Dow Jones futures fell modestly early Thursday, along with S&P 500 futures and Nasdaq futures. Several hot stocks, including Astera Labs, Oklo and Credo Technology, extended selling before the open.
The stock market rally saw modest losses Wednesday for the major indexes. Micron Technology fell despite strong earnings and guidance. Alibaba soared on AI spending plans.
Several big winners saw significant losses, including Astera Labs, Oklo and Credo Tech, as well as Bloom Energy, Rocket Lab and Celestica.
More positively, Broadcom tested its 21-day line as part of a gradual pullback, closing fractionally higher. Futu Holdings, Quanta Services and National Fuel Gas flashed buy signals.
Still, investors should consider stepping back somewhat, especially if aggressively positioned in terms of exposure and holdings.
After the close, KB Home reported better-than-expected quarterly earnings but trimmed full-year targets for housing revenue. The homebuilder was little changed before the open.
The video embedded in the article reviews Wednesday's market action and analyzes Astera Labs, Quanta Services and Broadcom stock.
Dow Jones Futures Today
Dow Jones futures declined 0.1% vs. fair value. S&P 500 futures fell 0.3% and Nasdaq 100 futures sank 0.5%.
The 10-year Treasury yield edged up to 4.15%.
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 retreated for a second straight day Wednesday, though the major indexes bounced from around their 10-day moving averages. Many leading stocks suffered bigger losses.
The Dow Jones Industrial Average fell 0.4% in Wednesday's stock market trading. The S&P 500 index and Nasdaq composite lost 0.3%. The small-cap Russell 2000 sank 0.9%.
Micron crushed views and guided significantly higher, but MU stock fell 2.8%, still holding the 10-day line. Shares had soared in September heading into results.
U.S. crude oil prices popped 2.5% to $64.99 a barrel.
The 10-year Treasury yield rose three basis points to 4.145%.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF slumped 1.9%. The iShares Expanded Tech-Software Sector ETF sank 1%. The VanEck Vectors Semiconductor ETF dipped 0.2%. Broadcom stock is a big SMH holding, along with Micron. ARK Innovation ETF edged down 0.2% and ARK Genomics ETF retreated 1.85%.
SPDR S&P Metals & Mining ETF gave up 1.1%. SPDR S&P Homebuilders ETF stepped down 0.6%. The Energy Select SPDR ETF gained 1.3% and the Health Care Select Sector SPDR Fund declined 0.4%
The Industrial Select Sector SPDR Fund gave up 0.5%, with PWR stock in XLI. The Financial Select SPDR ETF retreated 0.3%.
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Big Winners Struggle
Astera Labs stock gapped down 10.8% on Wednesday to 205.27, below its 21-day line. The AI chipmaker has fallen for four straight session, tumbling 21.9% from their record 262.90 set on Sept. 18. Astera gave up 6% before the open.
Credo stock dived 7.9% to 149.40, just below the 21-day line. Shares have fallen for four consecutive sessions after hitting an all-time best of 176.70 on Sept. 18. CRDO stock hit a 2025 low of 29.09 on April 7. Credo fell 6% early Thursday.
Bloom Energy stock tumbled 10.6% to 69.18 after losing 10.3% on Tuesday, though shares closed solidly above the 21-day line. BE stock could test that key level on Thursday, with shares down nearly 6% in the premarket.
Oklo stock hit a record 144.49 intraday Wednesday, but reversed for an 8.05% tumble to 131.17. Shares dived 15% before the open, signaling at least a test of the 10-day line.
Stocks To Watch
Futu stock jumped 5.6% on Wednesday to 176.39, back above the 50-day, but closing just below the 21-day. Clearing that would offer an entry while a new base tries to develop.
Quanta Services stock popped 3.4% to 402.87, above a short-term high of 400.87 as well as a slightly-lower trendline entry. PWR stock has a 424.94 flat-base buy point.
National Fuel Gas stock rallied 3% to 92.20, clearing an 89.82 flat-base buy point, according to MarketSurge. Investors had a chance to buy the natural gas distributor on Tuesday, as NFG stock rebounded from the 50-day line and cleared a short-term high and a trendline.
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What To Do Now
The stock market rally looks fine on the major indexes. A modest pause is probably constructive.
But a number of leaders, often significantly extended, have suffered more-serious losses. Most are far from broken and could bounce back or base out. Still investors may want to take some partial profits, especially if they didn't take some gains on the way up.
That's even more important for investors who are heavily invested in speculative growth stocks that had become significantly extended. Losing 5% in one day on a single 10% position is one thing. Losing 5% on your entire portfolio in one day is another, with a few bad days wiping out weeks of gains.
Partial profits and curbing exposure not only protect against bigger capital losses, but your mental capital as well.
Investors should still be heavily invested. The major indexes are still near record highs while many leaders are still acting well, including Broadcom.
Keep working on watchlists and have your exit strategies up to date.
Micron stock and Broadcom are on IBD Leaderboard. Broadcom stock is on SwingTrader. Astera Labs stock and Micron are on the IBD 50. Credo stock and Astera Labs, are on the IBD Big Cap 20. Futu stock is on IBD Sector Leaders. Quanta Services was Wednesday's IBD Stock Of The Day,
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