech suppliers.
Apple stock and Amazon.com are on deck Thursday night.
The stock market rally had big intraday swings Wednesday, but the major indexes ultimately closed near session lows. The Nasdaq fell sharply on Microsoft and Google earnings.
Some more stocks flashed buy signals, including Enphase Energy, Wingstop and Rollins.
Separately, Tesla reportedly faces a criminal probe over its self-driving claims.
Earnings
Facebook parent Meta Platforms, Wolfspeed, Ford Motor, Impinj, Molina Health, Aspen Technology and ServiceNow reported after the close.
Meta stock tumbled on weak earnings and guidance. But Meta's massive spending plans buoyed several chip and networking firms, including Nvidia and Arista Networks.
WOLF stock plunged on its guidance. Aspen Technology, ServiceNow and PI stock were big earnings winners, Molina Health popped. Ford fell slightly. AZPN stock was not yet active.
Merck, Honeywell, Shopify, Mastercard, McDonald's and Caterpillar all topped views, with Merck also raising guidance. CAT stock and Honeywell rose solidly, with Merck, McDonald's and Shopify also higher. Mastercard fell modestly.
All eyes will soon turn to tonight, with Apple on tap, along with Amazon.com and biotech giant Vertex Pharmaceuticals.
Apple stock and Amazon fell back from near their 50-day line Wednesday. VRTX stock is in a buy zone.
Vertex stock and Wingstop are on IBD Leaderboard. WOLF stock is on the Leaderboard watchlist. ENPH stock is on the IBD 50. Vertex, Molina Health and ENPH stock are on the IBD Big Cap 20. Enphase Energy was Wednesday's IBD Stock Of The Day.
The video embedded in this article discussed the market's volatile action and analyzed WING stock, Enphase and Clearfield.
Tesla Criminal Probe
Tesla faces a criminal probe over its self-driving claims, Reuters reported Wednesday. The Justice Department probe started last year and is not close to reaching any conclusions, according to the report. The criminal probe comes amid an ongoing, expanding Autopilot probe by the National Highway Traffic Safety Administration.
The new criminal probe didn't seem to affect TSLA stock. Shares closed up 1% to 224.64, off session highs as the market faded from late-morning peaks.
Meanwhile, Tesla CEO Elon Musk dropped by Twitter headquarters and changed his Twitter bio to "Chief Twit" with all signs pointing to his $44 billion takeover closing by Friday evening. TWTR stock rose 1.2% on Wednesday to 53.42, up 7% so far this week and just below the $54.20 price tag.
Twitter stock rose 1% to 53.90 overnight, as the NYSE said TWTR would be delisted at Friday's close.
It's unclear if Musk still has to sell more Tesla stock to finance the Twitter takeover.
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Dow Jones Futures Today
Dow Jones futures rose 0.7% vs. fair value, with CAT stock, MRK, Honeywell and McDonald's helping. S&P 500 futures fell slightly. Nasdaq 100 futures sank 0.5%, as Meta plunged while NOW soared.
The 10-year Treasury yield rose 5 basis points to 4.06%.
The European Central Bank hiked rates by 75 basis points, as expected.
Chinese cities are stepping up restrictions amid rising Covid cases. U.S.-listed Chinese stocks were pointed lower.
At 8:30 a.m. ET, the Commerce Department will release its first estimate for third-quarter GDP. Economists expect a 2.3% annualized gain after slim declines in the prior two quarters. September durable goods orders and weekly jobless claims also will be released at that time.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally had big swings Wednesday, closing mixed.
The Dow Jones Industrial Average closed up 2 points in Wednesday's stock market trading, even with MSFT stock down 7% and Boeing off 9%. The S&P 500 index fell 0.7%. The Nasdaq composite skidded 2%. The small-cap Russell 2000 rose 0.5%.
The 10-year Treasury yield tumbled 10 basis points to 4.01%, continuing a sharp retreat from last Friday's intraday highs. The 10-year Treasury yield is below the 3-month yield, which dipped to 4.03% on Wednesday. The 3-month/10-year inversion is seen as a stronger recession signal than 2-year/10-year inversion.
The Bank of Canada raised rates by 50 basis points vs. the expected 75 basis points as more central banks start to get less aggressive. The Federal Reserve is a virtual lock to hike rates by 75 basis points for a fourth straight meeting next week. But markets are leaning toward a 50-basis-point move in December.
The U.S. dollar fell solidly for a second session.
U.S. crude oil prices rose 3% to $87.91 a barrel.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF edged up 0.2%. The iShares Expanded Tech-Software Sector ETF fell 1.75%, with Microsoft stock a huge component and ServiceNow also a notable holding. The VanEck Vectors Semiconductor ETF gave up 1%.
SPDR S&P Metals & Mining ETF advanced 1.1%. The Energy Select SPDR ETF rose 1.4%. The Health Care Select Sector SPDR Fund climbed 1.1%.
Reflecting more-speculative story stocks, ARK Innovation ETF edged up 0.2% and ARK Genomics ETF climbed 2.8%. Tesla stock remains a major holding across Ark Invest's ETFs.
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Key Earnings
Meta Platforms earnings were noticeably below Q3 views, though revenue topped. The Facebook parent also gave weak guidance.
Meta stock plummeted 24% before Thursday's open, signaling a plunge to the worst levels since late 2016. Shares already skidded 5.6% to 129.82 on Wednesday following Google's earnings miss on weak online ad revenue. That followed weak revenue from Snapchat parent Snap earlier this month.
On the plus side, Nvidia, Marvell Technology and ANET stock rose on Facebook's huge spending splurge.
Wolfspeed reported a quarterly loss and sales that slightly topped views. The EV-exposed chipmaker gave disappointing guidance.
WOLF stock crashed 27% in premarket trade, signaling a plunge below recent lows and the 200-day moving average. Shares rose 1.3% on Wednesday to 106.44, hitting resistance at the 50-day line. WOLF stock has been close to having a proper base.
Impinj earnings crushed views, with the tracking-chip maker also topping sales estimates.
PI stock surged 18% overnight, signaling a gap above a 99.10 consolidation buy point. Impinj stock rose 1.3% to 89.23 on Wednesday, holding above its 50-day line.
Ford earnings and revenue were largely in line with lowered views after the automaker warned last month on supply-chain woes and costs. Ford stock fell 2% in extended action. Shares dipped 0.1% to 12.82 on Wednesday. Ford stock is working on a 16.78 buy point from a bottoming base, according to MarketSmith analysis, but is still below the 50-day and 200-day moving averages.
Molina Health earnings modestly topped views. MOH stock rose 5% in overnight trade. Shares edged up 0.8% on Wednesday to 369.23, rising in a buy zone from a flat base. The flat base, part of a base-on-base formation, has a 361.35 buy point. Molina stock is set to open beyond the 5% buy zone, which ends at 379.42.
Aspen Technology earnings crushed views, with revenue also topping. AZPN stock was not yet trading in extended action. Shares of the supply-chain and engineering software maker fell 1.7% to 248.40 on Wednesday, but found support at its rising 21-day moving average. AZPN stock has been consolidating for a few weeks after a strong run, but needs more time to forge a proper base.
ServiceNow earnings topped but revenue fell short and the business software giant cut Q4 subscription revenue targets. However, NOW stock surged 15% before the open, signaling at least a test of a falling 50-day line. ServiceNow stock fell 2.7% to 366.41 on Wednesday on Microsoft results and guidance.
Market Rally Analysis
Wednesday was a strange day for the stock market rally. The Nasdaq tumbled at the open on Microsoft and Google earnings. The tech-heavy index erased losses by late morning, but then stocks faded back toward session lows. The S&P 500, which moved above its 50-day line intraday, fell back.
Nasdaq, after falling back from near its 50-day line, now needs support near the 21-day line.
The Russell 2000, though it closed well off highs, did move its 50-day line, reflecting how the market weakness was heavily concentrated in the megacaps. Microsoft and Google parent Alphabet were the main offenders, but Meta, Amazon and Apple were significant losers as well.
The Invesco S&P 500 Equal Weight ETF rose 0.2%, though closing near session lows.
Advancers outpaced decliners on the NYSE and Nasdaq. New highs exceeded new lows.
Wednesday's pullback from key technical areas on bad news isn't that surprising. What matters is how the market rally responds from here.
A huge amount of earnings, including Apple stock and Vertex, are still due this week, with a heavy load next week. Also next week: Another Fed meeting and rate hike, along with the October jobs report and other key economic data.
On the plus side, leading stocks from a variety of sectors are flashing buy signals and extending gains, including ENPH stock.
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What To Do Now
Wednesday's roller-coaster session, closing near lows, underscores the need for caution.
Investors should have been gradually adding exposure in recent days as the market rally gained strength and more stocks flashed buy signals. But rushing into new positions risks loading up right at intraday highs, or before a more significant pullback.
While there are reasons to be hopeful, plenty of technical hurdles and macroeconomic challenges remain.
Look for new opportunities by working on your watchlists. But be ready to scale back out if the uptrend or your stocks run into trouble.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
