Dow Jones futures rose slightly early Thursday, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is on tap.
The stock market rally opened Wednesday with the S&P 500 and Nasdaq hitting record highs as Oracle sent artificial intelligence plays racing, with a little help from Taiwan Semiconductor.
But the indexes weakened in the afternoon, closing mixed. Outside of AI, it was a flat to lower day.
Still, AI stocks Nvidia, GE Vernova, Vertiv, Talon Energy and Comfort Systems all flashed buy signals.
GE Vernova stock is on Leaderboard, with Vertiv on the watchlist. Comfort Systems stock is on the IBD 50. Comfort Systems was Wednesday's IBD Stock Of The Day.
The video embedded in the article reviews Wednesday's market action and analyzes Nvidia stock, GE Vernova and Comfort Systems.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures advanced 0.2%. Nasdaq 100 futures climbed 0.3%.
The 10-year Treasury yield edged up to 4.05%. Crude oil fell 1%.
The Labor Department will release the CPI inflation report for August 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.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally was all about AI on Wednesday, with Oracle and AI-related stocks driving the S&P 500 and Nasdaq to record highs before fading. But even AI stocks came off late morning highs.
A surprise drop in overall producer prices didn't have much impact on Fed rate odds, with core PPI rising as expected and the CPI inflation report on tap.
The Dow Jones Industrial Average fell 0.5% in Wednesday's stock market trading. The S&P 500 index gained 0.3%. The Nasdaq composite edged higher. The small-cap Russell 2000 fell 0.2%.
Aside from AI, gold and crypto plays showed strength, and commodities in general did well.
The Invesco S&P 500 Equal Weight ETF dipped 0.1%, but was still close to highs.
The First Trust Nasdaq 100 Equal Weighted Index ETF fell 0.8%, continuing to hit resistance at the 50-day line.
U.S. crude oil prices rose 1.7% to $63.67 a barrel.
The 10-year Treasury yield fell four basis points to 4.03%, a fresh five-month low.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 1.6%. So did the iShares Expanded Tech-Software Sector ETF, with Oracle stock a major holding. The VanEck Vectors Semiconductor ETF gained 1%, with Nvidia stock the No. 1 component and TSM close behind.
ARK Innovation ETF fell 1.3% and ARK Genomics ETF tumbled 3.3%.
SPDR S&P Metals & Mining ETF and the Energy Select SPDR ETF advanced 1.8%. SPDR S&P Homebuilders ETF dipped 0.3%. The Health Care Select Sector SPDR Fund declined 0.9%
The Industrial Select Sector SPDR Fund rose 0.7%. The Financial Select SPDR ETF dropped 0.3%.
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Oracle Lifts AI Stocks
Oracle stock skyrocketed 36% to a record high as the software giant reported an enormous AI backlog. That suggests a huge need for Nvidia AI chips, data centers and related energy, cooling and construction firms.
Also helping: Taiwan Semiconductor reported August sales jumped 33.8% vs. a year earlier in Taiwanese dollars. Taiwan Semi makes chips for Nvidia, AMD, Broadcom and more. TSM stock rose 3.8% Wednesday, at the edge of a buy zone after breaking out Tuesday, according to MarketSurge.
Nvidia stock also popped 3.8% to 177.27, breaking above the 50-day line and a tight trendline, offering an early entry. NVDA stock is on track to have a flat base at the end of the week with a 184.48 buy point.
GE Vernova stock and Vertiv had bigger gains, but also pushed above the 50-day and trendlines in emerging consolidations.
Talen Energy stock and Comfort Systems cleared short consolidations, offering entries as well.
Many other AI stocks are extended, often greatly so.
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What To Do Now
The stock market rally is at record highs, with AI once again the driver. Investors should have a healthy exposure to this theme.
There were some new buying opportunities Wednesday. But don't chase after extended stocks.
Don't neglect other sectors. Wednesday was an Oracle-AI day, but plenty of sectors have been showing strength in recent weeks.
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.
