Dow Jones Futures: Stocks Rise as Yields Fall, But More to Do; Race within the Tesla buying area

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures.




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Stocks rallied on Tuesday, led by the Nasdaq, as the 10-year Treasury yield retreated to a 16-year high. Tesla (D.S.L.A) made a good move on Wednesday as the EV giant pulled away from a string of bad news.

But the market rally effort did not go on for even a single day. Aside from the Nasdaq, Wednesday marked a day of rally attempts for the S&P 500 and Dow Jones. Stocks are clearly at the mercy of Treasury yields.

Along with Tesla, fellow Magnificent Seven shares Meta platforms (Meta) and Google Parents letters (Google) continue to outperform and trade around buy points. ANET stock and Summary (SNPS) rose to a key level., near potential buy points.

TSLA joined the stock IBD Leaderboard and SwingTrader on Wednesday. Arista Networks (Aneta) and meta platforms are already on the leaderboard. SNPS stock is among IBD’s long-term leaders. META Stack, Arista Networks, Tesla and Synapsis are among them IBD 50. Arista Networks was Wednesday’s IBD Stock of the Day.

Dow Jones Futures Today

Dow Jones futures are low and fair value. S&P 500 futures were flat and Nasdaq 100 futures rose 0.1%.

The 10-year Treasury yield fell to 4.71%.

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


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Stock market rally

The stock market rally attempt was alive and well on Wednesday, with the Nasdaq having a strong session.

The Dow Jones Industrial Average rose 0.4% in stock market trading on Wednesday. The S&P 500 index rose 0.8%, led by Tesla shares. The Nasdaq composite rose 1.35%.

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Market breadth was modestly positive after Wednesday’s poor readings.

Small-cap Russell 2000 closed basically flat, paring solid intraday losses.

Invesco S&P 500 Equal Weight ETF (RSP) rose 0.6%, hitting a new six-month intraday low.

The 10-year Treasury yield rose nearly 7 basis points to 4.735%, but after rising 23 basis points in the previous two days. Treasuries fell amid weak ADP employment numbers. The Labor Department’s August jobs report is due Friday morning.

U.S. crude oil prices fell 5.6% to $84.22 a barrel after data from the Energy Information Administration showed a decline in U.S. crude stockpiles and an unexpected improvement in gasoline supplies. Gasoline futures fell 6.9%, extending the sharpest decline since early August to the lowest level since December 2022.

The Nasdaq and S&P 500 advanced, but they were within days of Tuesday’s selloff.

Nasdaq, now six days into its stock market rally effort, could stage a follow-up day at any time. Wednesday’s price rally was strong enough to qualify as an FTD, but the Nasdaq block fell against Tuesday.

The S&P 500 and Dow Jones have broken recent lows earlier this week and started new rally attempts.

A few tech stocks hold discounts along with some others. But recent leading stocks and sectors have been struggling. Energy stocks fall on oil and gasoline prices.

ETFs

Among growth ETFs, the iShares Expanded Technology-Software Sector ETF (VAT) and VanEck Vectors Semiconductor ETF (SMH1.6% up. SNPS stock is in IGV and SMH.

Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK1.5% bounce and the ARK Genomics ETF (ARKGfell 0.8%. Tesla shares are the No. 1 holding across Arc Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) fell 0.9% and the Global X US Infrastructure Development ETF (sidewalk) received 1%. US Global Jets ETF (JETS) rose 2%. SPDR S&P Homebuilders ETF (XHB) again 1.45% Energy Select SPDR ETF (XLE) fell 3.3% and the Health Care Sector SPDR Fund (XLV) took 0.4%.

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Industrial Select Sector SPDR Fund (XLIrose 0.3%.

Fund Selection SPDR ETF (450.7% improved.


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Tesla stock

Tesla stock issued an aggressive buy signal on Wednesday. Shares rose 5.9% to 261.16, moving decisively higher above the 50-day line. A move above Wednesday’s high would provide another early entry from breaking the handle’s bottom. TSLA stock has an official 278.98 buy point from a cup-with-handle basis.

Bulls have shrugged off bad news, including a big decline in Q3 deliveries and hopes for the new, lower-cost base Model Y, an updated Model 3, the upcoming Cybertruck and speculative bets on self-driving cars, robots and more.

Meta share

Meta stock rose 1.5% to 305.58, above the 50-day line that has been trading tight for weeks. A consolidation buy point is 326.20, although investors can use 310.94 or 312.87 as initial entries. A 310.94 entry will become an official handle buy point on the daily chart after Thursday, but investors still prefer 312.87.

The corresponding strength line, the blue line on the charts provided, is at a record high. It reflects the performance of meta stocks against the S&P 500. The RS line hit a new high before the stock emerged and was particularly bullish.


The meta stock cliché leads potential breakouts in the market


Google Stock

Google shares rose 2.1% to 135.24, rebounding from the 50-day line and retaking the 133.74 shelf entry. According to MarketSmith analysis, the RS line for GOOGL stock is the highest since early 2022.

Arista stock

ANET shares were up 0.6% at 186.03, rising just above the 50-day from the 21-day line. Arista stock should have a flat base after this week with a 198.70 buy point. Investors can use Monday’s high of 189.90 as an initial entry for the networking company. RS line for ANET stock is very high.

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Summary stock

SNBS shares rose 2.35% to 461.32, recovering from a 50-day intraday low in the electronics-design software leader. Investors can use 471.15 as a buy point from a flat floor towards the end of May. RS tax is at a record high.


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What to do now

A mixed market session, with even the Nasdaq down, intraday, nothing to get excited about. The stock market is at the mercy of the 10-year Treasury yield, which is still on a vertical climb.

Shares of Tesla and Google offer buying opportunities on Wednesday. If the market rally revives from here, those entries have a good chance of working. But if the market falls, these names may pull back, even if they outperform the S&P 500.

Remember, in a market correction, relative winners can still be absolute losers.

However, investors should look for those relative winners. MetaStack, Arista Networks and Synapsis will be leading the next boom.

Read the big picture every day to stay in tune with market direction and leading stocks and sectors.

Follow Ed Carson on X/Twitter @IBD_ECarson and texts @edcarson1971 For stock market updates and more.

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