Dow Jones futures rose slightly on Thursday morning, as did S&P 500 and Nasdaq futures.
The stock market rally retreated on Wednesday amid key resistance. Major indices initially pared losses after the release of the Fed’s July 27-28 meeting minutes, but faded again at the close.
Chip design company Synopsis (SNPS) and tech giant Dow Jones lagging behind Cisco Systems (CSCO) reported Wednesday evening. SNPS stock edged higher and Cisco stock emerged in extended action on strong earnings and guidance.
lithium giant Chemical and Mining Society of Chile (M²) released mixed results early on Thursday. SQM’s stock fell in premarket trading.
BBBY Stock tumbles
Meanwhile, the newly revived meme stock Bed bath and beyond (BBBY) fell more than 10% early Thursday. BBBY stock rose 12% to 23.08 in Wednesday’s session, but closed near session lows after hitting a five-month high of 30 intraday.
Shares jumped 29% in massive volume on Tuesday as GameStop (EMG) Chairman Ryan Cohen has revealed he still owns BBBY stock as well as significant out-of-the-money options.
But on Wednesday night, Cohen revealed his intention to exit BBBY stocks altogether.
GME stock, the original meme stock, fell overnight after falling 4% on Wednesday. AMC Entertainment (CMA), another meme stock, fell 14% in the regular session.
Federal Reserve policymakers at the late July meeting agreed that further rate hikes were needed, according to recently released Fed minutes.
Lower commodity prices, including energy, are not enough, according to Fed minutes, with policymakers pointing out that inflationary pressures are widespread. But they were also worried about slowing the economy too much.
They did not seem worried that financial conditions had eased since the June meeting, including falling Treasury yields and a stock market rally.
Overall, the The Fed minutes did not hold any hawkish surprisesslightly easing expectations of rate hikes.
Yet markets now see a 61.5% chance of a 50 basis point Fed rate hike on Sept. 21. Earlier Wednesday, before the release of the Fed minutes, the odds were about evenly split between a half-point move or a third basis point move.
Dow Jones Futures Today
Dow Jones futures were up 0.1% from fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures advanced 0.1%. CSCO stock is a member of the Dow Jones, S&P 500 and Nasdaq composite.
Crude oil futures rose 1%. Natural gas futures added 1%.
The 10-year Treasury yield fell 2 basis points to 2.87%.
Stock Market Rally Wednesday
The stock market rally posted losses across major indexes after a mixed outing on Tuesday.
The Fed minutes ultimately didn’t change the major indices much.
July retail sales were flat, the Commerce Department reported ahead of Wednesday’s opening. It was slightly below views. But sales excluding autos and gasoline climbed 0.7%, bolstering expectations that the US economy will return to growth in the third quarter.
The Dow Jones Industrial Average fell 0.5% on Wednesday stock market trading. The S&P 500 index lost 0.7%. The Nasdaq composite fell 1.25%. The small-cap Russell 2000 fell 1.7%.
U.S. crude oil prices rose 1.8% to $88.11 a barrel, ending a three-day streak of losses. Crude and gasoline inventories in the United States have fallen sharply over the past week, much more than expected. Gasoline demand over the past four weeks has peaked in 2022.
The 10-year Treasury yield jumped 10 basis points to 2.89%. It’s a four-week high, but still below its 50-day line.
From best ETFsthe Innovator IBD 50 ETF (FFTY) fell just over 1%, while the Innovator IBD Breakout Opportunities ETF (FIGHT) lost 0.5%. The iShares Expanded Tech-Software Sector ETF (VAT) fell 1.7%. The VanEck Vectors Semiconductor ETF (SMH) fell 2.15%. The SNPS stock can be found in the ETFs IGV and SMH.
SPDR S&P Metals & Mining ETF (XME) fell 2.7% and the Global X US Infrastructure Development ETF (PAVE) fell 1.1%. US Global Jets ETF (JETS) fell 2.5%. ETF SPDR S&P Home Builders (XHB) lost 1.7%. The SPDR Energy Select ETF (XLE) gained 0.8% and the Financial Select SPDR ETF (45) fell 0.5%. SPDR Healthcare Sector Fund (XLV) fell 0.6%.
Apple stock, a member of the Dow Jones, S&P 500 and Nasdaq composite, rose 0.9% to 174.55 on Wednesday. AAPL stock has crossed a falling trendline since early January. This provides a buying opportunity.
AAPL stock rose in volume slightly above normal. But most of its strong uptrend over the past two months has been on below-average trading. The tech titan needs a break. A handful would create a lower buy point and let the moving averages catch up.
Apple stock outperforms other megacaps and the broader market: its relative force linethe blue line in the charts provided, has been hitting record highs for a few weeks.
SQM’s revenue jumped 871% from a year earlier, but still missed views. Revenue jumped 342%, beating. SQM’s stock fell 4% ahead of the open. The shares fell 1.2% to 104.42 on Wednesday after slipping 5.1% on Tuesday in a downward reversal. The SQM stock is working on a buy point of 115.86 cups. Shares moved above an early entry of 99.84 last week from an overhand low, but could test that zone on Thursday. A suitable grip would be ideal for the SQM stock.
Lithium rivals Albemarle (ALB) and Livent (LTHM) both posted strong profits at the start of the month, with industry giant Albemarle again raising its forecast sharply. ALB and LTHM shares fell slightly in premarket trading.
Synopsys revenue tops views while the tips were also solid. SNPS stock rose slightly late in the session. Shares fell 1.2% to 381, holding above an official buy point of 377.70. Synopsys stock has already cleared some early July entries and is still well above its 50-day line. If the stock stops near the top of the bottom, it could create a buying opportunity.
Rival Cadence Design Systems (CDN), also above an official point of purchase, has changed little.
Cisco Surpasses Fiscal Q4 Views and guided for Q1. CSCO stock rose solidly in extended trade. The shares edged down 0.2% to 46.66 on Wednesday. Cisco stock has rallied slightly from its lows in early July, but is well below its 200-day downline.
BJ’s Wholesale topped views in the second quarter and increased full-year revenue and same-store sales guidance. BJ’s stock rose 5% in premarket trading, and is expected to recover a buy point of 71.10. Shares fell 0.2% to 69.13 on Wednesday.
COST stock rose 0.6% to 556.32 on Wednesday, holding above a buy point of 552.81 cup with handle.
Market rally analysis
A day after the S&P 500 stopped just below the 200-day moving average, major indexes fell on Wednesday. Fed minutes moved stocks, but they eventually closed where they left off at 2 p.m. ET.
Small caps and popular growth stocks were the biggest losers, but declines were broad based outside of energy.
The Dow Jones maintained support at its 200-day line. The Russell 2000 has passed this key level. The S&P 500 and the Nasdaq did not reach it.
The market rally has come a long way from its June lows, with the 200-day line a clear resistance zone. So this is an obvious time and place for major break or pullout cues.
For now, the market rally seems reluctant to give up much ground. We can say that a little more hindsight would be constructive. This would allow Apple and other stocks that ran on the right side of the bases to pause and form handles.
But the market will do what it will do. The indices could quickly break above the 200-day line or retreat sharply to the 50-day line, or worse.
What to do now
Stocks tend to follow market and industry trends. This is why it is so important to pay attention to the general market, adding exposure to confirmed uptrends and shifting largely or entirely to cashing in on corrections.
With the market reaching resistance at the 200-day line, investors should wait before increasing their net exposure. They might consider taking partial profits.
But keep working on the watchlists. A cooling market pause could create major opportunities.
Lily The big picture every day to stay in tune with market direction and key stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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