Dow Jones futures, S&P 500 futures, and Nasdaq futures were relatively unchanged overnight, indicating a cautious market sentiment. The stock market rebounded on Tuesday, led by the Nasdaq, as the 10-year Treasury yield retreated from 16-year highs. Despite the rebound, the market rally attempt has not yet shown a follow-through day. The performance of stocks is heavily influenced by Treasury yields. However, some stocks, such as Tesla, Meta Platforms, and Alphabet, are performing well and trading around buy points.
On Wednesday, Tesla made a bullish move, defying negative news. It joined IBD Leaderboard and SwingTrader, indicating its potential for growth. Other stocks, like Arista Networks and Synopsys, rose and were close to reaching possible buy points. Arista Networks was even named the IBD Stock Of The Day. All of these stocks, along with Meta Platforms, are on the IBD 50, and Arista Networks and Meta Platforms are already on Leaderboard. SNPS stock is on IBD Long-Term Leaders.
Dow Jones futures today are slightly lower compared to fair value, while S&P 500 futures lost a fraction and Nasdaq 100 futures tilted higher. The 10-year Treasury bond yield has edged lower to 4.71%. It’s important to note that overnight movements in futures do not always translate into actual trading during regular stock market sessions.
On Wednesday, the stock market rally attempt continued, with the Nasdaq having a strong session. The Dow Jones Industrial Average rose 0.4%, the S&P 500 index climbed 0.8% led by Tesla stock, and the Nasdaq composite jumped 1.35%. Market breadth was modestly positive, and the small-cap Russell 2000 erased solid intraday losses to close essentially flat. The Invesco S&P 500 Equal Weight ETF rose 0.6% after hitting a fresh six-month low intraday.
The 10-year Treasury yield climbed nearly 7 basis points to 4.735%, but this was a slowdown compared to the previous two days when it soared 23 basis points. The decline in the Treasury bond yield was triggered by a weak ADP employment figure. The Labor Department’s August jobs report is expected on Friday morning.
In the energy sector, U.S. crude oil prices tumbled 5.6% to $84.22 a barrel, following data from the Energy Information Administration showing a decline in U.S. crude stockpiles but an unexpected jump in gasoline supplies. Gasoline futures also plunged 6.9%, reaching the lowest level since December 2022.
While the Nasdaq and S&P 500 advanced, they remained just inside days after Tuesday’s sell-off. The Nasdaq has been in a stock market rally attempt for six days and could stage a follow-through day soon. However, Wednesday’s price gain was not accompanied by an increase in Nasdaq volume. On the other hand, the S&P 500 and Dow Jones have just started their rally attempts. Most recent leading stocks and sectors are struggling, with energy stocks being particularly affected by the drop in oil and gasoline prices.
In terms of exchange-traded funds (ETFs), growth ETFs like the iShares Expanded Tech-Software Sector ETF and VanEck Vectors Semiconductor ETF rose, while ARK Innovation ETF and ARK Genomics ETF experienced mixed performance. The SPDR S&P Metals & Mining ETF declined, while the Global X U.S. Infrastructure Development ETF and U.S. Global Jets ETF gained. The SPDR S&P Homebuilders ETF rebounded, while the Energy Select SPDR ETF tumbled. The Health Care Select Sector SPDR Fund, Industrial Select Sector SPDR Fund, and Financial Select SPDR ETF also saw varied performance.
In terms of individual stocks, Tesla stock saw an aggressive buy signal as shares jumped 5.9% and moved above the 50-day line in higher volume. Meta stock rose 1.5% and moved back above the 50-day line, while Google stock climbed 2.1% and rebounded from the 50-day line. Arista Networks stock edged up 0.6% and moved slightly above the 50-day line, while Synopsys stock gained 2.35% after rebounding from the 50-day line.
The stock market session on Wednesday was mixed, with even the Nasdaq experiencing low-volume inside day trading. The market remains strongly influenced by the 10-year Treasury yield, which is currently in an almost vertical ascent. Tesla and Google stock offered buying opportunities on Wednesday, but their performance will depend on the overall market rally. It is essential for investors to continue seeking out relative winners in this current market environment. Stocks like Meta Platforms, Arista Networks, and Synopsys could potentially lead in the next uptrend.