Dow Jones futures turned slightly higher early Friday, while S&P 500 futures and Nasdaq futures pared losses. Interactive Brokers and Dow giant American Express beat earnings targets overnight while Oracle raised long-term growth forecasts.
The stock market rally opened strong Thursday but reversed lower, especially small caps. Regional banks sold off amid growing concerns about bad loans. Treasury yields broke lower.
A number of leaders suffered downside reversals, including Taiwan Semiconductor, Tesla and DoorDash, though out of that trio only DASH stock suffered chart damage.
Still, investors should be wary about new buys.
The video embedded in the article reviewed DoorDash stock, Guardant Health and Zions Bancorp.
DoorDash is on Leaderboard, with Tesla stock on the Leaderboard watchlist. Guardant Health stock is on SwingTrader. Taiwan Semiconductor stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures lost a fraction and Nasdaq 100 futures declined 0.2%. Futures have rallied well off overnight lows.
The 10-year Treasury picked up to nearly 4%.
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
Regional Banks Up After Sell-Off
Zions Bancorp and Western Alliance disclosed bad loans, slamming regional banks on Thursday. Credit concerns have mounted following recent bankruptcies by auto parts maker First Brands and auto lender Tricolor. In addition to credit woes, some regional banks this week have reported disappointing net interest income (NII) or guidance.
ZION stock dived 13.1% on Thursday with Western Alliance off 10.8%. The SPDR S&P Regional Banking ETF sold off 6.3%.
However, ZION stock rose solidly early Friday as Baird analysts said "buy the dip" after an "excessive" sell-off. WAL stock and the KRE ETF also turned higher.
Superregionals Truist Financial, Regions Financial and Fifth Third Bancorp, as well as auto lending giant Ally Financial, rose early Friday on their earnings reports.
Interactive Brokers Earnings, Oracle Targets
Interactive Brokers earnings were better than expected. But IBKR stock fell modestly before the open, signaling a drop below a buy point.
Late Thursday, Oracle said it expects revenue to rise at a 31% compound annual growth rate over the next five years, with AI cloud margin eventually surging. But Oracle stock fell modestly in extended trade after rising 3.1% to 313 on Thursday.
CSX earnings slightly beat forecasts, kicking off rail operators' results. Shares rose modestly in extended trade, suggesting a move above a 36.56 cup-with-handle buy point during the regular session. But CSX stock has gone sideways for several years, with its relative strength line in a long-term downtrend.
American Express earnings topped early Friday, with the Dow Jones credit card giant lifting full-year targets, but with EPS only raised to in line with consensus despite the Q3 beat. AmEx caters to more-affluent consumers, who are still spending at a solid clip. AXP stock edged higher in premarket trade, signaling a move back above the 50-day line but not a buy point.
Stock Market Rally
The stock market rally opened solidly higher Thursday, but reversed lower as regional bank concerns picked up.
The Dow Jones Industrial Average fell 0.65% in Thursday's stock market trading and the S&P 500 index lost 0.6%, both undercutting their 21-day lines. The Nasdaq composite shed 0.5%, just holding its 21-day. The major indexes continue to trade within last Friday's action.
The small-cap Russell 2000 tumbled 2.1% amid its regional bank exposure. That's after hitting record highs Wednesday.
A number of big speculative winners, including quantum play IonQ and nuclear startup Oklo are seeing some selling. So are "Trump equity plays" such as MP Materials and Lithium Americas.
Those names continued to fall early Friday.
On the upside, Micron Technology and other memory plays were strong Thursday, along with gold plays.
Oil, Yields Hit New Lows
U.S. crude oil prices fell 1.4% to $57.46 a barrel, a fresh five-month closing low.
The 10-year Treasury yield fell seven basis points to 3.98%, the lowest level in six months and the lowest close in a year. The two-year yield sank eight basis point to 3.43%, hitting a three-year low.
A surprise negative Philly Fed manufacturing index reading and a tepid beige book report weighed on yields. Bad loan concerns, China trade tensions and the ongoing government shutdown add to safe-haven flows.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF retreated 1.65%. The iShares Expanded Tech-Software Sector ETF declined 0.4%. The VanEck Vectors Semiconductor ETF advanced 0.4%, with Taiwan Semi stock a major component.
ARK Innovation ETF slumped 2.9% and ARK Genomics ETF gave up 0.6%. Tesla stock is the No. 1 holding across ARK Invest's ETFs. TSLA fell 1.5%, but held key support and remains close to an early entry heading into next week's earnings.
SPDR S&P Metals & Mining ETF slid 1.2%. The Industrial Select Sector SPDR Fund fell 0.7%. The Financial Select SPDR ETF 2.8%.
Best Growth Stocks To Buy And Watch
What To Do Now
Choppy markets, especially with big intraday swings, are extremely difficult to navigate. There's enough strength to trigger a healthy number of buy signals, but with rapid retreats to shake investors out.
Investors should still have significant holdings. Exposure may be grinding lower from cutting losers and taking profits in winners while either eschewing new buys or quickly exiting new positions.
Some recent buying opportunities have worked, so nimble investors can keep trying. But look for early entries and be ready to exit quickly. Consider smaller position sizes. Definitely don't buy extended.
Keep working on watchlists and following sell rules.
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.
