Dow Jones futures climbed modestly Thursday morning, while S&P 500 futures and Nasdaq futures jumped as Nvidia reported skyrocketing earnings and strong guidance.
Nvidia stock jumped after hours, with the chip giant also giving lifts to Advanced Micro Devices, Arm Holdings and a slew of AI plays including Super Micro Computer, Palantir Technologies and Microsoft
In addition to Nvidia, fellow AI play Synopsys reported earnings, along with Tesla rivals Rivian Automotive and Lucid Motors.
On Wednesday, the stock market rally fell much of the session, but turned mixed thanks to a final-hour rebound. Palo Alto Networks crashed on weak guidance, slamming cybersecurity plays and raising concerns about techs generally heading into Nvidia's results.
Newly released minutes from the Jan. 30-31 Fed meeting showed that policymakers "generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation" was receding toward 2%. That message has been hammered home by Fed officials in February, with strong economic data and sticky inflation also spurring markets to push back rate-cut expectations.
Nvidia and ARM stock are on IBD Leaderboard. Synopsys stock and Microsoft are on IBD Long-Term Leaders. Nvidia stock is on the IBD 50. Nvidia, Synopsys, Palantir and SMCI stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures climbed 0.4% vs. fair value. S&P 500 futures popped 1.2%. Nasdaq 100 futures jumped 2.1%. Nvidia stock is a huge S&P 500 and Nasdaq 100 weighting, while many other major techs were big movers too.
The 10-year Treasury yield edged up to 4.34%.
Japan's Nikkei 225 hit a record high Thursday, finally surpassing its 1989 peak.
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
Stock Market Rally
The stock market rally extended losses for most of Wednesday, with techs and small caps again leading the decline. But the indexes came off lows in the final hour of trading.
The Dow Jones Industrial Average and S&P 500 index edged up 0.1% in Wednesday's stock market trading after both nearly tested their 21-day exponential moving averages intraday. The Nasdaq composite lost 0.3%, just below the 21-day line after skidding as much as 1.1%. The small-cap Russell 2000 sank 0.5%, but held its 21-day after slashing losses.
U.S. crude oil prices rose 1.1% to $77.91 a barrel. Natural gas futures, which had plunged in 2024 to near long-term lows, spiked 12.5%.
The 10-year Treasury yield rose 5 basis points to 4.32%, right at three-month highs.
While AI and tech stocks have led the market rally, leadership is relatively broad. As techs retreated Wednesday, Birkenstock, SharkNinja, Toll Brothers, Weatherford International and General Motors cleared buy points, at least intraday.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF sank 2.8%, led by Palo Alto Networks and cybersecurity plays. Microsoft is a major IGV holding. The VanEck Vectors Semiconductor ETF fell 0.6%. Nvidia stock is the No. 1 holding in SMH, with AMD also a big holding. Synopsys stock is in IGV and SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF gave up 2.8% and ARK Genomics ETF lost 1.8%.
SPDR S&P Metals & Mining ETF advanced 0.85% and the Global X U.S. Infrastructure Development ETF climbed 0.55%. U.S. Global Jets ETF dipped 0.2%. SPDR S&P Homebuilders ETF edged up 0.3%. The Energy Select SPDR ETF popped 1.9% and the Health Care Select Sector SPDR Fund added 0.2%.
The Industrial Select Sector SPDR Fund tacked on 0.4%. The Financial Select SPDR ETF rose 0.3%.
Time The Market With IBD's ETF Market Strategy
Nvidia Earnings
Nvidia earnings and revenue skyrocketed once again, both beating views. The AI chip leader guided for fiscal Q1 2025 revenue of $24 billion vs. estimates of $21.1 billion.
Those were stellar figures, even though they didn't obliterate consensus.
Nvidia stock surged 13% in premarket action. Shares fell 2.85% to 674.72 in Wednesday's regular session, but closed above their 21-day line. NVDA stock skidded 4.35% on Tuesday.
AMD stock rose more than 5% before the open. Shares dipped 0.8% to 164.29 on Wednesday, after slumping 4.7% on Tuesday. Shares were close to testing the 10-week line for the first time in months.
ARM stock leapt 7% in extended trade. Shares rose 1.3% to 123.39 on Wednesday, rebounding from the 10-day line after Tuesday's 5.1% retreat.
Palantir stock advanced 6% in overnight action. Shares sank 2.8% to 22.74 on Wednesday, after Tuesday's 4.3% slide. PLTR stock is back in range of a 21.85 cup-base buy point cleared earlier this month after earnings.
Super Micro stock soared 11%, even with the AI server maker proposing a $1.5 billion convertible debt offering. Shares tumbled 6.8% on Wednesday to 734.17 after sliding 2% on Tuesday and diving 20% Friday. SMCI stock is still above its 21-day moving average.
Microsoft stock rose modestly in extended action. Shares dipped 0.15% Wednesday to 402.18, falling a little further below the 21-day line. MSFT stock is back in range of a 384.30 buy point from a flat base, base-on-base formation. It's closing in on its 50-day and 10-week lines.
Other Earnings
Synopsys earnings topped fiscal Q1 views with the electronics design software maker guiding higher for the current Q2. SNPS stock rose 4.5% in overnight trade to 568. Shares dipped 0.8% to 543.57 on Wednesday, but came off lows to finish above the 50-day line. Synopsys stock has fallen back after breaking out from a cup-with-handle base. The 554.57 buy point is still valid.
Rivian reported a wider-than-expected loss but revenue nearly doubled, slightly beating. The EV startup also pointed to flat production in 2024, far below views. In early January, Rivian disclosed it delivered 13,972 vehicles in Q4, in line with views, and it made 17,541. RIVN stock plunged 18% in extended action. Shares fell 3.15% to 15.39 on Wednesday, near recent lows amid concerns about EV demand generally.
Lucid reported an in-line loss but revenue tumbled 39%, worse than forecast. Lucid stock fell 7% in extended action. Shares nudged 0.5% higher Wednesday to 3.70. It previously disclosed that it produced 2,391 vehicles in Q4. It delivered 1,734, beating lowered targets. The luxury EV maker slashed prices of its Lucid Air yet again a few days ago.
Tesla stock climbed 1% in premarket trade. Shares edged up 0.5% to 194.77 on Wednesday.
What To Do Now
The market rally has been pulling back since early last week. This could end up being constructive, creating a large number of buying opportunities.
The initial overnight reaction to Nvidia earnings is positive, but you don't know how that's going to play out in Thursday's session.
But you do want to be ready to act.
When running your screens, make sure to cast a wide net. Yes, AI and tech stocks have been big winners, but don't ignore housing, construction, financial, travel, retail and even energy names that are doing well.
Having a diversified leadership can help limit the risk of a major one-day loss in your portfolio. It can also help you avoid missing out on new or rotating leadership.
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.
