Dow Jones futures fell modestly early Friday, along with S&P 500 futures and Nasdaq futures, as President Donald Trump said China had "violated" their preliminary trade deal. The Fed's inflation gauge will be released before the open. Costco Wholesale, Zscaler, Ulta Beauty and Dell Technologies were overnight earnings movers.
The stock market rally opened solidly Thursday on Nvidia earnings as well as a federal court striking down many Trump tariffs, but the Nasdaq quickly came off highs. The major indexes closed modestly higher.
Nvidia stock broke out, but closed well off early peaks. Several other stocks flashed buy signals initially, but most pared gains significantly or even turned lower.
Dow Jones Futures Today
Dow Jones futures fell 0.45% vs. fair value. S&P 500 futures sank 0.6% and Nasdaq 100 futures lost 0.6%.
Futures were little changed until Trump posted on Truth Social that China has "totally violated its agreement with us."
Crude oil futures fell 1%, reversing a gain.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Fed Inflation Gauge
The Fed's favorite inflation gauge, the core PCE price index, will be released at 8:30 a.m. ET. Economists expect a slim 0.1% rise in April, with core PCE inflation edging down to 2.5% vs. a year earlier. That would be a four-year low.
Key Earnings
COST stock edged lower early Friday after Costco earnings and revenue slightly topped, but same-store sales fell short. Shares dipped 0.4% in Thursday's session to 1,008.74, a little further below a 1,018 cup-with-handle buy point and just under the 21-day line.
ZS stock climbed modestly in extended trade as Zscaler earnings topped. The cybersecurity stock fell 1% to 251.11 on Thursday but is still near a 52-week high. Zscaler stock is extended from a base cleared in late April but is at the top of a 15-month consolidation with a possible 259.61 buy point.
Dell stock tilted lower as earnings missed but the PC, storage and server play raised full-year profit guidance. Shares edged down 0.2% to 113.57 on Thursday despite being an Nvidia partner, though they held the 200-day line. Investors could use the short-term high of 116.13 as an aggressive entry.
Ulta Beauty stock jumped in extended action on strong earnings, decisively clearing a shelf just above a cup-with-handle buy point. The beauty products retailer rose 1.15% Thursday.
Gap dived more than 10% after the apparel retailer sees big tariff costs but doesn't plan significant price hikes. Gap beat quarterly estimates.
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Stock Market Rally
The stock market rally opened with tech-led gains but those soon wilted. Nvidia pared gains during the session but even at its peak didn't offer a lot of coattails.
Markets tried to assess a federal trade court's late Wednesday ruling that most Trump tariffs are illegal. An appeals court reinstated the tariffs Thursday temporarily. President Donald Trump also has many other trade powers to restore many of his tariffs.
The Dow Jones Industrial Average rose 0.3% in Thursday's stock market trading, near session highs but still below the 200-day line. The S&P 500 index and Nasdaq composite climbed 0.4%. The small-cap Russell 2000 advanced 0.3%.
The Invesco S&P 500 Equal Weight ETF rose 0.25%, retaking the 200-day line.
The First Trust Nasdaq 100 Equal Weighted Index ETF fell 0.2%.
U.S. crude oil prices fell 1.5% to $60.94 a barrel.
The 10-year Treasury yield fell 5.5 basis points to 4.42%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1.2%. The iShares Expanded Tech-Software Sector ETF sank 0.7%, with Zscaler stock in IGV. The VanEck Vectors Semiconductor ETF rose 0.7%. Nvidia stock is the dominant SMH holding.
ARK Innovation ETF declined 0.3% and ARK Genomics ETF retreated 0.6%.
The Health Care Select Sector SPDR Fund gained 0.7%, the Industrial Select Sector SPDR Fund edged up 0.1% and the Financial Select SPDR ETF rose 0.5%.
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Nvidia Stock
Nvidia stock rose 3.2% to 135.18 Thursday, clearing a 137.40 handle buy point. But shares had jumped to 143.49 soon after the open.
Shares edged lower early Friday, still holding the entry.
Late Wednesday, the AI chip giant reported stronger-than-expected first-quarter earnings and sales growth. Nvidia guided slightly lower on Q2, due to new restrictions on chip sales to China, but hailed broader AI growth.
AI peers Broadcom, Taiwan Semiconductor rose slightly. Broadcom moved up within a buy zone while Taiwan Semi stock peeked back above a cup-with-handle buy point, according to MarketSurge.
What To Do Now
Thursday showed why it's a good idea to wait a few minutes after the open before making new buys. Not only did most stocks quickly pare gains, even Nvidia, but some such as Nutanix looked actionable in the first minute but then immediately began sliding.
Overall, Thursday's action was disappointing given the excitement heading into the session. But the S&P 500 and Nasdaq are still faring well, not far from record highs.
A lot of stocks could be actionable with a little market strength, so have your watchlists ready. But if the market weakens significantly investors will want to reduce exposure. So have your exit plans up to date.
Broadcom stock is on IBD Leaderboard and the IBD Big Cap 20. Zscaler is on the IBD 50.
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