The major stock market indexes closed mostly lower on Wednesday, with the Russell 2000 holding hefty gains and the Nasdaq down more than 1%. Investors found a new reason to worry about rate hikes.
The Bank of Canada unexpectedly raised its interest rate a quarter point on its overnight rate to 4.75% from 4.50%, on higher-than-expected consumer spending that sparked inflation worries.
The 10-year U.S. Treasury yield added 9 basis points to 3.78%. The CME FedWatch tool now shows nearly 70% odds for no rate hike at this month's Federal Reserve meeting, and the remainder of traders expect a quarter-point rate hike.
The Nasdaq felt the most pain, down 1.3%. The Dow Jones Industrial Average edged up 0.3%. The S&P 500 fell 0.4%. The Russell 2000 outperformed the major stock market indexes once again, adding 1.8%.
The Nasdaq 100-tracking Invesco QQQ Trust ETF slid 1.7% as some major techs tripped up. The First Trust Nasdaq 100 Equal Weighted ETF fell 1.1%.
And the Innovator IBD 50 ETF fell 2%.
NYSE and Nasdaq volume rose vs. the same time Tuesday, according to preliminary numbers.
Crude oil rallied 1.2% to $72.60 per barrel. Gold futures edged lower 1.2% and remained below the psychological $2,000-per-ounce level.
The price of Bitcoin shed 2.4% to $26,615. Coinbase rebounded 3.2% after Tuesday's 12.1% sell-off on news the SEC charged the cryptocurrency exchange, saying it has operated as an unregistered securities exchange, broker and clearing agency since at least 2019.
Stock Market Movers: Dave & Buster's Scores Big
Tesla rose 1.5%. On Tuesday, the IRS confirmed that all Model 3 EVs are eligible for a $7,500 tax credit. Shares are above the buy range of a double bottom's 207.79 buy point. TSLA has gained over 80% this year so far.
Dave & Buster's spiked 18.3% after reporting better-than-expected Q1 earnings but a miss on sales.
The company said it has repurchased $200 million of stock so far this year, reducing shares outstanding by nearly 12%, said CEO Chris Morris.
The kids-themed restaurant operator plans to open 15 stores in India and five in Australia. Shares retook the 50- and 200-day moving averages on the move. PLAY is on track for its largest increase since November 2020.
Ollie's Bargain Outlet reversed morning gains and retreated 1.5% despite a beat on fiscal first-quarter earnings and a bump on full-year earnings estimates. The move sent shares below the 50-day line just one day after Ollie's regained it.
Casey's Retail gapped down 2.9% in heavy volume Wednesday, triggering the 7% sell rule from the 236.45 buy point of a double-bottom base. Shares plunged further below the 50-day moving average and are now below the 200-day moving average.
The sell-off came after the company reported a 7% drop in its April-ended quarterly earnings and a 4% decline in sales late Tuesday. The convenience-store retailer also missed FactSet profit and revenue estimates.
IBD 50 AI Stock Pops
IBD 50 stock Symbotic rocketed 12.7% after several analysts raised their price targets on the AI-focused robotics company. The stock hit an all-time high Wednesday and has gained over 230% this year.
The company focuses on AI-enabled technology for supply-chain operations.
Vista Energy jumped 3.5% in heavy volume and broke out of a 22.84 buy point in heavy trading. VIST gained 49% this year and hit an all-time high on Wednesday. Analysts expect 60% profit growth this year.
The stock's relative strength line hit a 52-week high as shown by the blue dot on the MarketSmith chart. The Mexico-based oil and gas exploration and drilling company has operations primarily in Argentina and Mexico.
Yext gapped up 38.4% in very heavy volume after the company reported a beat on fiscal first-quarter earnings and sales. It also raised its fiscal year EPS and revenue projections.
Because of the breakaway gap, the stock has a buy range that starts with today's five-minute high at 12.90. Yext is a cloud-based online search and marketing company.
Campbell Soup dropped 8.9% in heavy volume after it beat estimates on its fiscal third-quarter EPS but gave fiscal 2023 adjusted EPS guidance below analysts' consensus estimate. CPB is the S&P 500's biggest loser today.
What To Do Now As Market Rally Turns Upside Down
Netflix Seen Benefiting From Sharing Fee
Netflix gave back earlier gains and closed up 0.1%. JPMorgan Chase raised its price target to 470 from 380 and maintained its overweight rating. Meanwhile, Wells Fargo upped its target to 500 from 400, also with an overweight rating.
The video streaming behemoth is cracking down on password sharing and charging $8 per month on shared accounts. The JPM analyst projects an additional $2.4 billion in revenue in 2023 from the new policy. NFLX is extended from a 349.80 buy point on the stock market and is near a 20% profit target from it.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
