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ED CARSON

Dow Jones Futures Fall Amid U.S.-China Trade 'Framework'; Tesla Robotaxi Launch June 22

Dow Jones futures fell slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. Late Tuesday, the U.S. and China reached a tentative "framework" with the U.S. while Elon Musk said that Tesla robotaxi rides will "tentatively" start on June 22. The CPI inflation report for May is due before the open.

The stock market rally saw modest gains Tuesday, as Tesla jumped on robotaxi buzz while Google parent Alphabet flashed a buy signal. Chip stocks kept rising on hopes for eased U.S. export curbs, along with solid sales from Nvidia chipmaker Taiwan Semiconductor.

But underneath, it was a weak day for many growth stocks.

The video embedded in this article reviews Tuesday's market action and analyzes Quanta Services, Exelixis and Google stock.

Dow Jones Futures Today

Dow Jones futures fell 0.15% vs. fair value. S&P 500 futures dipped 0.1% and Nasdaq 100 futures lost 0.1%.

The 10-year Treasury yield edged up to 4.5%. Crude oil rose more than 1%.

Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

China Trade Talks Yield 'Framework'

U.S. and Chinese officials announced late Tuesday that there's a "framework" to implement the "Geneva consensus" following two days of talks in London. The delegations will take the proposal back to President Donald Trump and Chinese President Xi Jinping for their approval.

U.S. officials say the framework should resolve issues regarding rare earths shipments. The Chinese team reportedly pushed for the U.S. to ease advanced chip curbs on China, but it's not clear yet what they got.

On May 12, after Geneva talks, the U.S. slashed tariffs on Chinese goods to 30% from 145% for 90 days, while China cut duties on American goods to 10% from 125%. On June 5, Trump and XI held a phone call, leading to the London talks.

Separately, the U.S. and Mexico are near a deal to remove President Trump's 50% tariffs on steel imports up to a certain limit, Bloomberg reported. U.S. steel stocks tumbled overnight.

The European Union expects trade talks with the U.S. to stretch beyond Trump's July 9 deadline, Bloomberg reported, citing sources. At best, an accord in principle might be reached by then. Trump has threatened to impose 50% tariffs on EU goods by that date.

Also, a U.S. appeals court said Tuesday night that "Liberation Day" Trump tariffs can continue to stay in place for a time as legal fights continue. A trade court ruled last month that Trump exceeded his authority when making those global tariffs.

Tesla Robotaxis To Start June 22

The Tesla robotaxi service will "tentatively" begin in Austin on June 22, CEO Elon Musk wrote on his social site X Tuesday night. Musk said the date could still shift. Tesla had previously only said that the Austin robotaxi kickoff would be in June. Bloomberg recently reported that it might happen on June 12.

Musk added the first ride from the Austin factory to a customer's house will be on June 28.

Musk wrote on X early Wednesday that he regrets some of last week's posts about President Trump. "They went too far."

Tesla stock rose modestly early Wednesday.

Shares jumped 5.7% to 326.09 on Tuesday, reclaiming the 21-day line after retaking the 200-day on Monday.

The official Tesla X account posted a message during Tuesday's session with the emoji for a robot and a taxi. A brief video showed a Model Y driving autonomously on public streets with a trailing Model Y. Musk wrote that it's using a "new version" of Full Self Driving software not yet available to FSD owners.

Meanwhile, weekly Tesla China EV registrations were soft, with second-quarter sales still lagging the seasonally slow Q1.

Separately, Tesla rival BYD leaped 6.1% to 17.8, back above the 21-day line and an old 17.78 buy point that may no longer be valid.

Tesla Vs. BYD Is Barely A Contest In EVs. Elon Musk Bets All On Robotaxis.

Other News

After the close, GameStop, the mall-based video retailer turned meme stock turned bitcoin buyer, reported mixed quarterly results. GME stock fell late after just holding a buy point in Tuesday's session.

Meta Platforms is near a deal to invest $14 billion in Scale AI and is hiring Scale CEO Alexandr Wang to help the tech giant push AI, CNBC reported late Tuesday.

On Wednesday at Nvidia's GTC Paris event, CEO Jensen Huang said, "Quantum computing is reaching an inflection point." Huang earlier this year had been more skeptical of quantum computing. Quantum stocks rose early Wednesday.

CPI Inflation Report

The Labor Department is scheduled to release the May consumer price index at 8:30 a.m. ET. Economists expect to see some tariff impact as retailers pass on higher costs.

The overall CPI is expected to rise 0.2% vs. April. CPI inflation should pick up to 2.5% vs. a year earlier from April's 2.3%.

Core CPI, which excludes food and energy, is seen climbing 0.3%. Core CPI inflation is forecast to tick up to 2.9% from April's 2.8%.

On Thursday, the producer price index is on tap.

Join IBD experts as they analyze leading stocks and the market on IBD Live

Stock Market Rally

The stock market rally saw modest gains on the major indexes, with Tesla and some other megacaps such as Google leading the way.

The Dow Jones Industrial Average rose 0.25% in Tuesday's stock market trading. The S&P 500 index advanced 0.55%. The Nasdaq composite advanced 0.6%. The small-cap Russell 2000 also closed up 0.6%, nearing its 200-day line.

But the Innovator IBD 50 ETF retreated 1.65%, with the IBD 50 list showing broad losses. While FFTY and growth generally came off intraday lows, many recent breakouts are struggling.

Chip stocks continued to rally on hopes for eased U.S. export curbs from ongoing China trade talks. Solid sales from Nvidia chipmaker Taiwan Semiconductor also helped.

Taiwan Semiconductor stock rose 2.6% on Tuesday, further extended from a buy point. The chip foundry giant's May sales jumped 39.6% vs. a year earlier.

U.S. crude oil prices fell 0.5% to $64.98 a barrel, reversing from solid intraday gains. The 10-year Treasury yield dipped one basis point to 4.47%.

Time The Market With IBD's ETF Market Strategy

Google Stock Rises On AI News

Google stock rose 1.4% to 178.62, clearing a short-term peak of 176.77 above the 200-day line. That offered an early entry. Shares came off highs but are on a five-session win streak. GOOGL stock is a long way from a 207.05 consolidation buy point, according to MarketSurge. Also, the relative strength line hasn't made much of a recovery.

AI startup giant OpenAI will add Google Cloud to its list of data center partners, according to a report. That would be a surprise because OpenAI's ChatGPT has threatened Google's core search advertising business.

Separately, Google is reportedly offering buyouts to employees in the core search and ad units.

What To Do Now

The stock market rally looks solid on the major indexes. But growth stocks had a rough day while several leading groups have had a few tough sessions. For stocks that are greatly extended, a modest or even solid loss may be technically normal, but many recent buys are underwater.

Active investors win or lose based on what they hold, not what the S&P 500 is doing. They may have cut losses or taken quick profits on various positions on Tuesday, especially if their portfolios saw widespread red ink.

But keep working on watchlists, including stocks that you may have cut recently. Definitely have your exit strategies ready.

Nvidia stock and Quanta Services are on the IBD 50. Quanta Services stock is on the IBD Big Cap 20.

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.

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