Dow Jones futures fell modestly on Wednesday morning, along with S&P 500 futures and Nasdaq futures. Advanced Micro Devices (AMD) overnight earnings after the Federal Reserve concluded its two-day meeting on Wednesday afternoon.
X
The stock market’s rally attempt had a quiet encouraging session, with major indices retrieving higher gains from the morning slump. Nvidia shares hit recent lows on Tuesday morning, but it pared losses. Market breadth was excellent. But the slide was not broken.
Arista Networks (Aneta) was a big winner on Tuesday, moving toward record highs on earnings after falling last week. Meta platforms (Meta) Capital Expenditure Plans. Pinterest (Pins) and Cameco (CCJ) There is also a gap in income. All flash buy signals, risks are now raised.
Tesla (D.S.L.A) rose modestly as a jury found that Autopilot was not at fault in a fatal crash.
But still ELF is beautiful (ELF) dipped in earnings on Wednesday night. Nvidia shares hit recent lows on Tuesday morning, but it pared losses.
Dow Jones Futures Today
Dow Jones futures fell 0.35%. fair value. S&P 500 futures fell 0.4%. Nasdaq 100 futures were down 0.4%. AMD stock is a Nasdaq 100 stock.
The 10-year Treasury yield rose a few basis points to 4.9%.
Crude oil futures rose 2%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
AMD revenue
Nvidia (NVDA) rival AMD reported better-than-expected third-quarter earnings and sales. AMD offered weak guidance, but refined the AI concepts. AMD stock fell slightly early Wednesday. Shares rose 2.4% to 98.50 on Tuesday, but are still below the 50-day and 200-day lines.
Paycom Software (PAYC) topped EPS views, but missed revenue and Q4 guidance. PAYC stock fell more than 30%.
FDA Panel Mules Gene-Editing Therapy
Meanwhile, an FDA advisory panel had generally favorable views on the first gene therapy treatment for sickle cell disease. Crispr treatment (CRSP) and Vertex Pharmaceuticals (VRTX) unusually, the panel did not vote on whether to recommend treatment. CRSP stock rose nearly 10% in early Wednesday trading after being flat throughout Tuesday. Shares of VRTX rose 1.3% to 362.11 on Tuesday, breaking above a 50-day line. Vertex stock is again near the 367 buy point, but earnings are due next week.
Tesla Autopilot wins
Tesla shares rose 1.8% to 199.96 on Tuesday, moving to a five-month high after winning a lawsuit over Autopilot in a fatal 2019 crash in Riverside County, Calif. This is the first in a series of alleged lawsuits involving the EV company’s driver assistance software. . TSLA stock, up with the broader market, is still below its 200-day line.
China EV sales
Wednesday morning, Tesla (D.S.L.A) China competitors Li Auto (LI), Expeng (XPEV) and Neo (NIO) October deliveries announced. Li Auto deliveries hit 40,000 for the first time. XPeng deliveries crossed 20,000 and hit a new record. Neo sales rose against September.
EV and battery giant BYD (I will do) October sales must be reported by Thursday morning.
XPEV shares rose solidly early on Wednesday, while Li Auto and Nio rose while BYD was not trading. All four EV makers fell 3%-4% on Tuesday, along with many Chinese stocks, following weak Chinese economic data.
NVDA stock is in motion IBD Leaderboard. CCJ stock is on SwingTrader. Arista Networks, Nvidia and LI stocks are among the IBD 50. ANET shares IBD Big Cap 20. Cameco was Tuesday’s IBD Stock of the Day.
A video embedded in the article analyzes Tuesday’s market action and ANET stock, Cameco and ELF Beauty.
Fed meeting results
The Fed will release its policy meeting announcement at 2pm ET, with Fed Chair Jerome Powell speaking at 2:30pm. Markets see no chance of a rate hike on Wednesday, and give only moderate odds for a December move. Fed policymakers, including some hawks, have made it clear that longer-term Treasury yields have reduced the need for official rate hikes.
Expect the Fed’s policy statement and Fed Chair Powell to reinforce that message, while leaving the door open for more tightening.
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Stock market rally
The stock market’s rally attempt came from morning lows to finish higher on Tuesday.
The Dow Jones industrial average rose 0.4% in stock market trading on Tuesday. The S&P 500 index advanced 0.65%, with ANET stock easily the best performer. The Nasdaq composite gained 0.5%.
Nvidia shares fell 4.7% on Tuesday morning on reports that $5 billion worth of AI chip orders from Chinese firms may have to be canceled due to tighter US restrictions. But the AI chip leader again closed down 0.9% at 407.80.
Market breadth was better on Tuesday, with winners comfortably beating losers. New lows, of course, continued to crush new highs.
The small-cap Russell 2000 rose 0.9%. Invesco S&P 500 Equal Weight ETF (RSP) rose 0.8% and the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEWtook 0.9%.
Tuesday marked the third day of an attempted stock market rally on the Nasdaq and the second for the S&P 500 and Dow Jones. A Nasdaq follow-through day could come at any time to confirm a new rally.
The compound recovered the 200-day line on Tuesday, but several resistance levels loomed. Other indices are below the 200-day line.
Meanwhile, many stocks are not in good shape right now.
US crude oil prices fell 1.6% to $81.02 a barrel, down 10.8% for the month.
The benchmark 10-year Treasury yield was flat on Tuesday at 4.87%, but rose 30 basis points in October, the sixth straight monthly gain. Because the Federal Reserve takes its cue from the 10-year yield, rather than the other way around, it’s unclear whether the Fed’s meeting announcement and Powell’s have had the impact they’ve had over the past two years.
ETFs
iShares Expanded Technology-Software Sector ETF (VAT) rose 1.2%. VanEck Vectors Semiconductor ETF (SMH0.7% improved. Nvidia stock is the largest holding in SMH, with AMD stock also a significant component.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) accumulated 2.3% and the ARK Genomics ETF (ARKG) rose 2.6%. Tesla shares are a major holding across ArcInvest’s ETFs.
SPDR S&P Metals & Mining ETF (XMEfell 0.6%. SPDR S&P Homebuilders ETF (XHBincreased by 1.2%. Energy Select SPDR ETF (XLErose 0.3% and the Health Care Sector SPDR Fund (XLVrose 0.6%. VRTX stock is an XLV holding.
Industrial Select Sector SPDR Fund (XLIUp 0.7%. Fund Selection SPDR ETF (45) rose 1.1%.
Five Best Chinese Stocks to Watch Now
Gap of shares in earnings
ANET shares rose 14% to 200.37, clearing a 198.46 buy point from a nasty double-bottom base. With a decisive break above the 50-day line, Tuesday morning was already actionable. The relative strength line hit a new high. Last week, Arista stock fell after key customer Meta signaled lower-than-expected capital spending. But late Monday, the networking giant reported better-than-expected Q3 results and raised Q4 revenue guidance. Arista revenue rose 46% in the second quarter from a year earlier, and EPS was up 20% in the 11th quarter.
CCJ stock rose 8.1% to 40.91, near the top of a short consolidation from the 50-day line. Investors can use 42.16 as an official buy point, but can also operate from its Oct. 25 high of 39.77. Uranium producer Cameco reported a nearly 1,000% jump in revenue from a year ago, while also raising sales guidance.
Binance stock rose 19% to 29.88, vaulting above the 50-day and 200-day lines, above key resistance levels around 29. It can work together with official buy point of 30.86. Pinterest reported rising profits and an 11% revenue gain. User growth is also at the top of views. The social media platform offered some positive Q4 guidance.
In all these cases, investors could have bought these shares on Tuesday. However, buying earnings gaps in a market correction has other risks. At this stage, investors should wait to see if these stocks can make handles or higher handles.
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What to do now
The stock market is trying to bottom out, and a bullish attempt is underway. But now it is a market correction.
If there’s a follow-up day in the future, investors should look for something to buy, whether it’s a stock or a broad ETF. But there is no reason to rush.
Confirmed market rallies already don’t work. As long as Treasury yields remain on the rise, it’s hard to see stocks going on a meaningful run.
But it’s definitely time to make watch lists. Look for stocks that set or set a minimum to set.
Read the big picture every day to stay in tune with market direction and leading stocks and sectors.
Follow Ed Carson on X/Twitter @IBD_ECarsonAt threads @edcarson1971 and Bluesky at @edcarson.bsky.social For stock market updates and more.
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