Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Netflix (NFLX) and Intuitive Surgical (ISRG) jumped on strong earnings Thursday night. Dow giant American Express (AXP) reports early Friday.
The Dow Jones and S&P 500 both hit record highs near Thursday’s open, but the stock market rally slashed gains, closing mixed.
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Nasdaq Fades Despite Strong TSMC Report; Taiwan Semi, CB, PANW In Focus
Taiwan Semiconductor (TSM) gapped up on strong earnings and guidance, fueled by AI chip demand. Nvidia (NVDA), Broadcom (AVGO) and Arm Holdings (ARM) rose, though they came off early highs.
Dow giant Travelers (TRV) gapped up on earnings, lifting some insurers, including Thursday’s IBD Stock Of The Day, Chubb (CB).
Nvidia stock is on IBD Leaderboard and the IBD 50. Nvidia and Broadcom stock are on SwingTrader. Broadcom stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures edged lower vs. fair value. S&P 500 futures and Nasdaq 100 futures were roughly flat. Netflix and Intuitive Surgical are S&P 500 and Nasdaq 100 components.
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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Stock Market Rally
The stock market rally opened solidly higher Thursday but quickly gave up gains. Retail sales, the Philly Fed manufacturing index and weekly jobless claims all pointed to a stronger-than-expected economy, pushing up Treasury yields and curbing Fed rate-cut odds somewhat.
The Dow Jones Industrial Average rose 0.4% in Thursday’s stock market trading, holding some of its early advance as Travelers stock gapped up 9%. The S&P 500 index lost a fraction. Both indexes hit fresh all-time highs near the open.
The Nasdaq composite edged higher, suffering a stalling day. The small-cap Russell 2000 dipped 0.25% after setting a two-year closing high Wednesday.
Despite Thursday’s fade, the major indexes are modestly higher for the week, on track for a sixth straight weekly advance. More broadly, the stock market is up significantly from early September and especially early August, with the S&P 500 and Nasdaq both in power trends.
There were few new buying opportunities, but leading stocks are generally acting well.
U.S. crude oil prices rose 0.4% to $70.67 a barrel.
The 10-year Treasury yield jumped eight basis points to 4.095%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.1%. The VanEck Vectors Semiconductor ETF (SMH) popped 1.7%. Nvidia is the No. 1 holding in SMH, with Taiwan Semi and Broadcom big weights as well.
SPDR S&P Metals & Mining ETF (XME) rose 0.3%. SPDR S&P Homebuilders ETF (XHB) declined 0.7%. The Energy Select SPDR ETF (XLE) advanced 0.5% and the Health Care Select Sector SPDR Fund (XLV) declined 0.6%, with ISRG stock a notable component.
The Industrial Select Sector SPDR Fund (XLI) fell 0.3%. The Financial Select SPDR ETF (XLF) was up 0.3%, with Travelers and American Express both members.
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Netflix Earnings
Netflix earnings and revenue topped views while subscribers grew by 5.07 million, also beating. Revenue climbed 15%, ending a four-quarter string of accelerating growth.
Netflix stock rose solidly in extended trade, signaling a move back above the 50-day line and a 697.39 cup-base buy point initially cleared in late August, according to MarketSurge analysis. NFLX fell 2% to 687.65 in Thursday’s session, undercutting the buy point and 50-day. Shares have fallen 5.8% over five sessions.
Intuitive Surgical Earnings
Intuitive Surgical earnings and revenue beat Q3 consensus. Procedures using the da Vinci robotic surgical system rose 18% vs. a year earlier.
Intuitive Surgical stock jumped in overnight action. Shares are set to decisively clear the 50-day line as well as several weeks of tight action that could treated as a de facto flat base with a 496.48 buy point.
Shares edged down 0.6% on Thursday to 473.73, reversing from near the 50-day.
Taiwan Semiconductor, AI Chips
Taiwan Semiconductor earnings and sales growth accelerated again, to 57% and 41% respectively, with the chip foundry guiding up on Q4. AI chips are leading the way. TSM stock gapped up 9.8% to 205.84, hitting a record high and closing with a $1.067 trillion market cap.
Nvidia stock edged up 0.9% to 136.93, but after hitting a record high of 140.89, clearing a four-month consolidation. NVDA stock edged higher overnight after BofA Securities raised fiscal 2025-2027 earnings estimates and raised its price target to 190 from 165.
Broadcom stock climbed 2.7% to 181.53, hitting 185.51 intraday. AVGO stock is actionable from various entries.
ARM stock advanced 1.4% to 154.60, in range from a 152.39 buy point, but still some distance from its July 9 record high of 188.75.
What To Do Now
The stock market rally had a disappointing fade, especially given Taiwan Semi’s bullish results and guidance fueling AI optimism. Still, the major indexes are at or near record highs. Leading stocks have been acting well.
If you’re heavily invested, you don’t need to be making big moves. You can make incremental buys or add-ons, perhaps trimming or exiting some positions that are lagging.
Keep working on watchlists. A number of stocks are in or near buy points from a variety of sectors. Pay attention to the market, ready to take advantage of opportunities but also to react to negative action in your portfolio or overall market.
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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