Dow Jones futures fell slightly Friday morning, along with S&P 500 futures and Nasdaq futures. The December jobs report is on tap. Tesla, Taiwan Semiconductor and Delta Air Lines were early movers.
The stock market rally was narrowly mixed Wednesday. The Nasdaq held critical support. Nvidia just held key levels after tumbling Tuesday. But Nvidia stock edged lower early Friday as the Biden administration plans to step up chip export curbs again.
Quantum computing stocks such as IonQ and Rigetti Computing dived Wednesday. SoundHound AI and highly speculative nuclear plays such as Oklo also tumbled.
Meanwhile, Palantir Technologies, AppLovin and Astera Labs, three "heat" stocks with strong fundamentals, retreated Wednesday, but came off lows.
Tesla stock edged higher Friday morning as the EV giant unveiled the new Model Y in China.
Nvidia chipmaker Taiwan Semiconductor reported surging December revenue that topped forecasts on Friday.
Delta Air earnings reported strong Q4 earnings and gave good guidance for Q1 and 2025. DAL stock rose strongly within an emerging base. base, signaling a jump above its 50-day line.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Taiwan Semiconductor stock and Nvidia are on the IBD 50. AppLovin and Palantir stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures retreated 0.2% and Nasdaq 100 futures lost 0.2%.
The 10-year Treasury yield edged up to 4.7%.
Crude oil futures leapt 3%.
U.S. stock markets were closed Thursday as a day of mourning for former President Jimmy Carter.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Jobs Report
The Labor Department will release the December jobs report at 8:30 a.m. ET Friday. Economists expect nonfarm payrolls to rise by 157,000 after November's gain of 227,000. The jobless rate should hold at 4.2% with average hourly earnings steady at a 4% annual gain.
Other labor data has been mixed, with higher job openings and lower jobless claims signaling strength and the ADP Employment Report weaker than expected.
Federal Reserve Gov. Michelle Bowman said Thursday that December's Fed rate cut should be the last, with inflation "uncomfortably" above 2%. Kansas City Fed President Jeff Schmid, a voting member in 2025, also signaled caution about further cuts.
Early Wednesday, Fed Gov. Christopher Waller signaled support for more rate cuts this year.
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Stock Market Rally
The stock market rally wavered Wednesday, with the major indexes peeking above and below breakeven throughout the session.
The Dow Jones Industrial Average rose 0.25% in Wednesday's stock market trading. The S&P 500 index climbed 0.2%. The Nasdaq composite fell less than 0.1% after testing the 50-day and 10-week lines. The small-cap Russell 2000 gave up 0.5%.
Market breadth was weak.
A number of quality stocks are holding up, including Tradeweb Markets, Netflix, Sea, American Express, Energy Transfer, Vistra, Entergy, Baker Hughes, Howmet Aerospace, DT Midstream, Embraer, Spotify and United Airlines.
U.S. crude oil prices fell 1.25% to $73.32 a barrel.
The 10-year Treasury yield rose a fraction to 4.69% on Wednesday after hitting 4.72% intraday. The 52-week high is 4.74%, set last April. The 10-year yield dipped to 4.68% on Thursday.
Bitcoin fell 2.2% to $91,859.54 on Thursday, the lowest 4 p.m. ET figure since late November.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF was just above break-even Wednesday. The iShares Expanded Tech-Software Sector ETF also edged higher with Palantir and AppLovin stock both in the ETF. The VanEck Vectors Semiconductor ETF fell 0.7%. Nvidia and Taiwan Semi stock are huge SMH holdings.
ARK Innovation ETF rose 0.1% and ARK Genomics ETF fell 0.1%. Tesla stock is still a major holding across Ark Invest's ETFs. Cathie Wood's Ark also owns a lot of Nvidia.
SPDR S&P Metals & Mining ETF retreated 0.55%. U.S. Global Jets ETF was flat, with Delta stock a key holding. SPDR S&P Homebuilders ETF climbed 1.1%. The Energy Select SPDR ETF inched up 0.1% and the Health Care Select Sector SPDR Fund advanced 0.5%.
The Industrial Select Sector SPDR Fund added 0.4%. The Financial Select SPDR ETF rose 0.3%.
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Quantum Computing, Other Heat Stocks
IonQ stock dived 39% Wednesday, below the 50-day. Rigetti stock crashed 45% and Quantum Computing plunged 36%. D-Wave Quantum lost 43%. Nvidia CEO Jensen Huang said Tuesday night that the technology won't be "very useful" for 15-to-30 years.
Separately,SoundHound AI stock sold off 16% to 15.02, testing its 10-week line. SOUN stock, an AI play, is off 27% so far this week.
Oklo stock dived 11.5% to 26.12 after reversing from a record high Tuesday. Shares tested a 24.99 handle buy point intraday.
Among less-speculative heat plays, Palantir stock slumped 2.5%, bringing its weekly loss to almost 15%. PLTR nearly tested its 50-day line, but it's already notably below its 10-week. AppLovin stock edged down 0.2% after Tuesday's 7% tumble. APP is some distance above its 50-day but below its 10-week. Astera Labs stock sank 2.1%, closing above its 21-day. ALAB stock, a 2024 AI chip IPO, is still well above its 50-day and 10-week lines.
Nvidia Stock
NVDA stock fell slightly Friday morning, enough to push it below the 50-day line.
The Biden administration will impose new curbs on AI and other advanced chips to Southeast Asia and Persian Gulf states, with global restrictions expanding to all but a handful of close allies, Bloomberg reported Wednesday night. The aim is to close off close off roundabout access to China and Russia.
Nvidia stock lost 2 cents to 140.11 Wednesday, just holding the 50-day/10-week lines. On Tuesday, shares dived 6.2% after briefly hitting a record 153.13, back below a shallow double-bottom base buy point of 146.54.
Nvidia CEO Huang on Monday night talked up huge opportunities and new partnerships for the AI chip leader. Analyst reviews were positive, but the market reaction was not.
Taiwan Semiconductor
Taiwan Semiconductor's December sales surged 57.8% vs. a year earlier in local currency, amid booming AI demand. That was modestly above expectations. Q4 revenue climbed 39%. Taiwan Semi, which makes chips for Nvidia, Broadcom, Apple and more, reports fourth-quarter earnings due Jan. 16.
Taiwan Semiconductor stock rose more than 1% early Friday. Shares fell 2% on Wednesday to 207.12 after sliding 3.9% Tuesday, but still above a 205.63 cup-with-handle buy point.
Tesla Model Y Refresh
Early Friday local time, Tesla launched the refreshed Model Y with a slightly longer range and higher price than the old Model Y. The "Juniper" Model Y has a clearly different front and back, as opposed to the minor exterior changes to the updated Model S, X and 3. Those refreshes didn't see a big sales jump. Early reviews on social media were mixed.
China deliveries are due to start in March, with Europe and the U.S. likely coming soon after.
Tesla also slightly raised Model 3 prices in China.
Tesla Stock
Tesla stock edged higher Friday morning.
On Wednesday, TSLA stock edged up 0.15% to 394.94, still below the 21-day line after Tuesday's 4.1% skid. Shares have been consolidating since hitting a record 488.54 on Dec. 18. The 10-week line is close to catching up.
What To Do Now
The stock market is choppy, with a slightly downward trend. That's extremely dangerous. Investors will get bullish signals in a sideways market that lures them in. But most of those names will fade within a couple days, sometimes within minutes.
Investors can still have significant exposure, but probably raising cash in recent days is a good idea, if only by selling specific holdings.
Keep working on watchlists. A number of stocks noted above are holding up. If the market improves — it's always possible that the next bounce will be the one that has legs — many of these names and others could do well. But it wouldn't take much for these stocks to break down either.
Don't get excited from a strong open or even a positive rebound. You can always test the waters, but it's not a time to be taking the plunge.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
