Dow Jones futures edged higher early Wednesday, while S&P 500 futures and Nasdaq futures fell slightly. Chip-gear giant ASML tumbled on guidance with Goldman Sachs and more big banks beating earnings views. Another inflation report is on tap.
The stock market rally had a mixed session Tuesday, with the Nasdaq and S&P 500 hitting fresh highs intraday but closing near lows. Nvidia stock, Advanced Micro Devices, Taiwan Semiconductor and other artificial intelligence chip plays rallied after Nvidia said the U.S. government will let it resume selling its H20 artificial intelligence chip to Chinese customers. AMD stock flashed a buy signal.
Also boosting AI plays were a slew of announcements by CoreWeave and many others as President Donald Trump took part in an energy and AI summit at Pittsburgh's Carnegie Mellon University.
But the overall market was weak, with decliners easily outpacing winners. Treasury yields rose after the CPI report showed core inflation rising slightly, as key goods prices showed some Trump tariff pressures.
However, Twilio, Sea and Tencent Holdings flashed buy signals.
The video embedded in this article reviews Tuesday's market action and analyzes Twilio stock, Sea and Tencent.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value, buoyed by Goldman Sachs and Johnson & Johnson. S&P 500 futures fell a fraction and Nasdaq 100 futures gave up 0.2%. ASML and some other chip-gear giants are Nasdaq 100 members.
Crude oil fell 1%.
The PPI inflation report is due at 8:30 a.m. ET.
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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Key Earnings
ASML beat Q2 views, but the Dutch chip-equipment giant guided low on Q3 and couldn't confirm 2026 growth, citing "increasing uncertainty driven by macro-economic and geopolitical developments." ASML stock tumbled early Wednesday. Shares topped a short-term high Tuesday, which had offered a potential entry.
Applied Materials, Lam Research and KLA Corp. all fell modestly in premarket trade.
Bank of America beat on earnings but slightly missed on revenue. BofA rose slightly, signaling a move back to the 21-day line. BAC stock is below one buy point but above a handle entry.
Goldman Sachs and Morgan Stanley beat views. Goldman stock rose slightly while Morgan Stanley edged lower. Both have been trading tightly after hitting record highs recently.
Johnson & Johnson topped Q2 consensus and guided higher for the full year. JNJ stock rose modestly, signaling a move off the 200-day line and perhaps offering an early entry.
Stock Market Rally
The stock market rally started off with strong Nasdaq gains, buoyed by Nvidia, AMD and other AI plays, but underlying weakness became more obvious. The Nasdaq and S&P 500 hit record levels intraday, but the former came well off highs and the latter reversed lower. Financials were generally weak, with big bank earnings mixed.
The Dow Jones Industrial Average gave up 1% in Tuesday's stock market trading. The S&P 500 index sank 0.4%. The Nasdaq composite rose 0.2%. The small-cap Russell 2000 tumbled 2%.
Notably, the Invesco S&P 500 Equal Weight ETF sank 1.4% and the First Trust Nasdaq 100 Equal Weighted Index ETF gave up 0.7%.
While the underlying market had a bad day, the overall picture remains strong.
U.S. crude oil prices fell 0.78% to $66.52 a barrel.
The 10-year Treasury yield rose six basis points to 4.49%, continuing a big rebound from just above 4.2% intraday on July 1.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 0.3%. The iShares Expanded Tech-Software Sector ETF dipped about 0.1%. The VanEck Vectors Semiconductor ETF popped 1.9%. Nvidia is the No. 1 holding on SMH, with AMD and ASML also big players.
ARK Innovation ETF fell 1.4% and ARK Genomics ETF plunged 3.7%.
Meanwhile, SPDR S&P Metals & Mining ETF declined 0.4%. The Energy Select SPDR ETF retreated 1.4% and the Health Care Select Sector SPDR Fund skidded 1.8%.
The Industrial Select Sector SPDR Fund dropped 0.75%.
The Financial Select SPDR ETF shed 1.7%
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Nvidia Stock Rises
Nvidia stock rose 4% to 170.70, hitting a fresh high intraday. NVDA stock now has a $4.165 trillion market cap.
The AI giant announced late Monday that it will soon resume selling its H20 chip to Chinese customers, after the U.S. government told Nvidia that it would grant licenses. The H20 GPU was designed to comply with U.S. government restrictions on exports of advanced chips to China, but the Trump administration had halted those sales in April.
AMD stock leaped 6.4% to 155.61, moving well past an aggressive entry of 147.75. AMD plans to restart MI 308 GPU shipments to China as well.
Broadcom climbed 1.9% to 280.94, near record highs. On Tuesday, Broadcom released its latest Ethernet switch, Tomahawk Ultra.
Taiwan Semiconductor stock climbed 3.6% to 236.95. Taiwan Semi, which reports Q2 earnings Thursday, makes chips for Nvidia, AMD, Broadcom and more.
Super Micro Computer popped 6.9% to 53.17. The AI server maker is an Nvidia partner. SMCI stock is now extended from a 50.55 handle buy point from a messy, deep five-month consolidation.
CoreWeave stock ran up 6.1% to 140.49, but hit resistance at the 21-day line. The Nvidia-backed cloud-computing IPO announced a new AI data center in Pennsylvania on Tuesday. CRWV stock popped 5.2% on Monday, rebounding from the 10-week moving average after diving 23.8% last week.
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Stocks Topping Buy Points
Twilio stock jumped 6.1% to 140.49, clearing a new 125.52 buy point. TWLO stock fell solidly last week, below the 50-day line, as software struggled.
Sea stock leaped 4.7% to 158.19, breaking a downtrend in an emerging consolidation and retaking the 50-day line. The Singapore-based internet gaming and e-commerce giant will have a traditional 172.65 buy point after this week.
Tencent stock popped 3.6% to 65.97, retaking the 50-day line and breaking the downtrend from the top of the handle or top of the base. The Chinese internet giant's traditional cup-with-handle buy point is 66.74, according to MarketSurge. Nvidia being able to sell H20 chips to China is good news for Tencent and other China tech giants.
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What To Do Now
The stock market rally had a deceptively weak day, though many leaders did well and most others held up fine.
The past couple of weeks have seen leading stocks on their own or within specific groups or themes have big moves up or down. Investors can mitigate the risks by diversifying leadership or using sector or market ETFs.
Investors should be heavily invested, so can afford to be choosy with potential new buys. But definitely have watchlists ready.
Nvidia and Broadcom stock are on IBD Leaderboard, with CoreWeave on the Leaderboard watchlist. Nvidia, CoreWeave and Taiwan Semiconductor stock are on the IBD 50. Nvidia stock is on IBD Sector Leaders.
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.
