Dow Jones futures were little changed overnight, as were S&P 500 and Nasdaq futures. Brazing (FASTER) And C3.ai (AI) headlined the results Wednesday evening.
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The stock market rally started with decent gains on Wednesday, but reversed lower at the close. Yields on Treasuries and crude oil continued to fall on concerns that the economy was slowing too quickly.
You’re here (TSLA) reduced its earnings, but was the only Magnificent Seven title to advance.
Advanced microsystems (AMD) has unveiled its latest line of AI chips, taking Nvidia (NVDA) more directly in artificial intelligence. Lisa Su, CEO of AMD, said the AI chip market could exceed $400 billion by 2027. Alphabet (GOOGLE) revealed its large Gemini language model as well as its latest in-house AI chip. All these announcements are important for the AI leader Microsoft (MSFT).
But AMD stock reversed lower after regaining a buy point Wednesday morning. Nvidia stock, which almost reclaimed its own buy point, also turned negative. Google stock fell slightly, below key levels, while Microsoft held a buy point.
Microsoft and Nvidia shares are activated MII classification and are on the MII 50. Nvidia shares are in progress Swing Trader. MSFT stock is on the Long-term leaders in IBD list. The video integrated into the article analyzed Ollie’s Bargain Outlet (OLLI) action, Trex (TREX) and AMD.
Dow Jones Futures Today
Dow Jones futures fell 0.1% from fair value. S&P 500 futures lost a fraction and Nasdaq 100 futures were flat.
Remember that overnight action Dow Jones Futures and elsewhere does not necessarily translate into real exchanges during the next regular class sotck exchange session.
Earnings
AI stock took a late dive as C3.ai reported a smaller-than-expected loss, but revenue fell short, as did revenue forecasts. AI stock fell 3% to 29.16 during Wednesday’s regular session, holding above the 200-day line. A move above the November 15 high of 31.83 would offer entry into C3.ai stock, which is attempting to build the right side of what would be a very deep consolidation.
BRZE stock jumped in extended action as Braze reported a smaller-than-expected loss and headed higher. The software maker fell 1.2% to 56.12 on Wednesday after hitting a 21-month intraday high. Braze stock is significantly extended from a buy point after rising from the bottom of a base starting November 1st.
Sprinkler (CXM) earnings and revenue beat forecasts for the fiscal third quarter, but delivered in-line guidance for the fourth quarter. CXM stock plunged overnight, reporting a fall below a base buy point of 16.68 cups. Shares closed 0.2% lower at 16.70, compared with 17.14 during the day.
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Stock market rally
The stock market rally started with decent to solid gains, but quickly pared gains and declined as the session progressed.
The Dow Jones Industrial Average fell 0.2% on Wednesday stock market trading. The S&P 500 index fell 0.4%. The Nasdaq Composite Index fell 0.6%. The small-cap Russell 2000 index fell 0.1%.
While many flagship stocks held up, some aggressive growth stocks, particularly in the AI space, suffered heavy losses.
The 10-year Treasury yield fell five basis points to 4.12% following a weaker-than-expected ADP jobs report. On Tuesday, the yield on the 10-year Treasury note fell 12 basis points on surprisingly weak job openings. Friday’s jobs report looms. Notably, the two-year Treasury yield rose 3 basis points to 4.6%.
The S&P 500 and Nasdaq have been largely flat over the past two weeks, despite the 10-year Treasury yield continuing to fall. Some of this could reflect technical resistance at 2023 highs after big November gains. But it could signal concerns that falling Treasury yields now reflect recession fears rather than slowing inflation. The weakness of foreign economies does not help.
Trucking Companies ArcBest (ARCB) And Former Dominion freight line (ODFL) published weak November figures this week, a bad sign for economic activity. But the rail data seems more solid.
Meanwhile, US crude oil prices fell 4.1% to $69.38 per barrel, their lowest level since June 27. Down 10.9% over the last five sessions, this is another sign of weakening demand.
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Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (VAT) fell 1%, with MSFT stock being the #1 position. The VanEck Vectors Semiconductor ETF (SMH) lost 0.8%. Nvidia and AMD stocks are SMH’s top holdings.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) climbed 1.3% and ARK Genomics ETF (ARKG) increased slightly by 0.4%. Tesla shares still represent a significant holding in Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 1.2% and the GlobalPAVE) advanced 0.35%. US Global Jets ETF (JETS) flew 1.9% higher. SPDR S&P Homebuilders ETF (XHB) jumped 1.2%. The Energy Select SPDR ETF (XLE) fell 1.5% and the Select Healthcare Sector SPDR Fund (XLIV) increased slightly by 0.1%.
The Select Industrial Sector SPDR Fund (XLII) climbed 0.4%. The Financial Select SPDR ETF (45) yielded 0.5%.
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AMD AI Chips
AMD officially unveiled its MI300X Line of AI chips at its AI event on Wednesday. The chipmaker said the MI300X line would perform as well or better than Nvidia’s H100.
Nvidia will soon offer the more advanced H200 AI chip, but AMD’s AI offerings could reduce its dominance and pricing.
AMD CEO Lisa Su now sees the market for AI accelerator chips climbing above $400 billion by 2027, with annual growth of more than 70% over the next four years. That’s more than double what AMD expected in August.
In November, AMD forecast $2 billion in AI chip sales in 2024, so expectations were high heading into Wednesday.
AMD stock fell 1.3% on Wednesday to 116.82. Before the MI 300X AI chip was announced, shares briefly recovered to 122.11. cup with handle point of purchase. Investors could choose to use the November 29 high at 125.73 as a best buy point, although Wednesday’s intraday high at 122.83 would serve as an early entry.
Nvidia shares fell 2.3% to 455, reversing lower. At the intraday high of 473.87, NVDA stock moved back above the 21-day line and almost reached the still-standing level of 476.09. double bottom point of purchase. The AI chip leader sits just above its 50-day line. It may be forging further consolidation.
Microsoft, a big buyer of Nvidia AI chips, was at the AMD event. The Dow Jones tech titan unveiled its own AI chip this month. This will reduce its reliance on Nvidia GPUs and third parties such as AMD.
MSFT stock fell 1% to 368.80, right on the 21-day line. The shares hold a 366.78 cup base point of purchase. The sideways movement of recent weeks has allowed the moving averages to catch up.
Google, like Microsoft and Amazon.com (AMZN), unveiled its latest in-house AI chip on Wednesday. Meanwhile, its large Gemini language model will power the Bard chatbot and various AI monetization efforts.
Google shares fell 0.7% to 130.02. Stocks work on a cup with handle of 139.42 point of purchasebut are below the 50 day line.
Tesla Stock
Tesla stock edged up 0.3% to 239.37, well off the highs but still rebounding from the 50-day line. The electric vehicle giant has a double-bottom buy point of 278.98, according to MarketSmith Analysis. Investors could use a trendline around 250 or the November 29 high of 252.75 as an early entry.
Meanwhile, Elon Musk’s artificial intelligence company xAI raises $1 billion in funding.
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Market Rally Analysis
Moving sideways in the market, at least on the S&P 500 and Nasdaq, can be frustrating. Investors want to see their stocks rise every day, and who wants to take a break after November’s big rally? Days when stocks open strong and close weak are discouraging, especially when investors buy near morning highs.
But the break is probably healthy. Even a modest week of declines in the major indexes would help many top stocks form handles, while others could gain relative strength by building on the right side of the bases.
In a sideways market, stocks may issue a buy signal and then give up their gains or reverse lower. If you are heavily exposed, you can remain standing. You may realize partial profits or take advantage of new buying opportunities, but these may be marginal.
Having the patience to hold on is important for investors, even active traders.
For now, focus on updating your watchlists. New stocks and sectors have emerged, while others will decline. If and when the market rally continues to advance, you’ll want to be ready.
Read The big picture every day to stay in tune with the direction of the market and the main values and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarsonDiscussions about @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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