Dow Jones futures fell slightly Wednesday morning, along with S&P 500 futures and Nasdaq futures.
The stock market rally suffered sharp losses Tuesday, with the Nasdaq diving in massive volume and S&P 500 falling back below a key level. Treasury yields broke higher on stronger-than-expected economic data.
Nvidia, which had started 2025, reversed lower following CEO Jensen Huang's much-anticipated CES 2025 keynote address Monday night. Taiwan Semiconductor also fell, but held in a buy zone.
Tesla retreated but is still in a recent range.
AppLovin fell sharply on a bearish analyst note, though it did find support. Palantir Technologies dived to undercut a key long-term level.
Netflix held up well as it drifts down to the 50-day/10-week lines.
Investors should be cautious about new buys and need to exit recent purchases that aren't working.
Quantum computing stocks such as IonQ dived overnight after Nvidia CEO Jensen Huang said Tuesday night the tech won't be "very useful" for 15-30 years.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Netflix stock ison SwingTrader. Taiwan Semiconductor stock, Nvidia and Palantir Technologies are on the IBD 50. Nvidia and Palantir stock are on the IBD Big Cap 20. Netflix was Tuesday's IBD Stock Of The Day.
The video embedded in the article discusses Tuesday's market action and analyzes Nvidia, Netflix and AppLovin stock.
Dow Jones Futures Today
Dow Jones futures fell 0.21% vs. fair value. S&P 500 futures and Nasdaq 100 futures sank 0.2%.
The 10-year Treasury yield rose to 4.72%, a new eight-month high.
Fed Gov. Christopher Waller, generally seen as a hawk, still sees further rate cuts in 2025.
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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Stock Market Rally
The stock market rally had a rough session, especially big-cap growth names. Stocks skidded after 10 a.m. ET, as stronger-than-expected job openings and ISM services index pushed up Treasury yields.
The Dow Jones Industrial Average retreated 0.4% in Tuesday's stock market trading. The S&P 500 index slumped 1.1%, below its 50-day moving average, with Palantir and Nvidia stock the biggest losers. The Nasdaq composite sold off 1.9%, below its 21-day line. The small-cap Russell 2000 gave up 0.7%
Nvidia stock was a major weight on the major indexes. But it was a rough day for growth generally.
AppLovin stock, a Nasdaq 100 leader, tumbled 7% on a bearish Bank of America note suggesting current business is running behind consensus. APP stock did come somewhat off lows, but closed below its 10-week line.
Palantir, an S&P 500 and Nasdaq 100 giant, dived 7.8%, below its 21-day and 10-week lines.
Stepping back, the key indexes are still rangebound over the last several weeks, with the Dow Jones and Russell toward the lower end of their recent bands.
U.S. crude oil prices fell 0.9% to $74.25 a barrel.
Bitcoin plunged 5.7% to $96,461.57 as of 4 p.m. ET in Tuesday's risk-off session.
The 10-year Treasury yield rose seven basis points to 4.68%, hitting an eight-month-high 4.7% intraday. Markets are now pricing in just one Fed rate cut this year. Friday's jobs report will be important.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF slumped 2%. The iShares Expanded Tech-Software Sector ETF gave up 2.45%. AppLovin stock is an IGV member. The VanEck Vectors Semiconductor ETF shed 2.4%. Nvidia stock is the largest SMH holding by far.
ARK Innovation ETF gave up 3.7% and ARK Genomics ETF retreated 2.2%. Tesla stock is a major holding across ARK Invest's ETFs. Cathie Wood's Ark also has a big Nvidia stake.
SPDR S&P Metals & Mining ETF edged down 0.2%. The Energy Select SPDR ETF rose 1% and the Health Care Select Sector SPDR Fund climbed 0.5%.
The Industrial Select Sector SPDR Fund dipped 0.1%. The Financial Select SPDR ETF lost 0.2%.
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Nvidia Stock
Nvidia stock briefly hit a record 153.13 after Tuesday's open, but quickly reversed lower. Shares fell 6.2% to 140.14 in heavy volume, just above its 50-day line and just below the 10-week. That followed a strong three-day run, clearing the 50-day line and a shallow double-bottom base buy point of 146.54.
NVDA stock holding the 50-day is important for the AI leader and the broader market rally.
Shares rose about 1% Wednesday morning.
Nvidia CEO Jensen Huang on Monday night talked up huge opportunities and new partnerships for the AI chip leader. Analyst reviews were positive, but markets may have anticipated Juang's generally upbeat speech.
On Tuesday morning, Nvidia CFO Colette Kress said Blackwell chip shipments are on track, adding that the new fiscal year starting in February is "absolutely a growth year" for the data center business.
Taiwan Semiconductor stock fell 3.9% to 211.42, still above a 205.63 cup-with-handle buy point. Taiwan Semiconductor will report December sales on Jan. 10, with fourth-quarter earnings on Jan. 16. Both will be important for the broader AI and chip spaces.
Tesla Stock
Tesla stock fell 4.1% to 394.36, back below the 21-day line. Shares have been consolidating since hitting a record 488.54 on Dec. 18. Ideally, the EV giant would find support around its rising 10-week and 50-day moving averages or even forge a new base. The 10-week line is catching up.
On Tuesday, Bank of America downgraded Tesla to neutral, but raised its price target to 490 from 400.
Tesla also may have moved on new Nvidia self-driving announcements and partnerships.
What To Do Now
After a strong start to 2025, the stock market has stumbled again. After hopeful signs that the Nasdaq and the S&P 500 were gaining momentum, Tuesday's sell-off suggests the prior few sessions were just part of a choppy, rangebound market.
Growth stocks that made strong recent moves generally fell back, including Nvidia, Taiwan Semiconductor and AppLovin. This is why it's important to be incremental about adding exposure in a sideways market, ready to step back quickly.
If your positions aren't working and the market keeps sliding, you might be cutting exposure somewhat, even if that's not your explicit goal.
Being significantly invested still makes sense, though with a hefty dose of cash.
Many stocks would be promising or actionable with one good day, but would look damaged with another negative session.
Screen for stocks that are showing relative strength, holding up or giving up little ground, as well as finding key support. Netflix stock is one such name.
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