Dow Jones futures rose Friday morning, along with S&P 500 futures and Nasdaq futures. Chinese GDP growth and other key economic data topped views overnight.
A day after big gains for the stock market rally, the major indexes retreated Thursday, with Tesla, Apple and Nvidia sliding. The S&P 500 hit key resistance while the Nasdaq fell back below key levels.
But outside the major indexes there was underlying market strength.
Nvidia chipmaker Taiwan Semiconductor jumped on strong earnings and guidance, with TSM stock closing just within a buy zone.
Goldman Sachs, Entergy, Energy Transfer, SoFi Technologies, Flowserve, Duolingo, Vertiv and Quanta Services also were actionable.
Investors should be engaged and ready to add or reduce exposure with the market at a key juncture.
Nvidia stock is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Taiwan Semiconductor stock, Vertex, SoFi and Vertiv are on the IBD 50. Vertiv stock is on the IBD Big Cap 20.
The video embedded in the article reviewed Thursday's market action and analyzed AI cooling play Vertiv, Energy Transfer and Quanta Services stock.
Dow Jones Futures Today
Dow Jones futures climbed 0.5% vs. fair value. S&P 500 futures advanced 0.6% and Nasdaq 100 futures rose 0.8%.
The 10-year Treasury yield dipped to 4.58%, continuing a recent retreat.
Bitcoin continued to rebound, moving to nearly $103,000.
Chinese released a slew of economic data overnight. Q4 GDP rose 5.4% vs. a year earlier, above views for 5% and picking up from Q3's 4.6%. December retail sales rose 3.7%, up from November's 3% and topping targets for 3.5%. Industrial production gained 6.2% vs. estimates for 5.4%, steady vs. November.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally saw losses for the major indexes, especially the Nasdaq, but also some positive action.
The Dow Jones Industrial Average dipped 0.2% in Thursday's stock market trading. The S&P 500 index fell 0.2% after hitting resistance at the 50-day line for a second straight session. The Nasdaq composite retreated 0.9% after Wednesday's 2.45% jump, dropping below the 21-day and 50-day lines. The small-cap Russell 2000 edged up 0.15%, holding the 21-day.
The Invesco S&P 500 Equal Weight ETF gained 0.8%, closing near session highs. The First Trust Nasdaq 100 Equal Weighted Index ETF rose 0.3%. Both rebounded from their 21-day lines, approaching their 50-day lines.
With the key indexes and ETFs so close to key levels, modest daily or intraday percentage moves have unusually large importance (or perceived importance).
On a weekly basis, the key indexes and equal-weight ETFs are near the top of their ranges following bullish upside reversals.
Also on the plus slide, several more stocks flashed buy signals Thursday. Many were in energy or energy-adjacent areas.
Other leaders fell back, but generally gave up just a portion of Wednesday's strong gains.
Tesla stock retreated 3.4%, but held the 21-day line after surging just over 8% on Wednesday.
However, Apple stock sank 4%, retreating from the 50-day line and a still-valid buy point to to the lowest levels since late November. The catalyst: Another report highlighting Apple iPhone woes in China.
Nvidia stock fell 1.9%, reversing from modest early gains near the 50-day line.
Tesla, Apple and Nvidia edged higher early Friday.
U.S. crude oil prices fell 1.7% to $78.68 a barrel on Thursday.
Treasury Yields
The 10-year Treasury yield sank five basis points to 4.61%. The yield hit a 52-week high of 4.81% intraday Tuesday.
Scott Bessent, President-elect Donald Trump's Treasury Secretary pick, made the case for Trump's policies, telling the Senate Banking Committee that they won't cause inflation. He signaled he'll aim to control deficits even with new tax cuts, saying federal government spending is "out of control." But he stressed Social Security won't be touched.
Bessent, a hedge fund manager, also said the Federal Reserve should remain independent.
Treasury yields previously fell in late November as Trump tapped Bessent to be his top economic official.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 0.6%, just below the 50-day line. The iShares Expanded Tech-Software Sector ETF climbed 0.2%. The VanEck Vectors Semiconductor ETF closed up 0.4%, well off early highs. Nvidia and Taiwan Semiconductor stock are huge holdings.
ARK Innovation ETF edged up 0.1% and ARK Genomics ETF fell 0.7%. Tesla stock is a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF were just above break-even. The Energy Select SPDR ETF climbed 0.7% and the Health Care Select Sector SPDR Fund add 0.4%.
The Industrial Select Sector SPDR Fund bounced 1.2%.
The Financial Select SPDR ETF rose 0.65%.
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What To Do Now
The stock market rally on Thursday had some mixed messages Thursday, with the key indexes and many leading stocks at critical levels.
The Nasdaq and other indexes could punch higher, triggering a wave of buys and a new leg to the market rally. But they could fall back, perhaps even undercutting recent lows. Also, seemingly decisive moves up or down could be head fakes within the ongoing choppy, sideways pattern.
So investors shouldn't rush in. Make the market draw you in over time.
Some more stocks flashed buy signals Thursday, reflecting underlying market strength and resilience, though some came off early highs.
Be ready to take more action. Have your watchlists — and exit strategies — up to date.
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.
