Dow Jones futures rose slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. Micron Technology fell slightly despite strong earnings and guidance.
The stock market rally retreated Tuesday as the Nasdaq led a retreat from record highs. Federal Reserve Chief Jerome Powell said Tuesday "equity prices are fairly highly valued." Meanwhile, Nvidia gave up most of Monday's strong OpenAI-related gain, with a number of other AI plays retreating. Amazon.com triggered sell signals, moving decisively below the 50-day line. Rocket Lab ran back above a buy point.
Alibaba surged on plans to ramp up AI spending, lifting many other Chinese techs.
Micron stock is on IBD Leaderboard. Rocket Lab, Micron and Nvidia are on the IBD 50. Nvidia stock is on IBD Sector Leaders.
The video embedded in the article reviews Tuesday's market action and analyzes Rocket Lab stock, Hinge and Bloom Energy.
Dow Jones Futures Today
Dow Jones futures were 0.1% above fair value. S&P 500 futures climbed 0.2% and Nasdaq 100 futures advanced 0.25%.
Crude oil futures rose 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Micron Earnings
Micron earnings beat fiscal Q4 estimates after the close and guided higher for fiscal 2026. The memory-chip giant had preannounced strong results back in early August, while analysts have been predicting strong guidance.
Micron stock fell slightly in premarket trade, reversing slim overnight gains. Shares climbed 1.1% Tuesday to 166.41, near recent record highs. MU stock has been significantly extended.
Micron earnings and outlook are important for many leading stocks. Storage plays Seagate Technology and Western Digital were generally fractionally lower before the open, along with memory-exposed chip-equipment giants Applied Materials, KLA Corp. and Lam Research.
Like Micron, all of these stocks have had big runs.
Stock Market Rally Slides On Powell Comments
The stock market rally started Tuesday strong with the Dow Jones, S&P 500 and Russell 2000 hitting record highs intraday. Stocks fell on Powell's afternoon comments and AI plays giving up much of Monday's Nvidia-OpenAI gains.
Powell, in response, to a question about stock market prices, said, "We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we're trying to achieve. But you're right, by many measures, for example, equity prices are fairly highly valued."
But he added that this is "not a time of elevated financial stability risks."
So while Powell acknowledged the reality that stock valuations are relatively high, he didn't sound especially worried.
Market Details
The Dow Jones Industrial Average fell 0.2% in Tuesday's stock market trading. The S&P 500 index declined 0.55%. The Nasdaq composite declined 0.95%. The small-cap Russell 2000 gave up 0.2%.
Leading stocks were mixed, including speculative growth plays that have been hot in recent weeks.
The Nasdaq is up 5% vs. the 50-day line after hitting 6.2% at Monday's close.
U.S. crude oil prices climbed 1.8% to $63.41 a barrel.
The 10-year Treasury yield fell two basis points to 4.12% after rising for four straight sessions.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.7%. The iShares Expanded Tech-Software Sector ETF gave up 1.2%. The VanEck Vectors Semiconductor ETF dipped 0.15%. Micron stock is a huge SMH holding, but not as large as Nvidia. Applied Materials, Lam Research and KLA also are components.
ARK Innovation ETF shed 1.3% and ARK Genomics ETF declined 1.2%.
SPDR S&P Metals & Mining ETF rose 0.8%. The Energy Select SPDR ETF popped 1.7% and the Health Care Select Sector SPDR Fund edged up 0.2%.
The Industrial Select Sector SPDR Fund finished fractionally higher.
The Financial Select SPDR ETF fell 0.4%.
Best Growth Stocks To Buy And Watch
Nvidia Stock Steps Back
Nvidia stock fell 2.8% to 178.43 pulling back from near a 184.48 flat-base buy point. Nvidia announced a big OpenAI deal, sending shares through the 50-day line and briefly above the traditional buy point. NVDA stock closed Tuesday slightly below an early entry of 180.28 but just above an aggressive trendline.
Nvidia shares edged higher early Wednesday.
Amazon Stock Flashes Sell Signal
Amazon stock fell 3% to 220.71, now clearly below the 50-day line after closing just below that key level on Monday. At the low, the Dow tech giant was 6.96% below the 236.53 buy point, technically not quite hitting the automatic 7%-8% sell rule. But the overall technical picture was poor.
The relative strength line has skidded over the past couple of weeks, nearing its April lows. That reflects AMZN stock's poor performance vs. the S&P 500.
Rocket Lab Rockets
Rocket Lab stock surged 6.2% to 52.89, busting back above a 50.92 cup-with-handle buy point, according to MarketSurge. The buy zone runs to 53.47.
Time The Market With IBD's ETF Market Strategy
What To Do Now
The stock market rally is still in good shape. Tuesday's Nasdaq-led declines may be constructive action after some signs of overheating.
Investors should be heavily invested. A lot of stocks are extended, though a trickle of new names are flashing buy signals. Keep working on those watchlists.
If you are fully invested or on margin, have your exit strategies ready, especially if you are heavily invested in speculative plays. How will you scale out of huge winners? It's more of an art than a science. Figure out what works for you.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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