Dow Jones futures tilted lower after hours, along with S&P 500 futures and Nasdaq futures, ahead of key China stimulus plans
The stock market rally fell back Monday as the 10-year Treasury yield moved above 4%.
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Stocks Slump As Rates Rise Again; Flowserve, ROAD, Allstate In Focus
Nvidia (NVDA) rose solidly, flashing some early buy signals. Tesla (TSLA) fell back, carving a handle ahead of its long-awaited robotaxi event. Apple (AAPL) retreated to key support after Jefferies analyst Edison Lee said iPhone 16 and 17 expectations are “too high.”
Insurance stocks were big losers as Hurricane Milton is tracking toward Tampa, Florida with a Wednesday landfall.
Nvidia stock is on IBD Leaderboard, SwingTrader and the IBD 50.
Dow Jones Futures Today
Dow Jones futures were 0.1% below fair value. S&P 500 futures and Nasdaq 100 futures edged lower.
There were unconfirmed reports of explosions in Iran. Israel had said it would respond to Tehran’s ballistic missile attack on Oct. 1.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
China Stimulus Plans
Overnight, China’s National Development and Reform Commission is set to announce stimulus measures Tuesday morning local time. Will the fiscal stimulus measures will live up to investor expectations?
Hong Kong’s Hang Seng Index has surged since late September amid rate cuts and various measures to encourage lending, property buying and Chinese shares. The Shanghai exchange, closed for five trading days for national holidays, will reopen Tuesday.
Chinese stocks, including those that trade in the U.S. such as Alibaba (BABA) and Tesla rival BYD (BYDDF), have raced higher.
Miners surged initially on China stimulus moves, but have paused for the past few sessions. Copper giant Freeport-McMoRan (FCX) has forged a handle buy point.
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Stock Market Rally
The stock market rally retreated Monday, giving up most or all of Friday’s solid gains.
The Dow Jones Industrial Average retreated 0.9% in Monday’s stock market trading. The S&P 500 index lost nearly 1%. The Nasdaq composite fell 1.2%, back below the 18,000 level.
Apple stock fell 2.25% to 221.69, undercutting its 50-day moving average. That weighed on all the major indexes, though Nvidia provided some support to the S&P 500 and Nasdaq. The major indexes did hold their 21-day moving averages.
The small-cap Russell 2000 fell 0.9%, just below its 21-day line.
All four indexes remain within a trading range of the past few weeks, though the Russell is getting near the low of its band.
There weren’t many breakouts or buy signals, though Nvidia stock and Generac Holdings (GNRC) were exceptions. Many leaders are pausing along with the market, forging handles or tight patterns or pulling back to key support.
U.S. crude oil prices jumped 3.7% to $77.14 a barrel.
The 10-year Treasury yield rose 4.5 basis points to 4.025%, closing above the 4% level for the first time since the end of July. Treasury yields surged last week as a strong jobs report and other economic data eased downside fears, leading investors to price out another big Fed rate cut. Markets now see a small chance that the Fed will take no action at the Nov. 6-7 meeting.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.55%. The iShares Expanded Tech-Software Sector ETF (IGV) declined 1.4%. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.2%. Nvidia stock is the top holding in SMH.
The ARK Innovation ETF (ARKK) retreated 1.4% and ARK Genomics ETF (ARKG) lost 0.7%. Tesla stock is still a big holding across Ark Invest’s ETFs. Cathie Wood also has built up a sizable Nvidia stock stake. Ark Invest also owns a small stake in BYD, one of two stocks that both Cathie Wood and Warren Buffett own.
SPDR S&P Metals & Mining ETF (XME) inched up 0.2%. U.S. Global Jets ETF (JETS) descended 0.3%. SPDR S&P Homebuilders ETF (XHB) closed just below break-even. The Energy Select SPDR ETF (XLE) advanced 0.35% and the Health Care Select Sector SPDR Fund (XLV) declined 0.4%.
The Industrial Select Sector SPDR Fund (XLI) dipped 0.2%. The Financial Select SPDR ETF (XLF) retreated 1.2%.
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Nvidia Stock Clears Buy Points
Nvidia stock gained 2.3% to 127.78 on Monday, coming off intraday highs as market losses picked up. Shares have rallied 9.2% in a four-day win streak and bounce off the 50-day line.
Monday’s move cleared a trendline entry around 126 as well as the Sept. 26 short-term high of 127.67, which could viewed as handle buy point. The Aug. 26 high of 131.26 also could serve as an NVDA stock buy point.
Nvidia CEO Jensen Huang will give the keynote address at CES in Las Vegas on Jan. 6, 2025, the Consumer Technology Association said Tuesday. On Oct. 2, Huang said that Blackwell, the next-generation AI chip, is in “full production” with demand “insane.”
Tesla Stock
Tesla stock fell 3.7% to 240.83 on Monday, slightly below its 21-day line. The EV giant now has a 264.86 cup-with-handle buy point on a daily and weekly chart, according to MarketSurge.
Shares fell 4% last week after Tesla deliveries missed whisper numbers. TSLA stock rebounded Friday from near the 21-day line.
Ideally, Tesla stock won’t make a decisive move until after the Thursday night’s robotaxi reveal.
The Tesla robotaxi event could be critical for the EV giant’s prospects, but there are many unknowns.
Tesla Sets Up As Robotaxi Looms; BYD Keeps Surging
What To Do Now
The stock market rally had solid losses Tuesday, but the key indexes are still in a tight range with leading stocks acting well. This could be a bullish pause before another leg in the bull run, but wait for that strength.
Investors on Monday could have bought or added to Nvidia or one of the other stocks flashing buy signals, but it wasn’t a time to get especially aggressive.
Focus on your watchlists and reviewing your portfolio. Be ready to take advantage if the market revs higher. If you’re already heavily exposed, your might identify some relative laggards to sell if you need to make room.
If the market breaks lower, you’ll want to have your game plan in place, especially for your weaker holdings.
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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