Dow Jones futures rose modestly early Wednesday, along with S&P 500 futures and Nasdaq futures, on news that U.S.-China trade talks will begin later this week. But premarket gains are fading. The Federal Reserve will conclude its two-day policy meeting , with Fed chief Jerome Powell in focus.
Nvidia rival Advanced Micro Devices, Nvidia partner Super Micro Computer and Tesla rival Rivian headlined earnings Tuesday night. Walt Disney and Uber Technologies reported early Wednesday.
The stock market rally fell again Tuesday, backing off key levels amid conflicting Trump tariff news.
Palantir Technologies plunged following earnings, but held a key level. Robinhood Markets, reversed higher from key support.
Uber stock is on IBD Leaderboard, with Palantir on the Leaderboard watchlist. Robinhood stock and Palantir are on the IBD 50. Palantir stock is on the IBD Big Cap 20. The video embedded in the article reviews Tuesday's market action and analyzes Palantir, Alibaba stock and Verona Pharma.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value, with DIS stock offering a lift. S&P 500 futures climbed 0.3% and Nasdaq 100 futures advanced 0.3%. Futures are fading, well off their Tuesday night highs.
Crude oil futures rose nearly 1%.
China's central bank will trim key lending rates by 10 basis points and cut bank reserve requirements by 50 basis points as of May 15. Chinese officials also said they would welcome local companies listed overseas to list in China markets only.
Meanwhile, the India-Pakistan conflict has stepped up between the nuclear powers. India fired ballistic missiles vs. "terrorist camps" while Pakistan claimed to shoot down some jets.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
U.S.-China Trade Talks
Treasury Secretary Scott Bessent and U.S. Trade Rep. Jamieson Greer will meet with high-level Chinese officials later this week, according to late Tuesday releases from the Treasury Department and Office of the U.S. Trade Representative. Bessent will meet with Vice Premier He Lifeng. Greer will speak to his counterpart. Those would be the first U.S.-China trade talks. The conversations will be an effort to de-escalate tensions vs. focusing on a big trade deal. Trump tariffs on China have skyrocketed to 145% vs. most Chinese goods. China has retaliated with 125% duties on American goods.
Earlier, Bessent told lawmakers there have been no U.S.-China talks, but said the administration is working on many trade deals, with some accords possible this week. Bessent added that he doesn't expect a U.S. recession.
Later, President Donald Trump sparred with Canada Prime Minister Mark Carney at the White House, with Carney saying his country is "not for sale." Before the Oval Office event, Trump on Truth Social repeated claims that America is subsidizing Canada, adding that "we don't need ANYTHING they have."
Fed Meeting
The Federal Reserve meeting concludes Wednesday afternoon, with no action expected with the 2 p.m. ET announcement. Fed chief Jerome Powell will speak at 2:30 p.m. ET. Powell had a hawkish tilt in early April, but could be more dovish now. However, with Trump tariffs still in flux and the real economy just starting to feel the effects, Powell likely will want to see more clarity.
In recent days, markets pushed back expectations for the first 2025 rate cut to July from June.
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Key Earnings
Super Micro, AMD, Arista Networks, Tempus AI, Electronic Arts, Rivian, Upstart Holdings, Mosaic, Coupang reported late Tuesday. Vistram Disney and Uber reported before Wednesday's open.
Electronic Arts and Disney popped on earnings, while Mosaic, AMD and Tempus also climbed. EA stock is moving toward a consolidation buy point.
On the downside, Upstart stock sold off. Arista Networks, Super Micro, Uber, Vistra, Coupang and Tesla rival Rivian also fell.
Uber stock has been eyeing a buy point, already clearing an early entry. Shares may undercut that entry at Wednesday's open.
Stock Market Rally
The stock market rally tumbled at Tuesday's open, and pared losses on Bessent's trade comments before retreating into the close.
The Dow Jones Industrial Average shed 0.8% in Tuesday's stock market trading. So did the S&P 500 index. The Nasdaq composite sank 0.9%. The small-cap Russell 2000 tumbled 1.05%.
The S&P 500 and Nasdaq are pulling back from near their 200-day moving averages — the Nasdaq 100 actually hit that key level intraday Friday. It's OK to see the indexes pull back somewhat after a strong run-up. But a retreat below the 50-day lines would raise concerns that the current uptrend is fizzling out.
Meanwhile, the Dow Jones is now clearly below its 50-day line, with the Russell 2000 undercutting its 50-day.
Leading stocks are still looking fine, with many pulling back modestly and a few gaining ground such as Robinhood. A few, like Palantir, are selling off on earnings reports.
U.S. crude oil prices jumped 3.4% to $59.09 a barrel after hitting a four-year closing low on Monday.
The 10-year Treasury yield fell four basis points to 4.305%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF gave up 1.2%. The iShares Expanded Tech-Software Sector ETF shed 1.4%. Palantir stock is a big IGV holding. The VanEck Vectors Semiconductor ETF lost 0.9%. AMD stock is a notable SMH holding, with Nvidia No. 1 of course.
ARK Innovation ETF slumped 3.8% and ARK Genomics ETF dived 7.2%. Tesla stock is still the No. 1 holding across ARK Invest's ETFs. Palantir is Cathie Wood's No. 2 holding, with Robinhood stock and Tempus AI also top-10 holdings.
SPDR S&P Metals & Mining ETF gained 1.15%. The Energy Select SPDR ETF rose a fraction and the Health Care Select Sector SPDR Fund slumped 2.8%.
The Industrial Select Sector SPDR Fund shed 0.9%, with Uber stock a notable holding. The Financial Select SPDR ETF declined 0.6%.
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Palantir Stock
Palantir stock dived just over 12% to 108.86, but found support at the 21-day moving average. Shares backed off a 125.41 cup-base buy point, according to MarketSurge. But investors could have used 98.17 as a double-bottom entry. A break of the 21-day line would be a signal to recent buyers to sell at least some of their PLTR stock.
Late Monday, Palantir earnings met views while sales growth accelerated for a seventh straight quarter, to 39%. The AI data analytics play, which had soared heading into earnings, did report lower international commercial sales.
Robinhood Stock
Robinhood stock rebounded from a drop to the 21-day line, rising 1.3% to 48.68. The crypto, stock and options free-trading app is working on a very deep consolidation. HOOD stock is on track to have a 51.30 handle buy point on a daily chart after Wednesday. It already has a handle on a weekly chart. Investors could look for early entries within the handle.
What To Do Now
A stock market pullback right now would be normal. But it also wouldn't be surprising to see the market rally fizzle out around these levels, especially if Trump tariff news turns negative.
Despite a couple of relatively calm sessions, Trump tariff headlines could still send stocks skyrocketing or plunging.
The current pause could let some leaders forge handles or pull back to key levels. So look for new setups.
But if this is the start of a bigger retreat, investors will need to pare or close out positions. Some trimming may already be occurring for specific stocks. Have your exit strategies in hand.
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