Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures.
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The stock market ended mixed Wednesday, amid a CPI inflation report and a big move by Google’s parent company. the alphabet (Google). The Nasdaq jumped to its highest level in 2023, while the S&P 500 made good progress.
Google flashed buy signals while touting its AI efforts to try and beat it Microsoft (MSFT). advanced micro devices (AMD), another AI play, has continued its huge bounce recently.
Aside from some huge techs and shaky software names, market action hasn’t been as strong as the Nasdaq suggested.
But the S&P 500 lagged behind the Nasdaq while the Dow Jones and the equal-weight S&P 500 ETF fell.
Finally, buying opportunities remain relatively light.
These are not reasons for a decline, but investors should temper their bullish enthusiasm.
earnings
Walt Disney (dis), Trade office (TTD), Robinhood Markets (hood), Double check (DV), Maxon Solar Technologies (Max), Sonos (I am) And Allegro Microsystems (ALGM) reported late Wed.
Disney’s earnings were mixed but streaming losses narrowed as price increases offset losses for Disney+ subscribers. DIS stock fell strongly after hours.
Trade desk outweighs opinions and face up. TTD stock rose slightly overnight after closing just below buy points.
DoubleVerify’s earnings and revenue topped. DV stock has emerged of late, indicating a return above the 50-day line.
Robinhood has topped expectations. HOOD stock rose modestly in an extended move but traded below the moving averages.
Maxeon Solar crushed EPS views and raised full-year EBITDA guidance. MAXN stock jumped late after bouncing from its 10-week line.
ALGM stock is up of late, thanks to strong Allegro Micro earnings. But the EV-exposed chipmaker is still recovering from its April short-selling.
Sonos stock is down as the smart speaker maker drops.
Microsoft stock is in IBD Long-Term Leaders. The video embedded in this article discussed Wednesday’s bull market action and analyzed Google stock, Flying wire (feather) And Exxon Enterprise (Axon).
Dow jones futures today
Dow futures rose against fair value, as DIS stock was a component of the Dow Jones index. S&P 500 and Nasdaq 100 futures rose 0.2%.
The Labor Department will release the April Producer Price Index and Weekly Unemployment Claims at 8:30 a.m. ET Thursday.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live
Google AI efforts
Google emphasized artificial intelligence at its annual developer conference on Wednesday. The internet giant said it would introduce artificial intelligence for search. Notably, Google has indicated how it will retain ads in search results.
Google shares jumped 4.1% to 111.75, hitting an eight-month high. GOOGL stock is in a range of 106.69 cup handle point initially cleared on April 6. Investors can also use the April 6 high of 109.17 as another entry.
Google is accelerating its AI efforts, in order to catch up Microsoft (MSFT), which used OpenAI’s ChatGPT technology for search and more.
MSFT rose 1.7% to 312.31, working on a narrow potential three-week base around a 52-week high.
AMD stock rose 2.1% to 97.06, although it pulled back from the morning high. Since the May 3 pullback due to weak guidance, AMD stock is up 19%, crossing the 50-day line and entering early. This bounce started with a report that AMD and Microsoft are collaborating on an AI processor. Progress continued even after Microsoft partially denied the report.
Google also announced a $1,799 foldable phone, the Pixel Fold.
Tesla vs. BYD: EV Giants Vy for the Crown, But Which One is a Better Buy?
Stock market rise
The stock market rally opened strong but largely fizzled out before GOOGL stocks supported the NASDAQ and S&P 500 again.
The Dow Jones Industrial Average fell 0.1% in stock market trading Wednesday. The S&P 500 advanced 0.45%. The Nasdaq Composite jumped 1%. Small Capital Russell 2000 rose 0.6%.
US crude oil prices fell 1.6% to $72.56 a barrel, snapping a three-day winning streak.
The 10-year Treasury yield fell 8 basis points, to 3.44%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) an advance of 0.65%. iShares Expanded Technology and Software ETF (IGV) was up 1.4%, with MSFT stock a major component. VanEck Vectors Semiconductor Corporation (SMH) gained 0.8%. AMD stock is the key to SMH holdings.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(advanced 1.4% and ARK Genomics ETF)ARKG) jumped 2.6%.
SPDR S&P Metals & Mining ETFs (XME(down 0.3% and the Global Infrastructure Development Fund (ETF) in the USA)cradle) slipped 0.5%. US Global Gates Foundation ETF (Planes) sank just over 1%. SPDR S&P Homebuilders ETF (XHB) decreased by 0.2%. Energy Defined Fund SPDR ETF (xle(down 1.1% and the SPDR Healthcare Sector Selection Fund)XLV) increased by 0.3%.
SPDR Financial Selection Fund (45) decreased by 0.6%. SPDR S&P Regional Banking ETF (Creates) lost 1%. KRE is down 3.4% so far this week.
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Market rally analysis
The Nasdaq finally moved above its 2023 highs on Wednesday, which is what growth investors have been waiting for weeks. Trading volume was higher than on Tuesday.
The Nasdaq faded from the open, but bounced back from mid-afternoon. Much of the credit goes to Google stock, along with Microsoft, AMD, and Amazon.com (AMZN) And apple (AAPL).
The S&P 500 rebounded to make decent gains but did not confirm the Nasdaq moved to a new high. This reflects slight divergence so far this month.
The difference between megacap technologies and the broader market also persists. Investors modestly beat losers on the NYSE and Nasdaq, but it didn’t scream out as a solid, broad advance.
First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEWIt rebounded from the 50-day line, up about 0.6%, but still off 2023 highs. The actual Nasdaq 100 rose 1.1%, reaching another 2023 high.
Invesco S&P 500 Equal Weight Fund (RSP) closed fractionally lower, still below all of its major averages.
The big percentage winners in the Nasdaq 100 on Wednesday were mostly names like datadog (dog) And Zscaler (ZS) that retracts but is much lower than the highs.
So there wasn’t a lot of stock to buy.
Apart from Google shares, investors could have bought Celsius (CELH), Exact sciences (EXAS) or Lee Otto (L.I) on the difference in profits. Those gaps held, but the current market makes such purchases risky.
Fresh remains (latest) and Li Auto is a competitor BYD (I willBuy signals also flash.
FLYW stock made a nice move on the day after earnings, but faded below an obvious entry point.
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What are you doing now
Investors could have added exposure slightly on Wednesday, though it was hit or miss what worked. Staying mostly cash is a perfectly sound strategy. It is definitely not the time to invest heavily.
If the market continues to diverge or show a narrow breadth, it will be a cause for concern. But if the S&P 500 reaches new highs and market breadth shows real improvement, the rally could be poised to ramp up.
So investors have to be open minded, and not stick to a bullish or bearish mindset. Also, keep looking for new potential stocks. A lot of stocks have been created in the past few weeks.
Don’t forget earnings season. Yes, the huge companies are out of the way, but stocks are still making huge moves on earnings, and many of them are down. While CELH stock was hot, Airbnb (ABNB) And Exxon Enterprise (Axon) was The Biggest Loser on Wednesday.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
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