Dow Jones Futures: S&P 500 Reclaims Key Level As Tesla Soars; Apple Flashes Buy Signal

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Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally had a strong Wednesday, with techs leading the way even as Treasury yields continued to rise.




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Tesla Berlin deliveries kicked off, sending Tesla stock sharply higher, extending a win streak to six sessions. Nvidia (NVDA) CEO Jensen Huang gave a keynote address at the annual GTC conference on Tuesday, which also was the chipmaker’s analyst day. Nvidia stock fell, but after running up ahead of the news.

Adobe (ADBE) released earnings after Tuesday’s close. Adobe earnings topped fiscal Q1 views but Q2 guidance was light. ADBE stock fell modestly after rising 2.8% in Tuesday’s session.

Apple (AAPL) rose yet again, reclaiming its 50-day moving average. Apple stock is right at a trendline buy point. Google parent Alphabet (GOOGL) and Microsoft stock flashed buy signals.

Tesla (TSLA), Microsoft (MSFT) and Nvidia stock are on IBD Leaderboard. Google stock and Microsoft are on IBD Long-Term Leaders. Tesla stock is on the IBD 50.

The video embedded in this article discussed Tuesday’s market action as well as analyzed Jackson Financial (JXN), Tesla and Apple stock.

Dow Jones Futures Today

Dow Jones futures rose a fraction vs. fair value. S&P 500 futures edged higher and Nasdaq 100 futures edged lower.

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

The stock market rally once again built momentum during the session, closing near intraday highs.

The Dow Jones Industrial Average climbed 0.7% in Tuesday’s stock market trading. The S&P 500 index rose 1.1%, with Tesla stock the No. 1 gainer. The Nasdaq composite jumped nearly 2%. The small-cap Russell 2000 advanced 0.9%.

The 10-year Treasury yield climbed 6 basis points to 2.37%, the highest since May 2019. That’s after surging 17 basis points on Monday amid Fed chief Jerome Powell’s hawkish comments. The 10-year Treasury yield also ran up sharply in the prior two weeks.

U.S. April crude oil prices dipped 0.3% to $111.76 a barrel, paring earlier losses, on its expiration day. May crude futures fell 0.6% to $109.27.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.9%, while the Innovator IBD Breakout Opportunities ETF (BOUT) edged up 0.1%. The iShares Expanded Tech-Software Sector ETF (IGV) popped 2.5%, with MSFT stock and Adobe key holdings. The VanEck Vectors Semiconductor ETF (SMH) advanced 0.7%. Nvidia stock is a major SMH component.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) jumped 4.7% and ARK Genomics ETF (ARKG) 4.3%. Tesla stock remains the No. 1 holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) dipped 0.6% and the Global X U.S. Infrastructure Development ETF (PAVE) inched up 0.1%. U.S. Global Jets ETF (JETS) ascended 2.2%. SPDR S&P Homebuilders ETF (XHB) nudged 0.1% higher. The Energy Select SPDR ETF (XLE)  fell 0.7% and the Financial Select SPDR ETF (XLF) rose 1.6%. The Health Care Select Sector SPDR Fund (XLV) closed just above break-even.


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Nvidia Stock

Nvidia announced major updates to its Omniverse platform for metaverse applications at its GTC conference. It also unveiled new hardware and software, including a CPU for data centers.

China EV giant BYD (BYDDF) and U.S. startup Lucid Motors (LCID) will use Nvidia’s Drive AI architecture for autonomous driving purposes.

Nvidia stock dipped 0.8% to 265.24.

Shares flashed an aggressive entry late last week as they crossed above the fast-falling 50-day line and broke a steep down-sloping trendline. NVDA stock appears to be pausing around its early February highs.

Nvidia stock still needs to make more progress before MarketSmith recognizes a deep consolidation, which would have a buy point of 346.57.


Tesla Vs. BYD: Which Booming EV Giant Is The Better Buy?


Tesla Berlin Begins Deliveries

The Tesla Berlin plant officially began deliveries Tuesday, with 30 Model Ys handed over in an event with CEO Elon Musk on hand. The Berlin facility has a planned annual capacity of 500,000 vehicles. But the plant doesn’t appear to be fully finished, with batteries imported from Tesla Shanghai for the foreseeable future. So production will likely slowly ramp up.

Tesla stock leapt 7.9% to 993.98. Shares reclaimed their 200-day and 50-day lines last week. Even if investors saw those as an aggressive entry, the stock is well extended from those levels. TSLA stock has an official buy point of 1,208.10, according to MarketSmith analysis, with a shallow trendline early entry around 1,150. Perhaps shares could top the 1,000 level and form a handle.

The relative strength line for Tesla stock is well off highs, but definitely improving over the past week.

Apple Stock

Apple stock rose 2.1% to 168.82, back above its 50-day line. Like Tesla stock, the iPhone giant has rallied for six straight sessions. AAPL stock has a double-bottom base with an official 176.75 buy point. However, investors could use a trendline from the Jan. 4 peak to spot an early buy point slightly above Tuesday’s close.

The RS line, the blue line in the charts provided, is not far from a high.

Microsoft Stock

Microsoft stock rose 1.6% to 304.06, edging above its 200-day moving average after topping its 50-day line late last week. The official buy point is 349.77. Investors could buy MSFT stock as an early entry or to start a Long-Term Leader position.

Google Stock

Google stock climbed 2.8% to 2,797.36. GOOGL stock reclaimed its 200-day line, but a little more convincingly than Microsoft did. This is also an early entry or Long-Term Leader buy point. The official entry is 3,031.03 on a consolidation going back to early February, though Google stock has been moving sideways.

Market Rally Analysis

The stock market rally is showing strong action so far this week after last week’s character-changing surge.

On Monday, the major indexes pulled back but showed constructive action. They closed well off lows, holding above or right around their 50-day moving averages. On Tuesday, the stock market rally had solid gains, clearing Monday’s highs. The S&P 500 moved above its 200-day moving average. The Nasdaq reclaimed the 14,000 level.

Technology led the way, from megacaps such as Apple stock to software and chips, with even aggressive names shining despite still-rising Treasury yields. Many of Tuesday’s big winners continued to be beaten-down former leaders such as ADBE stock that are still below their 200-day lines. But Tesla is mounting a comeback while Microsoft and Google stock are flashing buy signals. Early tech buying opportunities such as Rambus (RMBS) and Arista Networks (ANET) are continuing to advance.

But gains were broad-based Tuesday. Financials were big winners. Defense names are on offense.

Energy paused as crude oil prices dipped, but they still look strong. Metals and mining firms were mixed, along with medical names, but they also are in good health, with many near buy points.

As with Apple and Tesla stock, the market rally has run up quite a bit over the past several sessions. So it wouldn’t be a surprise to see the major indexes pull back or move sideways for a time.


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What To Do Now

The market rally has flashed several bullish signals over the past six sessions, including follow-through days, reclaiming key technical levels and quality stocks flashing buy signals.

Investors should have been gradually adding exposure in recent days, taking advantage of buying opportunities. If the market rally and your holdings continue to do well, you can keep reducing your cash position.

Tech stocks are showing signs of leadership again, which is positive for growth-focused investors. But it’s a good idea to hold leading stocks from a variety of sectors. The market rally seems to be broad-based. Also, in a rising-rate environment, growth stocks face some challenges, especially those with rich valuations.

This is definitely a time to be working on your watchlists, with a close eye on stocks that are actionable or close to being so.

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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