Dow Jones futures fell early Friday, along with S&P 500 futures and Nasdaq futures. Retail sales data is on tap before the open after two big inflation reports. Warren Buffett's Berkshire Hathaway revealed portfolio moves.
The stock market rally fell back on the major indexes, with small caps again leading the decline. Federal Reserve chief Jerome Powell, speaking Thursday afternoon, said the Fed doesn't need to be "in a hurry" to cut rates.
The S&P 500 and Nasdaq are still trading relatively tightly, holding the bulk of the Trump bump. But many leading stocks have shown whipsaw action, often on or around earnings.
Tesla tumbled Thursday on reports that the incoming Trump administration is mulling plans to eliminate EV tax credits.
Nvidia continues to trade tightly, above buy points, with earnings due next week. Costco Wholesale is holding just above a buy point.
Key Overnight Movers
Palantir Technologies will shift its stock listing to the Nasdaq from the NYSE, keeping its PLTR ticker. That could pave the way for Palantir stock, which recently joined the S&P 500, to be added to the Nasdaq 100. PLTR stock rose modestly in overnight action.
Applied Materials beat fiscal Q4 views late Thursday, but gave weak guidance for Q1 revenue. Applied Materials stock fell sharply in extended trade.
Chinese e-commerce giant Alibaba topped fiscal Q2 earnings estimates early Friday, though sales missed. Shares rose before the open.
Dow Jones Futures Today
Dow Jones futures were 0.3% below vs. fair value. S&P 500 futures fell 0.4%. Nasdaq 100 futures gave up 0.7%.
Bitcoin, after the prior session's downside reversal, was back near $90,000 again.
The 10-year Treasury yield was little changed, at 4.43%.
The October retail sales report is set for 8:30 a.m. ET. Economists expected a 0.3% gain vs. September, or 0.4% excluding food and gasoline.
China economic data was mixed overnight. October retail sales rose 4.8% vs. a year earlier, up from September's 3.2% and beating views for 3.8%. Industrial production climbed 5.3%, down from September's 5.4% and forecasts for 5.5%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Warren Buffett Buys
Late Thursday, Warren Buffett's Berkshire released its quarterly portfolio holdings via the 13F filing with the SEC. Investors already knew that Berkshire slashed its Apple stake yet again in the third quarter, while also cutting Bank of America sharply. Warren Buffett bought some Domino's Pizza in Q3. Domino's jumped early Friday on that disclosure.
Berkshire stock dipped 0.1% to 467.45 in Thursday's trading. BRKB has a 484.82 flat-base buy point, with Monday's high of 470.51 offering an early entry.
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Stock Market Rally
The stock market rally continued to pull back from Monday's record highs as the Trump bump fades somewhat. The indexes extended loss slightly in the late afternoon on Powell's rate-cut caution. But his comments weren't substantially different from what Powell said after last week's Fed meeting.
Biomed and some other medicals fell into the close on news that Donald Trump nominated Robert F. Kennedy Jr., a noted vaccine skeptic and pharmaceutical industry critic, to run Health and Human Services.
The Dow Jones Industrial Average fell 0.5% in Thursday's stock market trading. The S&P 500 index and Nasdaq composite declined 0.6%, both undercutting the lows of the past several sessions.
The major indexes still hold the bulk of their Trump election gains.
The small-cap Russell 2000 slumped 1.4%, undercutting the low of the Nov. 6 gap-up day. It's retraced more than half its gain from since Trump's election win on Nov. 5.
Not a lot of stocks are flashing buy signals. Many leaders are extended after last week while this week's pullback makes it hard to make and hold progress.
Some stocks that have made bullish moves on earnings have slashed gains or even reversed lower within a day or two, such as Cava.
Government tech consultants, including Parsons, Booz Allen Hamilton, Leidos Holdings and Science Applications suffered sharp, damaging losses Thursday.
U.S. crude oil prices fell 0.4% to $68.70 a barrel.
The 10-year Treasury yield declined two basis points to 4.425%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF tumble 3.2% amid some big individual losers. The iShares Expanded Tech-Software Sector ETF fell 1.3%, with Palantir stock a big member. The VanEck Vectors Semiconductor ETF edged up 0.2%. Nvidia stock is the dominant SMH holding, with AMAT stock also a notable component.
ARK Innovation ETF slumped 3.6% and ARK Genomics ETF tumbled 5.9%. Tesla is still a major holding across Ark Invest's ETFs. Cathie Wood has built up a big Nvidia position too.
SPDR S&P Metals & Mining ETF declined 1.1%. SPDR S&P Homebuilders ETF climbed 0.2%. The Energy Select SPDR ETF rose 0.4% and the Health Care Select Sector SPDR Fund shed 1.6%.
The Industrial Select Sector SPDR Fund retreated 1.7%. The Financial Select SPDR ETF slipped 0.3%.
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Tesla Stock
Tesla stock fell 5.8% to 311.18 on Thursday, now down 13.2% from Monday's two-year high of 358.64. But that follows last week's mammoth 29% gain. Anyone buying on the Nov. 6 postelection gap up is still up significantly.
TSLA stock is still above its 10-day moving average, and well above its 21-day and especially 50-day lines.
Tesla stock retreated Thursday as the broader Trump trade faded and on fears about EV tax credits.
The Trump transition team is discussing whether to try to eliminate the $7,500 tax credit for EVs under the Inflation Reduction Act, Reuters reported. Tesla representatives, perhaps CEO Elon Musk himself, back that move, according to the report.'
Analysts are divided over whether eliminating the tax credit would be a positive for Tesla. Such a move would discourage traditional automakers from ramping up EV investments and production, but it would also reduce the incentive for drivers to buy Tesla vehicles.
The $7,500 tax credit is especially important for the upcoming "affordable" EV, because it's such a large share of the purchase price. At least in the short run, Tesla would likely need to accept a mix of lower prices and demand in the U.S.
Keep in mind that any move to scrap EV credits would need congressional approval. Republicans will hold a narrow majority in both chambers, but many GOP lawmakers have come out in favor of keeping IRA's green energy provisions broadly.
Nvidia Stock
Nvidia stock edged down 0.1% to 146.09 on Thursday after initially rising on a slew of price hikes. That's still in range of a 140.76 consolidation buy point as well as a 144.42 high-handle entry.
Meanwhile, Taiwan Semiconductor tried to bounce from near its 50-day line but hit resistance at its 21-day, closing up 1%. Broadcom fell 1.8% to undercut its 50-day line.
Nvidia earnings are due Nov. 20. That will have a huge impact on NVDA stock of course but also Taiwan Semi, Broadcom and other AI chip plays, along with the overall market.
Costco Stock
Costco stock dipped 1.05% to 923.09, just holding a 923.83 buy point from a flat base. Shares flashed a buy signal on Nov. 7 and broke out the following session, but have drifted lower this week.
Costco earnings aren't for several weeks. However, Walmart, which owns Costco rival Sam's Club, is on tap next week along with BJ's Wholesale. Off-price giant TJX Cos. also reports next week.
What To Do Now
The stock market rally still looks relatively healthy, but is pulling back. After the huge election gains and with Nvidia earnings looming, that's understandable.
A modest pullback could create new buying opportunities.
But right now doesn't seem to be a great time to make new buys. New buys have been scarce and several of those have fizzled as the market drifts lower.
Definitely don't buy extended. Yes, if you buy a stock that's run up it may keep running. But the risks are higher. Anyone buying Cava or Tesla stock at this week's highs is down more than 10%.
Working on watchlists and taking minimal action in the short term is a sound strategy.
Nvidia and Costco stock are on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Costco and Nvidia stock also are on SwingTrader. Nvidia stock is on the IBD 50. Costco was Thursday's IBD Stock Of The Day.
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