Dow Jones futures and S&P 500 futures were little changed early Thursday, while Nasdaq futures fell slightly. KB Home (KBH) tumbled on earnings, while U.S.-listed Chinese stocks backed off.
The stock market rally enjoyed modest gains on Wednesday, led by the Nasdaq. Chinese monetary stimulus sent China stocks flying along with metal miners and many other related stocks.
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Indexes At Key Levels; Nvidia, Uber And Tesla Rival BYD Flash Buy Signals
Shares of NVDA flashed a buy signal, taking off as Nvidia (NVDA) CEO Jensen Huang apparently is finished with stock sales. Nvidia chipmaker Taiwan Semiconductor Manufacturing (TSM) cleared a buy point. So did Uber Technologies (UBER). Netflix (NFLX) cleared resistance within a buy zone.
Tesla (TSLA) archrival BYD (BYDDF) raced past a new buy point as China monetary-stimulus pledges fueled Chinese stocks. Tesla stock rose modestly and is between buy points.
Nvidia stock is on IBD Leaderboard and SwingTrader. Nvidia and Netflix stock are on the IBD 50. Taiwan Semiconductor was Tuesday’s IBD Stock Of The Day.
The video embedded in the article discusses the market action and reviews Nvidia, Uber and BYD stock.
Chinese Stocks Rise In China, Fall In U.S.
On Tuesday, China’s central bank’s chief signaled a key loan rate would be cut soon, along with a 50-basis-point cut in banks’ reserve requirement. Those moves, and signals of more to come, sent Chinese stocks skyrocketing Tuesday.
On Wednesday, China’s central bank did cut its one-year loan rate to 2% from 2.3%.
Hong Kong’s Hang Seng and the Shanghai composite added to gains modestly Wednesday, but many U.S.-listed Chinese stocks were giving up some of Tuesday’s huge advance, including Alibaba (BABA), JD.com (JD) and Nio (NIO).
Dow Jones Futures Today
Dow Jones futures were just above fair value. S&P 500 were roughly flat. Nasdaq 100 futures futures declined 0.2%.
Crude oil futures fell more than 1%.
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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KB Home Earnings
KB Home earnings just missed fiscal Q3 views as revenue rose 10%, slightly beating. The homebuilder also gave a weak outlook. KBH stock fell solidly in late trade, signaling a 50-day line test. Shares had dipped 0.9% to 87.43 in Tuesday’s regular session, only slightly below an 88.31 buy point.
Stock Market Rally
The stock market rally had a modest but positive session on Tuesday, with Nvidia and China-related stocks leading the way. The Dow Jones hit another all-time high while the S&P 500 set a record close. The Nasdaq moved back above the 18,000 level.
The Dow Jones Industrial Average advanced 0.2% in Tuesday’s stock market trading. The S&P 500 index climbed 0.25%. The Nasdaq composite rose 0.6%. The small-cap Russell 2000 was up 0.2%.
U.S. crude oil prices rose 1.7% to $71.56 a barrel while copper futures climbed 3.3% to a three-month high. Both benefited from China pledges of monetary stimulus.
The 10-year Treasury yield closed flat at 3.74%, reversing from intraday highs of 3.81% after the Consumer Confidence Index suffered its biggest monthly drop in three years. The two-year Treasury yield dipped 3 basis points to 3.55%, a two-year low.
The odds of another 50-basis-point Fed rate cut in early November have topped 60%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.1%. The VanEck Vectors Semiconductor ETF (SMH) popped 1.9%. Nvidia is the largest SMH holding by far, with Taiwan Semi stock a big component.
Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) rose 1.1% and ARK Genomics (ARKG) was flat. 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.
The SPDR S&P Metals & Mining ETF (XME) jumped 4.2%. SPDR S&P Homebuilders (XHB) edged down 0.1%. The Energy Select SPDR ETF (XLE) lost 0.25%, and the Health Care Select Sector SPDR Fund (XLV) slipped 0.2%.
The Industrial Select Sector SPDR Fund (XLI) advanced 0.7%. The Financial Select SPDR ETF (XLF) declined 0.8%.
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Nvidia Stock
Nvidia stock popped 4% to 120.87, bouncing off the 50-day and 21-day lines and clearing a short-term level. NVDA stock has a 131.26 buy point from an unsightly handle. Investors also could use last week’s high of 120.79 as a much smaller handle.
The catalyst for Nvidia’s move, which started midmorning, appears to be news that CEO Jensen Huang has completed a trading plan to sell 6 million shares, reaping $713 million. That suggests he’s done for now.
Also, CFRA Research analyst Angelo Zino said in a client note Tuesday that major cloud-computing firms aren’t slowing AI investments, good news for Nvidia in particular.
Taiwan Semiconductor Stock
Taiwan Semiconductor stock rallied 4.1% to 181.97, back above a 175.45 cup-with-handle buy point. Shares moved back into the buy zone at the open but gained momentum as Nvidia stock ramped up.
Netflix Stock
Netflix stock rose 2.4% to 722.26, rising higher in a cup-base buy zone from the 697.49 entry. Investors also could use 711.33 as a high handle buy point.
Uber Stock
Uber stock climbed 3.65% to 77.44, clearly above an aggressive entry at 75.40. Shares are working toward an official 82.14 buy point. Uber is lagging delivery rivals DoorDash (DASH) and Instacart-parent Maplebear (CART). Also, the upcoming Tesla robotaxi event could move Uber up or down. Uber has forged self-driving alliances with Google’s Waymo and General Motors’ Cruise. On Wednesday, Uber said it would partner with WeRide to add self-driving vehicles to its platform, starting in the United Arab Emirates later this year.
Uber also has a deal with BYD, encouraging drivers around the world to buy the China auto giant’s EVs.
BYD Stock
The Chinese electric-vehicle giant leapt 6.35% to 33, hitting a 52-week high. While now extended from a cup-with-handle base buy point of 30, investors could view that base as a just-too-low handle to a massive cup, offering 32 as an entry.
On a huge day for Chinese stocks, EV rivals Nio, XPeng (XPEV) and Li Auto (LI) surged 11% to 12%. Nio and XPeng are racing from big lows on optimism for their Onvo L60 and Mona M03 EVs, respectively. Both use BYD batteries.
Tesla Stock
Tesla stock rose 1.7% to 254.27, continuing a strong run. Shares are extended from an aggressive entry of 235. TSLA stock has a 271 cup-base buy point, according to MarketSurge.
Tesla has a busy October, with third-quarter deliveries likely due on Oct. 2, the robotaxi event on Oct. 10, and a Q3 earnings report on Oct. 16.
Also, already fierce China EV competition will ramp up significantly next month, led by the new Nio Onvo L60 crossover.
Tesla Rebounds As Robotaxi Event Nears; Waymo Tops 100,000 Weekly Fares
What To Do Now
The stock market rally continues to act well. There aren’t a lot of stocks flashing buy signals at the moment, but many recent leaders continue to advance. A number of stocks are setting up.
Investors can continue to gradually add exposure, depending on current levels. Aggressive traders could go on margin, adding to the potential gains but also losses.
It’s definitely encouraging to see Nvidia stock bounce, especially for tech and AI, though it hasn’t been leading for a while. Don’t ignore the wide array of leading groups showing strength. And that means casting a wide net with your watchlists.
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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