Dow Jones futures were little changed after hours, while S&P 500 futures and Nasdaq futures rose modestly. Broadcom (AVGO) and Costco Wholesale (COST) reported earnings late Thursday.
Broadcom surged overnight on results, signaling a breakout. Fellow AI chip play Arm Holdings (ARM) flashed an aggressive entry in Thursday’s regular session.
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The stock market rally retreated Thursday, with small caps leading the downside. The Nasdaq and S&P 500 are still just below record highs, even with Adobe (ADBE) selling off on weak guidance.
Nvidia (NVDA) edged lower from key levels. Microsoft (MSFT) is moving toward a buy point. Tesla (TSLA) and most other megacaps were little changed, but generally extended.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Microsoft stock is on IBD Long-Term Leaders. Nvidia stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures were roughly flat vs. fair value. S&P 500 futures rose 0.1% and Nasdaq 100 futures gained 0.4%. Costco stock and Broadcom are both S&P 500 and Nasdaq 100 members.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Broadcom Earnings
Broadcom earnings slightly beat fiscal Q4 views while revenue just missed. The AI chip and software giant gave solid guidance for fiscal Q1 and raised its dividend by 11%.
Broadcom stock leapt 12% in extended trade. That signals a Friday gap-upwell above a 185.05 buy point from a double-bottom base right next to another consolidation. AVGO stock fell 1.4% to 1347.34 in Thursday’s regular session.
Nvidia stock edged higher late. Shares declined 1.4% on Thursday to 137.34, pulling back from just below the 50-day line, 140.76 buy point and other key levels.
Taiwan Semiconductor (TSM) rose slightly overnight. Taiwan Semi makes chips for Nvidia, Broadcom and many others. TSM stock stepped back 1.3% to 191.46 on Thursday, just below the 50-day. It now has a 205.63 handle buy point in a consolidation just above a prior base.
Arm Holdings stock climbed modestly in extended action. On Thursday, shares popped 3.4%, breaking a long downtrend and flashing an aggressive entry. ARM stock has a 164.16 buy point from a consolidation within a larger range, according to MarketSurge.
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Costco Earnings
Costco earnings beat while sales were roughly in line, beating some estimates and missing others.
COST stock wavered in overnight trade. Shares edged down 0.6% to 988.39 on Thursday, just below record highs and modestly extended from a prior base.
Stock Market Rally
The stock market rally saw modest losses on the major indexes and a solid decline among small caps. Adobe stock was a notable earnings loser while a somewhat-hot PPI inflation report helped extend the weekly gain in Treasury yields
The Dow Jones Industrial Average fell 0.5% in Thursday’s stock market trading, now clearly below the 21-day line. The S&P 500 index also fell 0.7%. The Nasdaq composite gave up 0.7% after hitting an all-time high Wednesday. The small-cap Russell 2000 slumped 1.4%, knifing through the 21-day.
It was a quiet session for leaders. Tesla stock fell 1.6%, but that snapped a six-session win streak to a record high.
Among super-hot extended names, Palantir Technologies (PLTR) climbed 0.95% and AppLovin (APP) sank 3.55%.
Microsoft stock edged up 0.1% 5o 449.56, moving toward a 468.35 consolidation buy point, up 6.2% so far in December as the tech titan tries to rejoin the leadership.
U.S. crude oil prices dipped 0.4% to $70.02 a barrel.
The 10-year Treasury yield rose five basis points to 4.32%, up 17 basis points so far this week. Rebounding Treasury yields are a potential headwind for the market rally, especially growth stocks.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) shed 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 0.9%, with Microsoft, Adobe, Palantir stock and AppLovin all key members. The VanEck Vectors Semiconductor ETF (SMH) declined 1%. Nvidia is the No. 1 SMH component, but Taiwan Semiconductor stock and Broadcom are also major holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 1.4% and ARK Genomics ETF (ARKG) tumbled 3.75%. Tesla stock is a massive holding across Ark Invest’s ETFs, with Cathie Wood’s Ark also building up a big NVDA stake.
SPDR S&P Metals & Mining ETF (XME) stepped down 2.3%. SPDR S&P Homebuilders ETF (XHB) lost 0.95%. The Energy Select SPDR ETF (XLE) slipped 0.7% and the Health Care Select Sector SPDR Fund (XLV) shed 0.8%.
The Industrial Select Sector SPDR Fund (XLI) sank 0.6%. The Financial Select SPDR ETF (XLF) dropped 0.4%.
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What To Do Now
The stock market rally is still acting well, with the Nasdaq right at record highs. Thursday was a quiet session, with not many stocks flashing new buy signals aside from Arm. Some are in buy range while more are setting up in emerging bases or pullbacks, including Fortinet (FTNT) and Goldman Sachs (GS). Many leaders are simply extended.
Standing pat, assessing your current holdings, working on watchlists and updating watchlists is still the order of the day.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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