Dow Jones futures rose early Thursday, along with S&P 500 futures and especially Nasdaq futures. Micron Technology jumped on strong earnings, a bullish sign for the chip sector and artificial intelligence plays. Fresh China stimulus also buoyed markets overnight.
The stock market rally was narrowly mixed Wednesday, with small caps leading broad declines. The Nasdaq edged higher as Nvidia extended Tuesday's strong move. Meta Platforms hit fresh highs as Mark Zuckerberg touted AI and reality glasses at the annual Connect conference.
Dow Jones Futures Today
Dow Jones futures were 0.4% above fair value. S&P 500 futures climbed 0.8%. Nasdaq 100 futures jumped 1.5%. Micron is an S&P 500 and Nasdaq 100 stock, while several other big tech stocks rose in sympathy.
Futures suggest the S&P 500 will open at a record high while the Nasdaq would move decisively above the 18,000 level, not far from its all-time best.
The 10-year Treasury yield edged down to 3.77% after rising 4.5 basis points to 3.78% on Wednesday.
Copper prices rose 2%, with silver up nearly 3% and gold up 1%.
Crude oil futures fell nearly 3%. That's after slumping 2.6% on Wednesday to $69.69 a barrel..
Fed chief Jerome Powell and several other policymakers are set to speak just before Thursday's open.
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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Micron Earnings
Micron earnings beat fiscal Q3 views with the memory chip giant guiding higher. MU stock spiked more than 15% in premarket trade, signaling a move back above a falling 50-day line and possibly retaking the 200-day. Shares climbed 1.9% to 95.77 in Wednesday's regular session, continuing a bounce. Micron plunged 47% from late June to mid-September.
The memory-chip giant's results and guidance are an important indicator for chips and AI.
Memory play Western Digital rose solidly. So did memory exposed chip-equipment makers like Applied Materials and Lam Research.
China Stimulus Pushes Up Stocks
China is mulling injecting $142 billion of capital into top banks, Bloomberg reported overnight, citing sources. That would be the latest move to buoy lending and the economy. On Wednesday, the central bank cut the one-year loan rate, a day after signaling that move and more. That news sent China-related stocks soaring.
Also, Thursday, China's securities regulator said it would encourage firms to buy back shares.
Hong Kong's Hang Seng leapt 4.2% on Thursday while the Shanghai composite rallied 3.6%, adding to big weekly gains.
U.S.-traded Chinese stocks fell modestly Wednesday, but closed near session highs, only giving up a small portion of Tuesday's huge gains on monetary stimulus bets.
Bilibili and Tesla archrival BYD fell but held in buy zones while Tencent dipped back into range.
But Chinese stocks are soaring again Thursday. BILI stock is set to gap up 10%. BYD and Tencent, which are not yet trading, are indicated solidly higher.
For its part, Tesla stock rose modestly early Thursday, continuing to rise up the right side of a cup base with a 271 buy point, according to MarketSurge.
Stock Market Rally Wednesday
The stock market rally paused or pulled back somewhat Wednesday.
The Dow Jones Industrial Average fell 0.7% in Wednesday's stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite rose a fraction, buoyed by Nvidia, Meta, Tesla and a few other megacaps.
Still, decliners easily beat winners on both exchanges.
The small-cap Russell 2000 shed 1.2%, moving back toward its 21-day and 50-day lines.
The Invesco S&P 500 Equal Weight ETF fell 0.6%, but still close to record highs.
On the downside, ServiceNow fell on a Justice Department probe into whether software firms overcharged government agencies. ServiceNow stock sank 3.7% Wednesday, still above its rising 21-day line. Germany's SAP, also in focus, fell 3.3%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF dipped 0.2%. The iShares Expanded Tech-Software Sector ETF fell 0.5%, with ServiceNow stock a major component. The VanEck Vectors Semiconductor ETF climbed 0.9%. Nvidia stock is the No. 1 holding in SMH, with Micron also a key member. So are Applied Materials and LRCX stock.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 1.2% and ARK Genomics ETF declined 2.05%. Tesla stock is a major holding across ARK Invest's ETFs. Cathie Wood also has built up a big stake in NVDA stock. ARK also owns a tiny amount of BYD stock.
SPDR S&P Metals & Mining ETF slipped 0.65%. SPDR S&P Homebuilders ETF stepped down 1.5%. The Energy Select SPDR ETF slumped 2%. and the Health Care Select Sector SPDR Fund weakened 1%.
The Industrial Select Sector SPDR Fund lost 0.5% and the Financial Select SPDR ETF dropped 0.6%.
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Nvidia Stock
Nvidia stock rose 2.2% to 123.51 Wednesday. Shares jumped 4% on Tuesday, bouncing off the 50-day and 21-day lines and clearing the Sept. 12 high of 120.79, offering an early entry. NVDA stock is still in range from that buy point. Investors also could use a trendline, with Wednesday's intraday high of 124.94 a specific trigger for that.
Shares rose modestly early Thursday, buoyed by Micron earnings.
Nvidia stock has a 131.26 buy point from an unsightly handle.
Meta Connect
Meta CEO Mark Zuckerberg, giving the Connect keynote address, said Meta AI has 500 million active users and "we haven't even launched in the largest countries." He also announced natural voice interaction for Meta AI.
The company announced the Quest 3S virtual reality headset, which at $299 is much cheaper than the Quest 3's $499 price tag.
While VR headsets have been gaming devices, but Zuckerberg touted the Quest 3S as a virtual workplace with traditional computing features.
Meta stock edged up 0.9% to 568.31, just in range of a 542.81 buy point.
What To Do Now
The market rally is pausing, still in healthy condition. Some stocks cleared or held buy points Wednesday, but it wasn't a flood.
Investors should have heavy exposure at this point, so don't feel compelled to make a lot of trades. You can make some incremental buys or add-on purchases, perhaps taking some profits in various holdings. But if you're in leading stocks, largely standing pat makes a lot of sense.
Work on your watchlists, looking for new setups.
Grade your existing holdings. If you have a number of "C" level stocks, perhaps cut them back to make room for more promising names.
Nvidia, ServiceNow and Meta stock are on IBD Leaderboard and on the IBD 50 Nvidia stock is on SwingTrader. Nvidia was Wednesday's IBD Stock Of The Day.
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