Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Coupang (CPNG), Arista Networks (ANET) and recent IPOs Reddit (RDDT) and Astera Labs (ALAB) were among the notable earnings reports.
X
The stock market rally was narrowly mixed on Tuesday. Palantir (PLTR) and Datadog (DDOG) weighed on software plays, but a number of leaders from a variety of sectors flashed buy signals.
Nvidia (NVDA) fell Tuesday, though it closed off its worst levels. Tesla (TSLA) retreated amid negative headlines. But Tesla stock remains above its 50-day line.
After the close, networking firm Arista Networks, AI chip IPO Astera Labs, social site Reddit and South Korean e-commerce giant Coupang reported earnings, along with EV maker Rivian (RIVN) and software maker Toast (TOST). Reddit stock soared, while Toast and Arista jumped overnight. Coupang, Astera Labs and Rivian fell.
Nvidia is on IBD Leaderboard, with Toast stock added as an earnings options play. Astera stock is on the Leaderboard watchlist. Nvidia stock is on SwingTrader. Nvidia and Toast are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures were even and Nasdaq 100 futures climbed 0.1%.
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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Stock Market Rally
The stock market rally was relatively quiet on Tuesday, with the major indexes holding onto recent gains.
The Dow Jones Industrial Average rose 0.1% in Tuesday’s stock market trading. The S&P 500 index climbed 0.1%. The Nasdaq composite fell 0.1%.
Market breadth remained positive.
The small-cap Russell 2000 advanced 0.2%.
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.3%, moving above the 50-day. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) edged higher, still below the 50-day.
U.S. crude oil prices dipped 0.1% to $78.38 a barrel.
The 10-year Treasury yield fell three basis points to 4.46, off intraday lows. But the 10-year yield is down 22 basis points in a five-session slide.
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ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 0.5%. The VanEck Vectors Semiconductor ETF (SMH) sank 0.9%, with Nvidia stock the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) declined 2% and ARK Genomics ETF (ARKG) lost 1.2%. Tesla stock is a major holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) rose 0.5% and the SPDR S&P Homebuilders ETF (XHB) fell 1%. The Energy Select SPDR ETF (XLE) dipped 0.1% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.8%. The Industrial Select Sector SPDR Fund (XLI) and the Financial Select SPDR ETF (XLF) advanced 0.3%.
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Key Earnings
Arista Networks earnings beat with the networking firm guiding up slightly amid strong AI demand. Arista also set a $1.2 billion buyback. ANET stock leapt in overnight action, signaling a gap above the 50-day line and above a trendline early entry. Shares fell 1.7% on Tuesday to 273.99, hitting resistance below the 50-day. Arista stock has a 307.74 consolidation buy point.
Astera Labs earnings comfortably beat views in the AI chipmaker’s first quarterly report since coming public in March. Astera also guided higher. But ALAB stock tumbled in wild extended trade. Shares retreated 2.5% on Tuesday to 76.19. Astera has an 88.59 handle buy point in an IPO base.
Reddit reported strong revenue growth and guidance in its first earnings report. RDDT stock soared more than 10% in late trading. Shares rose 2.3% to 49.40 on Tuesday. Reddit stock is building the right side of an IPO base with an official buy point of 74.90.
Coupang earnings just missed while revenue topped. CPNG stock declined solidly overnight. Shares rose 1.3% Tuesday to 23.65, a fresh two-year high.
Toast reported a wider-than-expected GAAP loss, but revenue topped. The restaurant-focused software platform rose solidly in extended action, signaling a trendline early entry on Wednesday. TOST stock edged up 0.7% to 23.73 on Tuesday, back above the 50-day line. The stock has a 25.63 cup-with-handle buy point.
Rivian reported a wider-than-expected loss while revenue beat. The EV startup maintained full-year production targets. RIVN stock fell solidly in overnight trade. Shares dipped 0.7% to 10.26 after jumping to 11.22 Tuesday morning on rumors of Rivian partnership talks with Apple (AAPL).
Early Wednesday, Shopify (SHOP), Uber Technologies (UBER), ACM Research (ACMR), Toyota Motor (TM), Vistra (VST) report. Shopify is just above its 50-day line while Uber, ACM Research and Toyota are below that key level. Utility-turned-AI play Vistra, which joins the S&P 500 before Wednesday’s open, is extended.
Nvidia Stock
Nvidia stock fell 1.7% to 905.54 after running up nearly 11% in the prior three sessions. Shares slid more than 3% Tuesday morning, after Stanley Druckenmiller said he slashed his stake in the tech titan in late March and said AI may be overhyped in the short run.
NVDA stock has a 974 consolidation buy point, according to MarketSurge. A pause here could be constructive, letting a handle form.
Tesla Stock
Tesla stock sank 3.8% to 177.81, but still above the 50-day line.
The National Highway Transportation Safety Administration, in a late Monday letter, requested more information from Tesla regarding its driver-assist systems. NHTSA launched its latest probe last month in which it signaled the EV giant is partly to blame for continued Autopilot accidents. Meanwhile, China sales remain sluggish, signaling little or no improvement vs. the seasonally weak first quarter.
What To Do Now
The stock market rally is looking solid, with the major indexes pausing amid still-positive breadth. Investors can have modest exposure, adding positions gradually if the market continues to work.
Earnings season remains heavy and continues to have gold mines and land mines. So keep that in mind.
Develop those watchlists, including leading stocks from a variety of sectors.
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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