Dow Jones Futures: Nasdaq rallies resistance on Nvidia; All eyes on the PCE inflation report

Dow Jones futures fell after hours, along with S&P 500 and Nasdaq futures. Booking Holdings, MercadoLibre and Square were notable earnings reports Thursday night, while Boeing (BA) has again halted 787 Dreamliner deliveries. All eyes will turn to the Fed’s favorite inflation indicator, the PCE price index, on Friday.


The stock market rally had a day of highs and lows, but closed near session highs. Nvidia (NVDA) soared on earnings and many other token games also rose.

The S&P 500 held key support while the Nasdaq and Russell 2000 moved closer to resistance.

The stock market recovery remains under pressure and investors should act accordingly.

Free market (MELI), Reserve credits (BKNG), Autodesk (ADSK), Intuitive (INTU), Floor and decor (FND) and Square-parent Block (SQ) reported late Thursday.

Boeing is halting 787 Dreamliner deliveries for “additional analysis of a fuselage component,” the FAA said. Deliveries will not resume until Boeing shows regulators the problem is fixed. Aerospace giant Dow Jones resumed 787 deliveries at the end of 2022 after a shutdown of more than a year. BA stock fell slightly late in the session, signaling a 50-day line test.

MELI stock and Floor & Decor are on the IBD 50 list. BKNG stock is on the IBD Big Cap 20.

PCE inflation rate

The Commerce Department will release the Personal Consumption Expenditure Index for January at 8:30 a.m. ET, as part of the Income and Expenditure report.

The PCE price index should post a gain of 0.4% compared to December. The core PCE index, which excludes food and energy, is also up 0.4%. The PCE inflation rate is expected to fall to 4.9% from 5% in December, with core PCE inflation falling to 4.3% from 4.4%.

Closely monitor the prices of non-energy non-housing services. Fed Chief Jerome Powell said he pays close attention to this measure of super-core inflation.

Meanwhile, economists expect personal income to gain 1%, with consumer spending rising 1.2%.

Dow Jones Futures Today

Dow Jones futures fell 0.2% from fair value as Boeing shares weighed on blue chips. S&P 500 futures fell 0.2% and Nasdaq 100 futures fell 0.25%.

The PCE inflation rate is sure to rock Dow Jones futures, Treasury yields and more.

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

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Key wins

MELI shares gained 6% late in the session as profits from MercadoLibre crushed views, with revenue also outpacing the Latin American e-commerce and payments giant. Shares rose 1.6% on Thursday to 1,136.26, above the 21-day line. MELI stock was technically in range from a buy point of 1,095.44. But MercadoLibre stock is expected to break a short trend line at Thursday’s open.

BKNG shares were flat after hours, although booking revenue exceeded views. Shares broke above the 21-day intraday line on Thursday but closed just 22 cents at 2,426.49. Booking stock, which had a strong 2023, is now mastering a long consolidation with a buy point of 2537.10.

ADSK stock fell sharply in extended action as Autodesk earnings edged above views, but the design software maker generally trended lower. Autodesk shares climbed 2.1% on Thursday to 221.16. The shares have a buy point of 232.25 on a double bottom basis.

INTU stock tilted higher overnight. Intuit’s earnings comfortably beat second-quarter views, but software maker TurboTax only reiterated online guidance for fiscal 2023. Shares advanced 1.35% Thursday to 411.88, back above the 200-day line after resuming its 50-day run on Wednesday. Intuit stock has a consolidation buy point of 490.93, but could see early entries.

FND stock rose sharply after Floor & Decor’s earnings topped views, while revenue just tumbled. Floor & Decor stock rose 1.9% to 90.83, above a buy point of 88.82 cup with handle. FND stock wiped out a double-digit gain on Tuesday, according to MarketSmith analysis.

SQ stock jumped in extended trading after Block’s earnings missed but revenue topped. The block stock rose 1.6% to 76.11 on Thursday, slightly above the 50-day line. A decisive move in SQ shares from the 50-day line could offer an early entry into a bottom base.

Thursday stock market rally

The stock market rally opened solidly higher on Nvidia earnings, reversed into modest losses midday before reigniting once more.

The Dow Jones Industrial Average closed up 0.3% in trading on Thursday. The S&P 500 index climbed 0.5%, with Nvidia stock the best performer. The Nasdaq composite rose 0.7%. The small cap Russell 2000 rose 0.7%.

U.S. crude oil prices rose nearly 2% to $75.39 a barrel, ending a six-day losing streak. Natural gas jumped 6.4%, a second straight solid gain.

Copper futures fell 3.1%.

The 10-year Treasury yield fell 4 basis points to 3.88%.


Among growth ETFs, the Innovator IBD 50 ETF (FFTY) gained 1.1%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 0.9%. ETF VanEck Vectors Semiconductor (SMH) jumped 3.5%. NVDA stock is a major holding.

SPDR S&P Metals & Mining ETF (XME) lost 1%. The Global X US Infrastructure Development ETF (PAVE) climbed 0.9%. The US Global Jets ETF (JETS) climbed 1.3%. The SPDR S&P Homebuilders ETF (XHB) rose 1%. ETF Energy Select SPDR (XLE) rebounded 1.5% and ETF Financial Select SPDR (XLF) edged up 0.1%. The SPDR health care sector fund (XLV) rose 0.3%.

Reflecting more speculative stocks, ARK Innovation ETF (ARKK) fell 1.5% and ARK Genomics ETF (ARKG) fell 1.35%.

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Market rally analysis

The stock market rally had a decent close after a ping pong session. Falling Treasury yields likely contributed to the afternoon rally. Ultimately, the indices are still in a tight trading zone.

The Nasdaq composite hit its 21-day moving average near the open, fell back just above its 200-day line, before reversing again and approaching its morning intraday highs. Nvidia has been a key driver. NVDA stock jumped 14% while spurring a broad chip advance.

The S&P 500 fell below its 50-day moving line for much of the day before rising again.

The Russell 2000, like the Nasdaq, also hit resistance at the 21-day moving average.

A number of stocks increased their earnings spread, such as Nvidia. Overall, the major stocks closed well, but definitely followed the intraday movements of the market.

The stock market rally is under pressure and acts like it. The main indices are trying to maintain their support but quickly encounter upside resistance.

Just because the S&P 500 has held the 50-day line for the past two sessions doesn’t mean it will continue to do so. The Dow Jones tested its 50-day line for four weeks before falling on Tuesday. The Dow Jones hit a two-month intraday low on Thursday before rebounding.

Friday’s PCE inflation report looms large. A tamed reading could be a positive catalyst. But high inflation that pushes the 10-year Treasury yield toward 4% could derail the market’s fragile recovery.

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What to do now

Thursday’s market action is why investors should refrain from getting too excited about a strong open. Stocks that looked exploitable or promising in the first few minutes of trading quickly retreated, with a few exceptions.

Expect major indices and stocks to show real strength, with the Nasdaq decisively recovering its 21-day moving average, along with the large-cap S&P 500 and small-cap Russell 2000. Even then, investors should gradually increase their exposure. , do not rush.

In the meantime, update your watchlists for possible purchases and review your portfolio for potential changes.

If the market deteriorates further, be prepared to adopt a more defensive posture.

Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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