Dow Jones futures rose slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. Investors face a huge amount of news in the coming session, including the Q2 GDP data before the open, the Federal Reserve meeting decision Wednesday afternoon as well as Microsoft and Meta Platforms earnings after the close.
So the stock market rally reversing modestly lower on Tuesday wasn't that surprising. The S&P 500 and Nasdaq hit record highs before turning lower.
Booking Holdings, Visa, Seagate Technology, Starbucks and Qorvo headlined earnings late Tuesday, with AI infrastructure play Vertiv out early Wednesday
Seagate stock tumbled overnight after teasing a tight pattern buy point Tuesday. Booking stock and Visa fell slightly, backing off from potential entries. Qorvo stock spiked, eyeing a breakout. Starbucks stock may reclaim the 200-day and possibly test an aggressive entry. Vertiv stock, already extended, rose on its beat-and-raise report.
Meanwhile, SoFi Technologies, which jumped 6.6% Tuesday on strong earnings, fell sharply early Wednesday on a big SOFI share offering.
The video embedded in the article reviews Tuesday's market action and analyzes Rubrik, Jabil and Spotify.
Vertiv stock is on IBD Leaderboard. Jabil stock is on SwingTrader. Microsoft stock is on the IBD Long-Term Leaders. Vertiv and Jabil are on the IBD 50. Jabil was Tuesday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures were about 0.1% above fair value. S&P 500 futures climbed 0.2%. Nasdaq 100 futures rose 0.25%.
Crude oil futures fell slightly.
Investors will get their first look at Q2 GDP data at 8:30 a.m. ET. Economists expect a 2.5% annualized gain after Q1's 0.5% decline due to tariff front-running. Consumer spending growth should be a sluggish 1.4% after Q1's anemic 0.5% pace.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Fed Meeting
The Fed will conclude its two-day policy meeting with a 2 p.m. ET announcement, followed by Fed chief Jerome Powell's news conference at 2:30 p.m. ET. Market watchers see no move Wednesday, but at least one and possibly two policymakers will vote for a Fed rate cut.
But with Trump tariffs getting finalized, the central bank finally is getting some long-awaited clarity. So there are expectations that the Fed statement and especially Powell will open the door to rate cuts.
Microsoft, Meta Soar On Earnings After Stocks Mixed On Powell
Stock Market Rally
The stock market rally opened higher, with the S&P 500 and Nasdaq composite hitting fresh records. But the key indexes turned modestly lower heading into the Fed and big earnings.
The Dow Jones Industrial Average declined 0.5% in Tuesday's stock market trading. The S&P 500 index fell 0.3%. The Nasdaq composite lost 0.4%. The small-cap Russell 2000 shed 0.6%.
Microsoft and Meta earnings, and especially their capital spending guidance, will have a huge impact on Nvidia, AMD and the AI-led market rally. A big reason for the AI stocks' strength in the next few days reflects a raised capex spending target from Google-parent Alphabet.
Arm Holdings and Lam Research will be key chip-sector earnings too.
On Thursday, Amazon.com and Apple weigh in.
Meta stock, Arm and, arguably, Lam Research could be actionable with positive post-earnings reactions.
U.S. crude oil prices jumped 3.75% to $69.21 a barrel.
The 10-year Treasury yield tumbled nine basis points to 4.33%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1%. The iShares Expanded Tech-Software Sector ETF edged up 0.1%, with Rubrik stock a member. The VanEck Vectors Semiconductor ETF rose 0.5%. ARK Innovation ETF slumped 2.7% and ARK Genomics ETF tumbled 4.1%.
SPDR S&P Metals & Mining ETF gave up 1.4%. SPDR S&P Homebuilders ETF shed 1.1%. The Energy Select SPDR ETF gained 1% and the Health Care Select Sector SPDR Fund declined 0.6%.
The Industrial Select Sector SPDR Fund retreated 1.1%. The Financial Select SPDR ETF, which includes Visa stock, gave up 0.5%.
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What To Do Now
The stock market rally is in strong shape. The mammoth news coming in just the next day is more than enough reason for the market to pause.
Investors should be heavily invested and letting their winners run. Taking partial profits on stocks that are highly extended or with earnings due is an option.
Keep looking for setups, but be choosy about new buys, at least for the next day or two.
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.
