Dow Jones futures were little changed early Wednesday, while S&P 500 futures and Nasdaq futures rose slightly. AI leader Nvidia (NVDA) delivered another strong beat-and-raise report Tuesday night, with shares reversing higher Wednesday.
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Nvidia earnings have huge implications for the market rally and artificial intelligence stocks. Notable AI plays Microsoft (MSFT), Advanced Micro Devices (AMD), Google parent Alphabet (GOOGL), Meta Platforms (META), Palantir Technologies (PLTR) and Super Micro Computer (SMCI) are in or near buy areas. All were up slightly early Wednesday.
Meanwhile, Sam Altman is returning as CEO of Microsoft-backed OpenAI CEO.
The major indexes pulled back modestly Tuesday heading into Nvidia earnings, while small caps saw larger losses. The stock market rally still looks strong, though many leading stocks are extended.
In addition to Nvidia, Urban Outfitters (URBN), HP Inc. (HPQ), Autodesk (ADSK) and dLocal (DLO) also reported earnings Tuesday night. Deere (DE) reported early Wednesday.
ADSK and URBN stock initially rose late, but reversed lower, after both closed in buy range. HP stock fell modestly on mixed results. DE stock tumbled on weak fiscal 2024 guidance. DLO stock plunged after Q3 EPS and revenue fell short.
Microsoft stock, Nvidia and Meta Platforms are on IBD Leaderboard. META stock is on SwingTrader. MSFT stock is on the IBD Long-Term Leaders list. Nvidia stock, Microsoft and Super Micro are on the IBD 50. Microsoft, Meta Platforms and SMCI stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were about even vs. fair value, as Caterpillar (CAT) fell on Deere guidance. S&P 500 futures climbed 0.2% and Nasdaq 100 futures advanced 0.3%. Nvidia stock is a major S&P 500 and Nasdaq 100 component, along with many other big AI plays.
The 10-year Treasury yield fell a few basis points to 4.38%.
Crude oil fell more than 1%.
Israel and Hamas overnight agreed to a four-day cease fire in Gaza. Hamas will release some 50 hostages from Israel.
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 retreated modestly Tuesday, with investors taking some profits ahead of Nvidia earnings.
The Dow Jones Industrial Average fell 0.2% in Tuesday’s stock market trading. The S&P 500 index also lost 0.2%. The Nasdaq composite gave up 0.6%.
The Nasdaq 100 fell back from Monday’s 52-week high. The small-cap Russell 2000 fell 1.3%, hovering below the 200-day line.
U.S. crude oil prices lost 6 cents to $77.77 a barrel.
The 10-year Treasury yield was flat at 4.42%.
Minutes from the Oct. 31-Nov. 1 Fed meeting showed policymakers still worried about inflation and not thinking about rate cuts. Fed minutes had little impact on stocks or Treasury yields.
The market rally, which entered a power trend Monday, looks healthy. Tuesday was only the third down day for the S&P 500 and Nasdaq since they bottomed in late October. Leading stocks are acting well, though many are extended.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) just edged lower Tuesday. Microsoft stock is a major IGV component. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.5%. Nvidia stock is the No. 1 holding in SMH. with AMD stock a notable member.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 2.25% and ARK Genomics ETF (ARKG) skidded 3.7%.
SPDR S&P Metals & Mining ETF (XME) rose 0.25% and the Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.3%. SPDR S&P Homebuilders ETF (XHB) stepped down 0.9%. The Energy Select SPDR ETF (XLE) fell 0.2% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.6%
The Industrial Select Sector SPDR Fund (XLI) and the Financial Select SPDR ETF (XLF) edged down 0.1%.
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Nvidia Earnings
Nvidia earnings skyrocketed 593% vs. a year earlier while revenue leapt 206% to $18.12 billion, both easily beating fiscal Q3 views. The AI chip giant also guided higher.
But after blowout beat-and-raise reports in Q1 and Q2, will that satisfy investors?
NVDA stock rose 1% early Wednesday after sinking nearly 2% after hours. Shares dipped 0.9% to 499.44 in Tuesday’s session, still in range of a 476.09 buy point from a double-bottom base.
OpenAI CEO Altman
Altman will return to the AI startup, seemingly putting an end to a wild . Former Salesforce (CRM) co-CEO Bret Taylor and former Treasury Secretary Larry Summers will join OpenAI’s revised board.
OpenAI’s board had ousted Altman on Friday, but a day later was in talks to bring him back as big investors like Microsoft and key staff rebelled. Microsoft said Monday it would hire Altman and fellow co-founder Greg Brockman to form a new AI lab. The vast majority of OpenAI staff threatened to quit to work forAltman at Microsoft.
AI Stocks
Microsoft stock edged higher in premarket trading. Shares fell 1.2% to 373.07 on Tuesday, in range of a 366.78 cup-base buy point. A longer pause would let the moving averages catch up.
AMD stock rose slightly in extended trade. Shares sank 1.9% to 119.18 on Tuesday. The Nvidia rival now has a 122.41 cup-with-handle buy point.
Google stock tilted higher. Shares edged up 0.5% Tuesday to 136.97. Investors could use Thursday’s high of 137.22 as an early entry in a flat base. The official buy point is 141.22.
Meta stock rose a fraction overnight. Shares edged down 0.9% to 337.01 on Tuesday, within the buy zone of a consolidation going back to late July.
PLTR stock climbed slightly after falling modestly Tuesday night. Shares tumbled 7.2% to 19.80 on Tuesday in an outside, downside reversal. Palantir stock fell back below a 20.24 cup buy point, according to MarketSmith analysis. On Tuesday, Palantir won a contract with the U.K.’s National Health Service, though that had been expected.
SMCI stock rose nearly 3% early Wednesday. Shares fell 4.8% to 289.85 on Tuesday after jumping 5.55% on Monday, arguably offering an early entry. Super Micro stock has a 317.50 buy point from a less-than-ideal double-bottom buy point.
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What To Do Now
The stock market rally had a modest pullback, but has shown real strength in November.
Investors should be significantly invested, taking advantage of the stream of buying opportunities in the past few weeks. At this point, many leading stocks are extended. A market pause would let some stocks forge new buy points or add-on entries.
The market rally is in a power trend, so investors can try to hold potential winners for longer, and be more willing to bet on aggressive growth plays. But stick to your sell rules.
Remember to look for new setups, updating 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 X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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