Dow Jones futures rose solidly early Wednesday, along with S&P 500 futures and Nasdaq futures, buoyed by comments from a top Bank of Japan policymaker. AI play Super Micro Computer dived overnight on an earnings miss and weak guidance.
Bank of Japan Deputy Gov. Shinichi Uchida said overnight that the BoJ won't raise rates further when markets are unstable. That sent the yen solidly lower vs. the dollar and lifted Dow futures.
A rising yen following last week's BoJ rate hike helped trigger the recent global sell-off.
The stock market rebounded Tuesday after several days of sharp losses, despite a late fade. Nvidia and Meta Platforms led megacaps, while MercadoLibre broke out and AI play Palantir Technologies gapped up on earnings.
But it's just Day One of a market rally attempt.
Dow Jones Futures Today
Dow Jones futures rose 0.7% vs. fair value, with Disney stock a blue chip. S&P 500 futures climbed 1% and Nasdaq 100 futures jumped 1.3%.
Futures erased slim losses Tuesday night on the comments from BOJ's Uchida.
The 10-year Treasury yield climbed to 3.93%. Crude oil jumped over 2%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Key Earnings
Amgen, Nvidia partner Super Micro, Tesla rival Rivian, Toast, Exelixis, Halozyme, Fortinet, Airbnb and recent IPO Reddit.
Fortinet stock spiked, signaling a move above key levels after hitting a 2024 low on Monday. Halozyme jumped and Exelixis rose strongly, both potentially actionable. Reddit stock rose slightly, reversing from solid losses Tuesday night.
On the downside, Super Micro stock reversed sharply lower after missing fiscal Q4 views and giving mixed guidance. Investors shrugged off a planned 10-for-1 stock split.
Airbnb stock plunged as the travel site warned of weaker demand. Rivian stock fell sharply. Toast fell modestly. Amgen stock retreated modestly as well, testing a buy point.
Walt Disney, which reported early Wednesday, topped views as its combined streaming services turned a profit for the first time. Shares were little changed in active trade.
Novo Nordisk, also out before the open, retreated solidly. Weight-loss drug rival Eli Lilly is due early Thursday.
Nvidia stock is on Leaderboard. MercadoLibre is on the flagship IBD 50 list. The video embedded in the article reviews Tuesday's market action and analyzes PLTR stock, Intuitive Surgical and Tenet Healthcare.
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Stock Market Rally Attempt Begins
The stock market rally saw a bounce Tuesday after big losses in the prior three sessions. The major indexes all pared gains in the final hour, hitting resistance near Friday's lows.
The Dow Jones Industrial Average advanced 0.8% in Tuesday's stock market trading, hitting resistance at the 50-day line. The S&P 500 index climbed 1%. The Nasdaq composite rose 1% after bouncing off its 200-day line Monday. The small-cap Russell 2000 popped 1.2%, nearing the 50-day line after finding support at its 200-day on Monday.
A one-day bounce isn't that meaningful. Tuesday marked Day One of a stock market rally attempt. Look for a follow-through day, starting Friday, to confirm the rally attempt.
U.S. crude oil prices edged up 0.4% to $73.20 a barrel.
The 10-year Treasury yield jumped 10 basis points to 3.89% as global financial conditions normalize.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF bounced 2.45%. The iShares Expanded Tech-Software Sector ETF rose 1.5%, with Palantir stock in the ETF. The VanEck Vectors Semiconductor ETF rebounded 1.95%. Nvidia stock is the No. 1 holding in SMH.
Reflecting stocks with more speculative stories, the ARK Innovation ETF rose 1.5% and ARK Genomics tacked on 1.55%. Tesla stock is a notable holding across ARK Invest's ETFs.
The SPDR S&P Metals & Mining ETF climbed 1%. The SPDR S&P Homebuilders ETF and Energy Select SPDR ETF each gained 0.6%.
The Health Care Select Sector SPDR Fund advanced 0.5%. The Industrial Select Sector SPDR Fund picked up 1.2%. The Financial Select SPDR ETF rose 1.6%.
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Stocks To Watch
Nvidia stock rose 3.8% on Tuesday to 104.25, continuing the bounce from Monday's intraday lows. The AI chip leader is still below all its 10-day, 21-day and 50-day moving averages, so it needs repair work. But it's important to see how the market's most important stock handles itself.
NVDA stock rose slightly overnight following Super Micro's results and guidance, and the Bank of Japan comments.
Meta stock popped 3.9% to 494.10, just regaining its 50-day line. But the tech titan needs more time to forge a new base.
MercadoLibre stock gained 1.9% to 1,180.39, closing above the 1,792.05 cup-with-handle base buy point. On Friday, MELI stock gapped above an early entry of 1,764.50 on blowout earnings. Shares held that entry on Monday after briefly tumbling to the 50-day.
Palantir stock gapped up 10.4% to 26.59 on Tuesday following strong earnings, accelerating revenue growth and bullish guidance. Shares are close to a prior 27.50 buy point that investors could still use. On Monday, PLTR tested its 200-day line before slashing losses.
What To Do Now
If a market uptrend lasts several weeks or months, you want to get the bulk of that advance. But trying to guess the exact moment a rally starts raises the risk that you'll get burned multiple times.
Waiting just a few days for a follow-through day will reduce the risk of getting in too early, though even that's no guarantee. Plenty of confirmed uptrends fail.
Right now investors need discipline. That means staying engaged with the market while remaining patient. It also means continuing to work on watchlists, focusing on stocks holding key levels and showing relative strength. You don't want to ignore the market, missing out on new rallies and scrambling to find stocks to buy.
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.
