Dow Jones futures climbed slightly overnight, while S&P 500 futures and Nasdaq futures rose modestly. Micron Technology (MU) jumped on strong earnings, a bullish sign for the chip sector and artificial intelligence plays.
The stock market rally was narrowly mixed Wednesday, with small caps leading broad declines. The Nasdaq edged higher as Nvidia (NVDA) extended Tuesday’s strong move. Meta Platforms (META) hit fresh highs as Mark Zuckerberg touted AI and reality glasses at the annual Connect conference.
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Blue Chips, Small Caps Lag In Mixed Session; META, KBH, ARM In Focus
U.S.-traded Chinese stocks fell modestly Wednesday, but closed near session highs, only giving up a small portion of Tuesday’s huge gains on monetary stimulus bets.
Bilibili (BILI) and Tesla (TSLA) archrival BYD (BYDDF) held in buy zones while Tencent Holdings (TCEHY) dipped back into range.
On the downside, ServiceNow (NOW) fell on a Justice Department probe into whether software firms overcharged government agencies. ServiceNow stock sank 3.7%, still above its rising 21-day line. Germany’s SAP (SAP), also in focus, fell 3.3%.
Nvidia, ServiceNow and Meta stock are on IBD Leaderboard and on the IBD 50 Nvidia stock is on SwingTrader. Nvidia and ServiceNow stock are. Nvidia was Wednesday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures were 0.1% above fair value. S&P 500 futures climbed 0.3%. Nasdaq 100 futures rose 0.5%. Micron is a Nasdaq 100 stock, while several other big tech stocks rose in sympathy.
Fed chief Jerome Powell and several other policymakers are set to speak just before Thursday’s open.
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
Micron Earnings
Micron earnings beat fiscal Q3 views with the memory chip giant guiding higher. MU stock spiked more than 10% in late trade, signaling a move back above a falling 50-day line and possibly retaking the 200-day. Shares climbed 1.9% to 95.77 in Wednesday’s regular session, continuing a bounce. Micron plunged 47% from late June to mid-September.
The memory-chip giant’s results and guidance are an important indicator for chips and AI.
Memory play Western Digital (WDC) rose solidly. So did memory exposed chip-equipment makers like Applied Materials (AMAT) and Lam Research (LRCX).
Stock Market Rally
The stock market rally paused or pulled back somewhat Wednesday.
The Dow Jones Industrial Average fell 0.7% in Wednesday’s stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite rose a fraction, buoyed by Nvidia, Meta, Tesla and a few other megacaps.
Still, decliners easily beat winners on both exchanges.
The small-cap Russell 2000 shed 1.2%, moving back toward its 21-day and 50-day lines.
The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.6%%, but still close to record highs.
The S&P 500 and Dow pausing at record highs with the Nasdaq holding the 18,000 levels is normal and health after the strong gains since Sept. 6. That could give an opportunity for more stocks to set up handles, tight patterns or pullbacks to key levels.
U.S. crude oil prices slumped 2.6% to $69.69 a barrel.
The 10-year Treasury yield rose 4.5 basis points to 3.78%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.5%, with ServiceNow stock a major component. The VanEck Vectors Semiconductor ETF (SMH) climbed 0.9%. Nvidia stock is the No. 1 holding in SMH, with Micron also a key member. So are Applied Materials and LRCX stock.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 1.2% and ARK Genomics ETF (ARKG) declined 2.05%. Tesla stock is a major holding across ARK Invest’s ETFs. Cathie Wood also has built up a big stake in NVDA stock. ARK also owns a tiny amount of BYD stock.
SPDR S&P Metals & Mining ETF (XME) slipped 0.65%. SPDR S&P Homebuilders ETF (XHB) stepped down 1.5%. The Energy Select SPDR ETF (XLE) slumped 2%. and the Health Care Select Sector SPDR Fund (XLV) weakened 1%.
The Industrial Select Sector SPDR Fund (XLI) lost 0.5% and the Financial Select SPDR ETF (XLF) dropped 0.6%.
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Nvidia Stock
Nvidia stock rose 2.2% to 123.51 Wednesday. Shares jumped 4% on Tuesday, bouncing off the 50-day and 21-day lines and clearing the Sept. 12 high of 120.79, offering an early entry. NVDA stock is still in range from that buy point. Investors also could use a trendline, with Wednesday’s intraday high of 124.94 a specific trigger for that.
Shares edged higher late after Micron earnings.
Nvidia stock has a 131.26 buy point from an unsightly handle.
Meta Connect
Meta CEO Mark Zuckerberg, giving the Connect keynote address, said Meta AI has 500 million active users and “we haven’t even launched in the largest countries.” He also announced natural voice interaction for Meta AI.
The company announced the Quest 3S virtual reality headset, which at $299 is much cheaper than the Quest 3’s $499 price tag.
While VR headsets have been gaming devices, but Zuckerberg touted the Quest 3S as a virtual workplace with traditional computing features.
Meta stock edged up 0.9% to 568.31, just in range of a 542.81 buy point.
Chinese Stocks
U.S.-listed or -traded stocks held on to the bulk of Tuesday’s big gains sparked by China’s central bank chief pledging a variety of monetary stimulus, carrying through on some of that on Wednesday.
Chinese messaging and gaming giant Tencent fell 2.3% to 52.40. That’s back in range of a 50.89 buy point from a flat base or a huge cup-with-handle base going back to January 2023. TCEHY stock leapt 7% on Tuesday.
Bilibili stock slipped 1.9% to 18.27 after spiking 17% on Tuesday. Shares just hung on to an 18.19 consolidation buy point. Late Wednesday, Goldman Sachs upgraded BILI stock to a buy, sending shares up modestly overnight.
BYD stock declined 1% to 32.59 after jumping 6.35% on Tuesday. The Tesla rival held above a 32 buy point from the top of a two-month consolidation that also serves as an early entry to a 13-month cup base.
Tesla stock, for its part, rise 1.1% to 257.02, continuing to rise up the right side of a cup base with a 271 buy point, according to MarketSurge.
What To Do Now
The market rally is pausing, still in healthy condition. Some stocks cleared or held buy points Wednesday, but it wasn’t a flood.
Investors should have heavy exposure at this point, so don’t feel compelled to make a lot of trades. You can make some incremental buys or add-on purchases, perhaps taking some profits in various holdings. But if you’re in leading stocks, largely standing pat makes a lot of sense.
Work on your watchlists, looking for new setups.
Grade your existing holdings. If you have a number of “C” level stocks, perhaps cut them back to make room for more promising names.
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.
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