Dow Jones futures, along with S&P 500 futures and Nasdaq futures, fell slightly overnight, signaling a potential slide for the stock market rally. The decline was initially triggered by tighter U.S. restrictions on AI chip exports to China, which impacted shares of Nvidia (NVDA). However, stocks rebounded off lows to close mixed, with small caps leading the way, despite surging Treasury yields.
Several stocks are worth watching near buy points, including Fair Isaac (FICO), Super Micro Computer (SMCI), Woodward (WWD), DraftKings (DKNG), and Arista Networks (ANET). While none of these stocks have imminent earnings, Arista is less than two weeks away. On the other hand, J.B. Hunt Transport Services (JBHT), United Airlines (UAL), and Interactive Brokers (IBKR) fell overnight in negative reactions to earnings or guidance.
ASML (ASML) is set to kick off earnings for chip-equipment makers early Wednesday, followed by Lam Research (LRCX) on Wednesday night and Taiwan Semiconductor (TSM) on Thursday morning. However, all eyes are turning to Tesla (TSLA), which reports Wednesday night. TSLA stock has held up well and remains close to buy points, as investors look to future growth drivers. Tesla stock, Nvidia, DraftKings, and Woodward are featured on the IBD Leaderboard, while FICO stock is on IBD Long-Term Leaders. Nvidia, Tesla, DraftKings, Super Micro, and Arista Networks are included in the IBD 50, and Tesla, Nvidia, and SMCI stock are part of the IBD Big Cap 20. Fair Isaac was highlighted as Tuesday’s IBD Stock Of The Day.
In overnight trading, Dow Jones futures fell 0.1% vs. fair value, S&P 500 futures retreated 0.2%, and Nasdaq 100 futures declined 0.1%. NVDA stock dropped 1%. Chinese economic data came in stronger than expected, with third-quarter GDP rising 4.9% compared to a year earlier, retail sales growing 5.5% in September, and industrial production climbing 4.5%. The 10-year Treasury bond yield ticked down to 4.83%, while crude oil futures rose over 2%.
It’s important to note that overnight action in Dow futures and elsewhere does not always translate into actual trading in the next regular stock market session.