Stock Market Update: Dow Jones Futures Rise Slightly as Adobe Earnings Headline
Overview
The stock market rally retreated as another hot inflation report sent Treasury yields sharply higher. The major indexes suffered modest losses, largely due to Microsoft (MSFT), Apple (AAPL), Google parent Alphabet (GOOGL), and Amazon.com (AMZN).
Fellow Magnificent Seven plays Nvidia (NVDA) and Tesla (TSLA) were notable losers, but their charts look quite different. Market breadth overall was weak, with small caps hammered.
Microsoft stock flashed a buy signal Thursday. So did Google stock, with some caveats. Meanwhile, Arista Networks (ANET), Ares Management (ARES), and HubSpot (HUBS) are close to forging new bases.
Dow Jones Futures Today
Dow Jones futures rose 0.15% vs. fair value. S&P 500 futures climbed 0.1%. Nasdaq 100 futures edged higher, even with Adobe stock (ADBE) weighing on techs.
The 10-year Treasury yield dipped to 4.27%. Bitcoin fell solidly down to below $68,000.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Earnings
Adobe earnings slightly beat views but the software giant guided just below consensus for current-quarter revenue. ADBE stock sold off overnight, even as Adobe announced a $25 billion buyback. Ulta Beauty (ULTA) reported Thursday night, and Jabil (JBL) and highflier GigaGloud Technology (GCT) reported early Friday.
Stock Market Rally
The stock market rally lost ground Thursday as a stronger-than-expected producer price index pushed up Treasury yields and continued to chip away after Fed rate-cut expectations.
The Dow Jones Industrial Average fell 0.35% in Thursday’s stock market trading. The S&P 500 index and Nasdaq composite slipped 0.3%. The Dow and S&P 500 are above their 10-day moving averages, with the Nasdaq above its 21-day line.
But a lot of that reflected Microsoft and some other megacaps pushing higher. MSFT stock, easily the world’s most valuable company at $3.16 trillion, rose 2.4%. Apple stock ($2.67 trillion), also a Dow Jones, S&P 500 and Nasdaq component, climbed 1.1%. Amazon stock ($1.86 trillion) and Google ($1.78 trillion), advanced 1.2% and 2.4%, respectively.
Market breadth was anemic Thursday, with losers decisively besting winners. The small-cap Russell 2000 tumbled 2%, cutting below the 21-day moving average and now clearly below the late December highs.
Stocks Near Buy Points
Microsoft stock popped 2.4% to 425.22, hitting a record high in above-average volume. Shares cleared a short consolidation that would have become a flat base after Friday. Investors could still use 420.82 as a legitimate buy point. Shares have rebounded this week from the 10-week line.
Google stock climbed 2.4% to 143.10, moving above the 50-day moving average. That offered an early entry. GOOGL stock has an official 153.78 consolidation buy point.
Arista stock rose 1.2% to 284.02, continuing this week’s bounce from the 50-day and 10-week lines. Shares are on track to have a flat base at the end of the week.
Ares stock edged down 0.75% to 132.78 on Thursday, continuing to find support at the 21-day line. After a prior breakout, the investment manager has been consolidating tightly since early February.
HubSpot stock edged up 0.8% to 630.01. Shares are up 4.2% this week, bouncing from the 10-week line. HUBS stock is just above a downward-sloping trendline, offering an early entry. After Friday, the marketing software maker is on track to forge a base-on-base formation with a 660 buy point.
Tesla and Nvidia Stock
Tesla stock fell 4.1% to 162.47 in Thursday’s trading, while Nvidia slumped 3.2% to 879.44. Tesla is breaking down, tumbling to a 10-month low. Nvidia stock is still holding its 10-day line.
But while Nvidia is still holding up, a lot of other chip names are slashing or erasing recent gains. Nvidia holds its annual GTC conference next week, with its latest AI and chip advances taking center stage.
Market Rally Analysis
The stock market rally is pausing right now. When the major indexes are moving sideways, some stocks will flash buy signals but often will soon pull back, testing or undercutting the entries.
It may be a time for investors to pause as well, holding significant exposure but with cash on hand.
Cut losses quickly and consider taking some profits. The major indexes had modest declines, but a number of leading techs were down 3%-5%. Consider what would happen if the Nasdaq were to drop to the 50-day moving average or worse.
If the market moves higher again, especially after a longer pause, a number of leading stocks will offer buying opportunities.
The key is to stay engaged and be prepared. Have your watchlists up to date — and your exit strategies.
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