Dow Jones futures were little changed overnight, while S&P 500 futures and Nasdaq futures rose slightly. Robinhood Markets (HOOD) and HubSpot were the main sources of revenue.
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Stocks fall after strong start; AXON, Halozyme and UTHR in the spotlight
The stock market opened sharply higher on Wednesday, but gains disappeared and turned into losses. Nvidia (NVDA) helped lead the downward turnaround, after mixed results, guidance and commentary from AI server maker Supermicrocomputer (SMCI).
Other Magnificent Seven stocks saw their profits fall or fall even further, Meta platforms (META-) Apple (AAPL certificate), Microsoft (MSFT), Tesla (TSLA) and reportedly Amazon.nl (AMZN) encountered resistance at key levels.
The attempted rally in the stock market is still ongoing, but it was not a good sign.
Dow Jones Futures Today
Dow Jones futures were flat vs. fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.3%.
The yield on 10-year government bonds fell to 3.92%.
At 8:30 a.m. ET, the Labor Department will release weekly jobless claims numbers, which could signal whether July’s weak jobs report reflected short-term weather conditions.
Please note that trading Dow futures and other markets overnight does not necessarily result in actual trading during the next regular trading session.
Nvidia shares are on Leaderboard. Microsoft shares are on IBD Long-Term Leaders.
Key Wins
McKesson (MCK), AppLovin (APP), HubSpot (NAVEN), Dutch Bros (BROS) and Robinhood reported Wednesday evening.
HubSpot jumped on gains while Dutch Bros shares fell. McKesson shares, which were reportedly closing in a buy range, fell sharply.
AppLovin, which initially fell late in the day, edged higher. Robinhood shares rose modestly amid the toss-and-turn trading.
Thursday early, Shark Ninja (SN) and Eli Lilly (LLY) are on the program.
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Stock market rally attempt fails
The stock market rally turned lower after a strong opening. The Dow Jones Industrial Average fell 0.6% in Wednesday’s stock market trading. The S&P 500 index fell 0.8%. The Nasdaq Composite fell 1.05%. The small-cap Russell 2000 fell 1.4%.
The Dow Jones and Russell 2000 again encountered resistance at the 50-day line. So did the Invesco S&P 500 Equal Weight ETF (RSP), which fell 0.7%.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) was down 0.7% from its 200-day line.
Wednesday marked day two of an attempted stock market rally. The rally is intact until the major indexes undermine their Monday lows, but Wednesday’s downward reversal was not encouraging.
While there are winners, including Fortune (FTNT), Shop (STORE), Axon Company (AXON) and Exelixis (EXEL) there were many losers, notably Super Micro and Airbnb (ABNB).
US crude oil prices rose 2.8% to $75.23 a barrel.
The 10-year US Treasury yield rose eight basis points to 3.97%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.6%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.2%, with Microsoft shares as a major component. The VanEck Vectors Semiconductor ETF (SMH) fell 2.75%, with Nvidia shares as the dominant holding.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 1.8% and ARK Genomics ETF (ARKG) fell 2.5%. Tesla shares remain a notable holding in Ark Invest’s ETFs. Cathie Wood’s Ark also owns some HOOD stock.
SPDR S&P Metals & Mining ETF (XME) gave up 1.2%. SPDR S&P Homebuilders ETF (XHB) lost 2.6%. The Energy Select SPDR ETF (XLE) rose 0.4%. The Health Care Select Sector SPDR Fund (XLV) lost 1%. Eli Lilly shares are the No. 1 holding in XLV, with McKesson also included.
The Industrial Select Sector SPDR Fund (XLI) lost 0.5%. The Financial Select SPDR ETF (XLF) rose slightly by 0.1%.
Time The Market with IBD’s ETF Market Strategy
Magnificent Seven stocks struggle
Nvidia shares rose 4.4% on Wednesday morning but ended down 5.1% at 98.95 in an ugly, bearish, outside reversal day. It was the lowest close since May 22, just before the earnings gap broke out.
Nvidia ally Super Micro missed earnings and gave a low EPS forecast, but gave optimistic revenue targets. Super Micro also said during its earnings call that Nvidia won’t begin meaningful deliveries of Blackwell’s next-generation AI chips until early 2025, following recent reports of Blackwell production delays. Shares of SMCI fell 20% on Wednesday.
Apple shares rose 1.3% to 209.86 but faced resistance at the rising 50-day line.
Meta shares fell just over 1% to 488.92 before falling back around the 50-day line.
Tesla shares fell 4.4% to 191.82, hitting resistance again at the 200-day line after falling below that key level on Monday. TSLA shares have erased their massive run from late June to early July.
Microsoft shares fell 0.3% to 398.43, failing to close above its 200-day high for the second straight session after hitting it intraday.
Amazon shares rose 0.55% to 162.82, but then fell back toward the 200-day line.
Google shares rose 0.4% to 158.94, slightly above the 200-day line but well below the 50-day line.
As Magnificent 7 stumbles, ‘S&P 493’ does so for first time since 2022
Market rally analysis
Wednesday was a great example of why investors shouldn’t rush back into a market on the first uptick. Tuesday saw an attempted rally in the stock market, albeit with a late-hour fade. On Wednesday, a strong opening quickly turned into losses for major indices and stocks.
Perhaps the rally attempt will resume soon, or perhaps the market will fall or move sideways for a few weeks or months.
Don’t try to guess when a new market uptrend will occur. The important thing is to be ready when it finally does. Keep working on watchlists, and focus on raw talent — relative strength — versus polished charts.
Read The Big Picture every day to stay up to date on market developments and the most important stocks and sectors.
Follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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