Dow Jones futures rose slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. Trump tariff letters and other news remains in focus.
Dow giant Merck announced before the open that it will buy Verona Pharma, focused on respiratory diseases, for about $10 billion, or $107 per ADS. Merck stock was little changed while Verona shot up 20% to above 104.
The stock market rally had a narrowly mixed session on the major indexes. Trump tariff headlines were in focus. Tesla rose slightly after Monday's sell-off, but pared gains as CEO Elon Musk told a long-term bull to "shut up" for saying that the board "needs to act."
It was a tough day for many leaders. Toast and Chefs' Warehouse reversed lower from breakouts. Gold and heavy construction plays were losers.
But AI chip and hardware stocks showed strength, including Advanced Micro Devices, Super Micro Computer, Arista Networks.
The embedded video reviews Tuesday's market action and analyzes AMD stock, Qifu Technology and Chefs' Warehouse.
Dow Jones Futures Today
Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.2%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Trump Tariffs
President Donald Trump said he will continue to send out more tariff letters for various countries on Wednesday, stressing the new rates will start on Aug. 1, with no further delays. The latest country rates are only slight tweaks on the April 2 "Liberation Day" tariffs, which triggered a massive market sell-off that spurred Trump to largely delay them. So far, investors have taken the revised rates in stride, perhaps assuming that there will be changes or further relief.
Trump has not sent out a new letter to the European Union, which says it hopes to reach a deal by Aug. 1.
Trump said he would impose a 50% tariff on copper imports, higher than expected. U.S. copper prices spiked 13.25% to a record high, the biggest one-day gain ever. Freeport-McMoRan, with significant U.S. operations, popped 2.5%. FCX stock is working up the right side of a long, deep base.
Trump said he'll announce up to 200% tariffs on pharmaceutical imports "very soon," though they might not take effect for 12-to-18 months.
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Stock Market Rally Tuesday
The stock market rally had a quiet session. The Dow Jones Industrial Average fell 0.4% in Tuesday's stock market trading, with JPMorgan Chase and Goldman Sachs weighing on blue chips. The S&P 500 index lost a fraction. The Nasdaq edged higher. The small-cap Russell 2000 rose 0.7% after leading Monday's slide.
After rallying to highs in the prior two weeks, the market may need time to digest recent gains.
Some leading stocks had tough outings. Toast stock broke out at the open, but reversed for a 2.9% loss. Chefs' Warehouse dived 6.4% after breaking out Monday, though it did close above its 50-day, according to MarketSurge. Heavy construction firms such as Construction Partners had sizable losses while gold and silver miners were hammered.
AI chip and hardware plays had a good day, with AMD, Super Micro and Arista Networks stock, up 2.2%, 4.25% and 1.9% respectively. Super Micro stock now has a handle buy point. AMD stock has a too-low handle entry after a strong run. Arista is testing recent highs that could serve as a de facto handle.
U.S. crude oil prices rose 0.6% to $68.33 a barrel.
The 10-year Treasury yield climbed two basis points to 4.415%, up nearly 19 basis points over the last five sessions.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.65%. The iShares Expanded Tech-Software Sector ETF rose 0.3%. The VanEck Vectors Semiconductor ETF gained 1.3%, with AMD stock a notable holding. ARK Innovation ETF advanced 0.65%, with Tesla stock the No. 1 holding across ARK Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 0.8%, with FCX stock a top-10 holding. The Energy Select SPDR ETF popped 2.7%. The Financial Select SPDR ETF retreated 0.9%.
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Elon Musk Lashes Out At Tesla Bull Dan Ives
Wedbush analyst Dan Ives, a longtime Tesla stock bull, wrote in a Tuesday note that the board needs to "act now" to rein in Musk. Over the weekend, Musk said he is forming the "America Party" to challenge President Trump and the two-party system.
Ives said the long-dormant board should give Musk a big new pay package and voting power, on condition that he spend a lot of time at Tesla and that they oversee his "political ambitions."
Musk, replying on his social site X, wrote, "Shut up, Dan."
Separately, Musk wrote, "How can people be expected to have faith in Trump if he won't release the Epstein files?" Musk has repeatedly implied that President Trump is linked to the convicted sex offender, who died in prison in 2019.
Tesla stock rose 1.3% to 297.81, off session highs. On Monday, TSLA stock tumbled 6.8%, the S&P 500's worst performer.
Late Tuesday, Musk's X disabled AI chatbot Grok after it made a number of racist and anti-Semitic statements.
What To Do Now
The stock market rally looks fine on the major indexes, pausing this week after big runs. Leading stocks have been mixed, with some breakouts faltering or failing.
The risk-reward ratio for new buys may be tilted slightly toward risk in the very near term. It's still a time to be heavily invested, but cut your losers.
Work on watchlists and have your strategies in place for scaling out of positions.
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.
