Dow Jones Futures: Apple, Tesla Lead As Rivian, Lucid Reverse; Nvidia Leads Earnings Movers

Dow Jones futures were little changed late Wednesday, along with S&P 500 futures and Nasdaq futures. Nvidia earnings were in focus overnight. The stock market rally retreated Wednesday despite positive moves from Apple stock and Tesla.

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Tesla (TSLA) rebounded even as Rivian Automotive (RIVN) sold off, falling for the first time since the RIVN IPO last week. Lucid Motors (LCID) retreated after LCID stock soared Tuesday.

Apple (AAPL) cleared a buy point.

Key Earnings

Nvidia (NVDA), Cisco Systems (CSCO), Sonos (SONO), Bath & Body Works (BBWI) and Victoria’s Secret (VSCO) reported earnings after the close.

Nvidia stock rose nearly 5% in overnight trade after Nvidia earnings and revenue topped views. NVDA stock fell 3.1% to 292.61 on Wednesday. Advanced Micro Devices (AMD) climbed 1% late after dipping 0.7% on Wednesday. Both Nvidia and AMD stock are consolidating at record highs after sharp moves over the past several weeks.

CSCO stock sank 6% overnight. Cisco earnings edged past views but revenue and guidance were weak. CSCO stock dipped 0.4% to 56.76 on Wednesday, now with a handle in its cup base, giving it a 58.73 buy point. Arista Networks (ANET) was little changed late as the Cisco networking rival works on a shelf.

SONO stock climbed 2% in extended trade after closing down 3%. High-end smart speaker maker Sonos missed on earnings and revenue, but gave a bullish outlook. SONO stock could reclaim the 50-day line and perhaps test recent short-term resistance, but investors might want to see a move above the 200-day line before taking an early entry.

BBWI stock rose 3% overnight after Bath & Body Works earnings topped views in its first report since the L Brands split into BBWI and VSCO. BBWI stock could clear a mini-consolidation — close to being a tight pattern — slightly above a double-bottom base. That could offer an add-on buy point or aggressive entry.

VSCO stock surged 12% overnight. Victoria’s Secret earnings results were mixed. After initially surging in early August on the spinoff, VSCO stock fell sharply. But it could break a trend line Thursday morning and get above its 50-day line, offering an aggressive entry.

Key Earnings Thursday Morning

Early Thursday, Macy’s (M), Kohl’s (KSS) and Chinese e-commerce giants Alibaba (BABA) and JD.com (JD) report earnings. Macy’s stock fell 4.5% Wednesday, but remains slightly extended. Kohl’s retreated 3.1%, backing off a buy point. BABA stock and JD.com are trying to break a long slump, with JD stock having more luck. But Alibaba sank 4.1% and JD.com 3% on Thursday.

Tesla, Nvidia and AMD stock are on IBD Leaderboard and the IBD 50. Apple and LLY stock are on SwingTrader. Apple stock was Wednesday’s IBD Stock Of The Day.

The video embedded in this article discussed the market rally action Wednesday and analyzed AAPL stock, Eli Lilly (LLY) and ZIM Integrated Shipping (ZIM).

Dow Jones Futures Today

Dow Jones futures were flat vs. fair value, even with CSCO stock a drag. S&P 500 futures climbed 0.1%. Nasdaq 100 futures rose 0.2%, helped by NVDA stock.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally Wednesday

The stock market rally fell modestly, but still not far from all-time highs.

The Dow Jones Industrial Average sank 0.6% in Wednesday’s stock market trading. The S&P 500 index lost 0.3%, with Target (TGT), Visa (V) and Mastercard (MA) suffering solid losses. The Nasdaq composite retreated 0.3%. The big-cap Nasdaq 100 closed just above break-even, led by Apple stock and Tesla. The small-cap Russell 2000 slumped 1.2%.

U.S. crude oil futures fell 3% to $78.36 a barrel.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 1.25%, while the Innovator IBD Breakout Opportunities ETF (BOUT) edged up 0.1%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 0.85%. The VanEck Vectors Semiconductor ETF (SMH) gave up 0.6%. Nvidia stock is a major SMH component, along with AMD.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 1.85% and ARK Genomics ETF (ARKG) 2.1%. Tesla stock is the top holding across ARK Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) fell 1.6% and Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.8%. U.S. Global Jets ETF (JETS) sank 0.65%. SPDR S&P Homebuilders ETF (XHB) dipped 0.1%, as housing retailers slumped while actual builders fared well. The Energy Select SPDR ETF (XLE) sank 1.5%, as crude oil futures fell solidly. The Financial Select SPDR ETF (XLF) declined 1.15%.

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Apple Stock In Buy Zone

Apple stock rose 1.65% to 153.49, just above a 153.26 cup-with-handle buy point, according to MarketSmith analysis. The relative strength line is starting to turn up, but from a four-month low. At best, it’s been moving sideways since August 2020. That reflects Apple stock’s slight underperformance vs. the broader market. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.

Rivian Stock Reverses

Rivian stock fell 15% to 146.07, the first decline in the electric-pickup maker’s short history. RIVN stock is still nearly double its $78 IPO price from just over a week earlier.

Lucid stock sank 5.35% to 52.55, after trading up more than 10% before Wednesday’s open. That followed Lucid Motors’ 24% spike Tuesday after reporting a big jump in Lucid Air reservations. LCID stock still has doubled from a 25.76 buy point.

Meanwhile, Tesla stock rose 3.25% to 1,089.01. Perhaps investors are shifting funds from Rivian stock and Lucid stock and back into Tesla. Perhaps investors are taking in stride Elon Musk’s ongoing TSLA stock sales. Musk is about halfway to selling 17 million shares of Tesla stock, which would be 10% of his holdings.

Rivian stock and Lucid extended losses overnight, while Tesla was little changed.

Market Rally Analysis

The stock market rally remains right below record highs for the S&P 500 and Nasdaq.

With Apple and Tesla leading big-cap Nasdaq components, the Nasdaq 100 is 5.7% above its 50-day line. The Nasdaq composite is 5.2% above the 50-day. That’s not at the 6%-7% level that suggests growing risk of a fresh pullback, but it’s not far off either.

The Dow Jones and Russell 2000 are lagging, just above their 21-day moving averages. But arguably that is constructive action given the recent run-up. A Nasdaq retreat to the 21-day line could be healthy for the market rally. Simply pausing around record highs for a couple weeks would serve that purpose.

Apple and Tesla stock serve to cover up some market rally weakness, even in growth. Rivian stock and Lucid stock were greatly extended and due for a pullback, as the EV sector has been getting a little frothy. Software and chips also pulled back.

Financials had a bad day, led by Visa and various payment stocks but banks also struggled. Energy and other commodity plays fell back as underlying commodity prices retreated.

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What To Do Now

The stock market rally continues to be in good shape. But a lot of stocks are extended. Some whipsaw action can lure investors into stocks on the upswing, only to quickly pull back. Airbnb (ABNB) just nudged past a new buy point Wednesday morning, but reversed for a 3.8% loss.

Investors may want to simply hold current positions, aside from trimming some extended winners and cutting out losers.

With so many new IPOs among the leaders in recent months, investors have to watch out for big reversals around buy points and round-tripping big gains. You have to balance, based on your investing style, letting IPO stocks run and pull back vs. locking in at least partial buys.

If you do make new buys, early entries are a good idea, but don’t jump the gun. Wait a few minutes of regular-session trading, especially after earnings or big news, to see if the premarket euphoria or gloom is temporary.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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