Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is on tap, with Cava Group (CAVA), Spotify (SPOT) and Nvidia-backed AI startup Soundhound AI (SOUN) headlining big earnings reports overnight.
The stock market rally retreated Tuesday after a huge run, while Treasury yields jumped. The Nasdaq and S&P 500 gave up little ground while the Dow Jones and especially small caps fell solidly. Shopify (SHOP) led big earnings winners while Zeta Global (ZETA) plunged.
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Tesla (TSLA) fell solidly but after a massive run over the prior week. Nvidia (NVDA) rose around record highs, around buy points, but other AI chip plays were generally down.
Nvidia is on IBD Leaderboard, with Tesla stock, Shopify and Cava on the Leaderboard watchlist. Nvidia and Cava stock are on SwingTrader. Zeta and Nvidia stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures and Nasdaq 100 futures were roughly flat.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
CPI Inflation
The October consumer price index is due at 8:30 a.m. ET Wednesday. Economists expect a 0.2% CPI rise with core CPI up 0.3%. The CPI inflation rate is expected to pick up to 2.6% vs. a year earlier while core inflation holds at 3.3%.
Key Earnings
Cava stock, Spotify, FanDuel parent Flutter Entertainment (FLUT), Instacart parent Maplebear (CART), Rocket Lab (RKLB) and Soundhound reported earnings late Tuesday.
Spotify stock, Cava and especially Rocket Lab surged in extended trade. Flutter stock rose modestly, signaling a move above a traditional buy point.
Meanwhile, Instacart stock and Soundhound AI fell solidly. Nvidia has a stake in AI startup Soundhound.
CyberArk Software (CYBR) and Loar Holdings (LOAR) are due early Wednesday.
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Stock Market Rally
The stock market rally retreated, but the Nasdaq barely fell. The S&P 500 and even the Dow held up reasonably well given recent gains and Tuesday’s jump in Treasury yields.
The Dow Jones Industrial Average dipped 0.1% in Tuesday’s stock market trading. The S&P 500 index fell 0.3% and the Nasdaq composite declined 0.1%, their first losses in six sessions.
The small-cap Russell 2000 tumbled 1.8%, but that’s after a 9.7% jump over the prior five sessions.
Much like the Russell, some postelection winners such as Tesla suffered big percentage losses, but in the context of huge recent gains.
U.S. crude oil prices rose 8 cents to $68.12 a barrel.
The 10-year Treasury yield jumped 12 basis points to 4.43%, back near recent four-month highs after U.S. bond markets were closed Monday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.7%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 0.5%, with Zeta stock a holding. The VanEck Vectors Semiconductor ETF (SMH) declined 0.7%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 1.8% and ARK Genomics ETF (ARKG) slumped 4%. Tesla stock is still a major holding across Ark Invest’s ETFs. Cathie Wood also has built up a big stake in Nvidia.
SPDR S&P Metals & Mining ETF (XME) gave up 2.5% and the SPDR S&P Homebuilders ETF (XHB) lost 2.6%. The Energy Select SPDR ETF (XLE) slipped 0.5% and the Health Care Select Sector SPDR Fund (XLV) retreated 1.4%.
The Industrial Select Sector SPDR Fund (XLI) dropped 0.9%.
The Financial Select SPDR ETF (XLF) dipped 0.3%.
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Tesla Stock
Tesla stock fell 6.1% to 328.64 on Tuesday. But that followed a five-session, 44.1% spike, mostly on Donald Trump’s victory on Nov. 5.
TSLA stock just lost a sliver of its recent gains and is still 21% above its 21-day line. But it’s a reminder that investors should avoid buying hot stocks that are extended.
CEO Elon Musk was a huge supporter of Trump’s election bid and has been advising the president-elect. There are hopes among Tesla investors that Trump policies will favor Tesla.
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What To Do Now
The stock market rally held up relatively well Tuesday given the gains over the past week. Anyone riding the elevator up can’t be surprised if the market and individual stocks take a gradual escalator down a floor or two. As long as the market and stocks are holding the bulk of their Trump bumps, investors shouldn’t be too concerned.
Don’t buy extended stocks. Wait for pullbacks to key moving averages or new bases. Of course, even when buying stocks at good spots, they may struggle if the market pulls back modestly.
Still watch out for earnings. Nvidia earnings in particular will be key for AI stocks and the broader market. So have watchlists up to date with key earnings flagged.
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Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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