Dow Jones futures edged lower early Thursday, while S&P 500 futures and Nasdaq futures rose modestly. Tesla, Meta Platforms, Microsoft headlined a huge slate of Wednesday night earnings, with ServiceNow and IBM also key.
Tesla stock rose solidly late despite missing views as Elon Musk sees true self-driving starting in June with and "epic" 2026 ahead. Meta rose while Microsoft and ServiceNow tumbled.
The stock market rally retreated modestly Wednesday. The Federal Reserve left rates steady and signaled the pause may continue.
Nvidia stock fell solidly Wednesday, then edged lower Thursday. Microsoft, Meta and Tesla are big Nvidia customers.
The video embedded in the article reviews Wednesday's market action and analyzes Cava Group, State Street and GE Aerospace.
Dow Jones Futures Today
Dow Jones futures fell 0.15% vs. fair value, with Microsoft, IBM and Nvidia stock all Dow components. S&P 500 futures advanced 0.3% and Nasdaq 100 futures climbed 0.5%. Meta stock, Microsoft, Tesla, Nvidia, IBM and ServiceNow are all on the S&P 500, with all but IBM on the Nasdaq 100.
The 10-year Treasury yield fell several basis points to 4.5%.
At 8:30 a.m. ET, the Commerce Department will release fourth-quarter GDP estimates for the first time, which will include the Fed's favorite inflation gauge, the core PCE price index.
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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Federal Reserve Meeting
As expected, policymakers left rates steady. The latest Fed statement upgraded the labor market to "solid," while still seeing inflation as "somewhat elevated." But Fed chief Jerome Powell, at his post-meeting press conference, sounded confident about recent inflation, but said policymakers are in "no hurry" to take further action.
Stock Market Rally
The stock market rally saw modest losses Wednesday heading into the big earnings after the close. Stocks and bonds ultimately didn't move that much on the Fed.
The Dow Jones Industrial Average fell 0.3% in Wednesday's stock market trading. The S&P 500 index and Nasdaq composite declined 0.5%. The small-cap Russell 2000 dipped 0.25%.
Nvidia stock fell 4% Wednesday, but held the 200-day line as many AI chip plays stalled amid continued DeepSeek uncertainty. AI-related energy plays generally extended Tuesday's gains. Meanwhile, several software stocks that rallied on cheap AI hopes gave up some gains Wednesday, including ServiceNow.
U.S. crude oil prices fell 1.6% to $72.62 a barrel, the lowest close of 2025.
The 10-year Treasury yield was essentially flat at 4.55%, erasing initial post-Fed gains on Powell's comments.
Growth ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.4%. The iShares Expanded Tech-Software Sector ETF sank 0.4%, with Microsoft and ServiceNow stock major members. The VanEck Vectors Semiconductor ETF dipped 0.3%.
ARK Innovation ETF edged down 0.1% and ARK Genomics ETF fell 1.6%. Tesla stock is the No. 1 holding across Ark Invest's ETFs.
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Tesla Earnings
Tesla earnings and revenue came in below views, even with an unrealized Bitcoin gain. Automotive gross margin excluding regulatory credits tumbled to 13.6%, well below consensus and a multiyear low.
CEO Elon Musk signaled on the earnings call that 2025 won't be great for EV sales, citing battery pack constraints as a factor. He didn't give a 2025 delivery target, after predicting 20%-30% growth after the Q3 earnings report.
But the focus on the call was robotaxis. Musk said paid unsupervised robotaxi rides will begin this June in Austin, with robotaxi tests in many cities by year end.
Tesla predicted volume production of the Cybercab in 2026, though the EV giant also suggested it still hasn't figured out the revolutionary "unboxed" manufacturing process.
The EV giant says it's still on track to begin producing "affordable" EVs in the first half of 2025, but there are still no images, let alone specs. The general thinking is the first "affordable" EV will be a Model 3 or Y variant.
Musk was also very bullish on the Optimus robot.
Tesla stock rose modestly in premarket trade, buoyed by Musk's robotaxi comments.
Shares fell 2.5% to 388.14 on Wednesday, undercutting the 50-day line.
TSLA stock is in a base with a 488.54 buy point, according to MarketSurge. A strong move above the 50-day and 21-day lines could offer an aggressive entry. Investors also could use a downward-sloping trendline or the Jan. 17 high of 439.74 as early entries.
Microsoft Earnings
Microsoft earnings and revenue topped fiscal Q2 views, but cloud revenue came in a little light. Later, the Dow tech giant guided low on Q3 revenue. It also said fiscal 2026 capital spending growth will slow vs. fiscal 2025. That could be bad news for Nvidia and other AI hardware plays.
Microsoft stock fell solidly in extended trade. Shares declined 1.1% to 442.33 on Wednesday, back below a 447.27 early entry. MSFT stock is in a base going back to early July, with a 468.35 buy point. But investors could see a cup base within the larger consolidation offering a 456.16 buy.
Meta Earnings
Meta earnings beat views. But revenue guidance was light while the Facebook and Instagram parent sees a big rise in expenses.
Meta stock rose modestly in premarket trade. Shares edged up 0.3% to 676.49 Wednesday, their eighth straight gain. Meta is extended from a flat base.
Last week, Mark Zuckerberg announced a big jump in Meta's capital spending this year.
On Wednesday's earnings call, Meta signaled an interest in custom AI chips, which is good news for Broadcom and Marvell. Both chipmakers rose overnight while Nvidia edged lower on Meta's custom chip interest and Microsoft's lukewarm capital spending outlook.
ServiceNow Earnings
ServiceNow earnings topped but Q1 subscription revenue guidance was light. The software giant announced a $3 billion buyback.
ServiceNow stock sold off in extended action. Shares retreated 2.3% to 1,143.63 on Wednesday, back below a 1,157.90 flat-base buy point.
A number of software makers retreated overnight as ServiceNow and Microsoft retreated.
IBM Earnings
IBM earnings topped views with the venerable tech giant signaling a strong 2025, citing AI growth.
Shares surged late, signaling a cup-base breakout. IBM stock rose 1.3% to 228.63 on Wednesday, moving off the 50-day line.
What To Do Now
The stock market rally is still doing well, with the major indexes above their 50-day lines and not far from all-time levels. But the market is still grappling with the potential DeepSeek implications just as earnings season hits high gear.
So could be a lot of volatility in the next few weeks, especially in the tech and broader AI field.
Some stocks are flashing buy signals. Investors can make buys but there are reasons to be cautious in the very short term.
As Monday showed, don't get too concentrated in a particular theme. A number of financials and some aerospace plays are showing strength, while Cava Group and Starbucks flashed buy signals in the restaurant space.
So have your watchlists up to date and ready to take action in either direction.
Stocks On Key IBD Lists
Meta stock and ServiceNow are on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Microsoft stock is on IBD Long-Term Leaders, with ServiceNow on the LTL watchlist. ServiceNow and Meta are on the IBD 50 and the IBD Big Cap 20.
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