Dow Jones futures edged higher early Wednesday, while S&P 500 futures and Nasdaq futures rose modestly. Nvidia chipmaker Taiwan Semiconductor Manufacturing rose on strong sales amid the ongoing AI chip boom. Nvidia rose before the open while Tesla looks to extend a powerful win streak.
The stock market rally was narrowly mixed Tuesday after Fed chief Jerome Powell stuck to his recent economic script. The Nasdaq and S&P 500 hit record highs before paring gains, while the Dow Jones and Russell 2000 fell.
Brazilian jet maker Embraer flashed a buy signal while Diamondback Energy is setting up.
The video embedded in the article analyzed Tuesday's market action and analyzed Embraer stock, Diamondback Energy and Cava Group.
Dow Jones Futures Today
Dow Jones futures were just above fair value. S&P 500 futures climbed 0.3% and Nasdaq 100 futures rose 0.4%, with Nvidia adding to recent gains overnight.
The 10-year Treasury yield fell a few basis points to 4.27%.
Crude oil futures edged lower.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Taiwan Semiconductor Sales
Taiwan Semiconductor sales jumped 32.9% in June vs. a year earlier in local currency. Second-quarter revenue leapt 40% to $20.83 billion, easily beating views, thanks to strong demand for high-end artificial intelligence chips.
Taiwan Semi, which makes chips for Nvidia, Apple, Broadcom and many more, reports earnings on July 18.
Taiwan Semi stock rose more than 2% early Wednesday. Shares fell 1.1% to 184.52 on Tuesday, after briefly hitting a $1 trillion valuation Monday.
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Stock Market Rally
The stock market rally had a relatively quiet session on the major indexes. The Dow Jones Industrial Average fell 0.15% in Tuesday's stock market trading. The S&P 500 index and Nasdaq composite edged up 0.1%, paring intraday gains.
The Russell 2000 fell 0.45%. The small-cap index is stuck below its 50-day line, hitting resistance there again on Monday.
The Invesco S&P 500 Equal Weight ETF dipped 0.2% after again falling back from its 50-day.
The First Trust Nasdaq 100 Equal Weighted Index ETF fell 0.3%, but just below all-time highs.
Bank stocks rallied, with JPMorgan Chase and Goldman Sachs among those moving into buy zones. JPMorgan reports Friday and Goldman on Monday.
Meanwhile, restaurant stocks struggled, with Chipotle continuing to tumble. Group leader Cava fell below its 21-day line. Is that a constructive shakeout or the start of something more?
The Nasdaq is 8% above its 50-day line, solidly extended from that key level.
U.S. crude oil prices fell 1.1% to $81.41 a barrel, down 2.9% over the last three sessions.
The 10-year Treasury yield rose 3 basis points to 4.3%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 0.5%. The iShares Expanded Tech-Software Sector ETF slumped 1.6%. The VanEck Vectors Semiconductor ETF edged up 0.2%, with Nvidia and TSM stock the top two holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF climbed 0.35% and ARK Genomics ETF rose a fraction. Tesla stock is the No. 1 holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 1%. SPDR S&P Homebuilders ETF declined 0.7%. The Energy Select SPDR ETF retreated 0.9%, with Diamondback stock a member.
The Health Care Select Sector SPDR Fund advanced 0.5%. The Industrial Select Sector SPDR Fund fell 0.4%. The Financial Select SPDR ETF rose 0.8%.
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Tesla Stock Goes For 11
Tesla stock edged higher early Wednesday, eyeing an 11th straight advance.
Shares popped 3.7% on Tuesday to 262.33. Tesla has surged nearly 44% in a 10-day win streak, the longest streak since a 13-day run in June 2023. Most of the gains have come on strong volume. TSLA stock is greatly extended from a late June breakout.
Nvidia Stock
Shares rose nearly 2% before the open.
Nvidia stock rose 2.5% to 131.48 on Tuesday even as a number of other AI chipmakers retreated Tuesday.
NVDA stock has been consolidating for a few weeks, but needs more time to forge a new base.
Stocks In Buy Areas
Embraer stock jumped 7.4% on Tuesday to 28.72, retaking the 50-day line in heavy volume and breaking a trendline in an emerging consolidation. ERJ stock has a new consolidation with a 31.12 buy point, with 29.95 offering another early entry.
Diamondback Energy edged down 0.4% on Tuesday to 202.60, a third straight loss in light volume, but coming off intraday lows. FANG stock has a cup base with a 211.96 buy point, but is on track to have a handle later this week.
What To Do Now
The Nasdaq is stretched while small caps, midcaps and the S&P 500 equal-weight ETF RSP all are stuck below their 50-day lines. But stocks continue to flash buy signals.
Investors can be making new buys, but need to have a tight leash in case those positions or the broader market falters. It still makes sense to have solid exposure, but you could consider taking some profits.
Keep updating watchlists. A lot of stocks that have pulled back to around their 50-day lines could suddenly look a lot better with one good day — or look damaged with one poor session.
Pay attention to the broader market and be aware of upcoming earnings reports.
Nvidia, Embraer and Taiwan Semiconductor stock are on IBD Leaderboard. Diamondback Energy stock is on SwingTrader. Nvidia stock is on the IBD 50. Howmet Aerospace was Tuesday's IBD Stock Of The Day.
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