Dow Jones futures fell modestly early Thursday, along with S&P 500 futures and Nasdaq futures as Treasury yields ticked higher and bitcoin kept running. The House narrowly approved the Trump tax bill before the open.
Snowflake, Zoom Communications and Urban Outfitters were earnings winners overnight.
The stock market rally suffered significant losses Wednesday on spiking Treasury yields as well as renewed AI chip curbs for Nvidia and others.
Nvidia stock and AI chip peer Broadcom reversed lower after flashing buy signals. Palantir Technologies fell solidly below a buy point.
However, Tesla rival XPeng gapped above a buy point on earnings. China EV peer Xiaomi is unveiling its so-called Model Y killer before New York's open.
Dow Jones Futures Today
Dow Jones futures lost 0.55% vs. fair value. S&P 500 futures lost 0.5% and Nasdaq 100 futures sank 0.4%.
The 10-year Treasury yield rose slightly to 4.62%, adding to Wednesday's gains.
Futures fell and Treasury yields rose early Thursday after the House of Representatives just passed President Donald Trump's tax-and-spending bill. The package, which will now go to the Senate, will cut taxes but also increase already-swollen deficits, a growing concern for bond markets.
Bitcoin climbed to around $111,000, hitting yet another record high overnight of $111,768.98. On Wednesday, bitcoin climbed 1.5% to $108,671.62 as of 4 p.m. ET after hitting $109,846.08 intraday.
Crude oil futures fell 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.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Earnings
Snowflake stock jumped in extended trade, signaling a breakout after the data analytics software play beat Q1 earnings. SNOW stock fell 2.1% to 82.27 in Wednesday's regular session after nearly hitting a 184.29 cup-with-handle buy point.
ZM stock edged higher overnight after Zoom earnings beat Q1 views. The video conferencing specialist fell 1% to 82.27 Wednesday. Zoom stock has an 85.07 early entry.
URBN stock gapped up, signaling a move far above a buy point. Urban Outfitters earnings easily beat, while sales also topped.
Stock Market Rally
The stock market rally tumbled in the afternoon on a weak Treasury auction, sending long-term yields soar. Also, a top White House official said the administration will keep existing efforts to bar China from advanced AI tech such as Nvidia chips.
The Dow Jones Industrial Average sold off 1.9% in Wednesday's stock market trading, back below the 200-day moving average, with UnitedHealth once again a drag. The S&P 500 index skidded 1.6%. The Nasdaq composite lost 1.4%. The small-cap Russell 2000 plunged 2.8%.
This still could be a constructive pullback, giving a little more depth to emerging handles and letting the moving averages catch up. However, if the S&P 500 and Nasdaq were to undercut their 200-day lines, it would be a serious concern.
The Nasdaq's downside, outside reversal session didn't look great. Worse, a number of leaders that broke out intraday or in recent days fell back.
Nvidia stock fell 1.9% to 131.81 after initially clearing an early entry of 136.35. The downside reversal engulfed the prior several days of trading. Broadcom edged down 0.8% to 229.73, reversing from an intraday high of 236.50, just above a brand-new 235.28 handle buy point. Palantir stock sank 4% to 120.58, below a 125.25 cup-with-handle buy point cleared on May 13, according to MarketSurge.
U.S. crude oil prices fell 0.7% to $61.57 a barrel.
Treasury Yields Spike Amid Auction, Trump Tax Bill
The 10-year Treasury yield leaped 11.5 basis points to 4.595%, the highest since Feb. 23. The yield is up 16 basis points so far this week. The 30-year Treasury yield jumped 12 basis points to 5.09%, the highest since October 2023.
Wednesday's specific trigger was a weak 20-year Treasury auction. But long-term yields are jumping this week following the Moody's late Friday move to strip the U.S. government of the top credit rating, citing a deteriorating fiscal picture over many years.
Trump's "big, beautiful" tax bill may also be worrying bond markets.
Growth ETFs
Among growth ETFs, the Innovator IBD 50 ETF declined 0.9%. The iShares Expanded Tech-Software Sector ETF lost 2.4%. Palantir stock is a major position with Zoom also in the ETF. The VanEck Vectors Semiconductor ETF shed 1.7%. Nvidia stock and Broadcom are huge SMH holdings.
ARK Innovation ETF gave up 3.1% and ARK Genomics ETF dived 5.3%. Tesla stock is the No. 1 holding across ARK Invest's ETFs.
Time The Market With IBD's ETF Market Strategy
XPeng Earnings, Tesla Model Y Killer
XPeng stock gapped up 13% to 22.25, clearing the 50-day line and a short-term high of 21.35, offering an early entry within a deep base. The China EV maker and Tesla rival reported a smaller-than-expected quarterly loss early Wednesday amid booming revenue and deliveries. XPeng expects to turn profitable in Q4.
China handset maker-turned-EV maker Xiaomi will unveil the YU7 crossover around 7 a.m. ET, taking on the Model Y. Xiaomi's first EV, the SU7 sedan, has outsold the Tesla Model 3 in China for several months. The official launch, with pricing and preorders, will take place in July.
Xiaomi's U.S. shares fell 1.8% to 34.50 on Wednesday, but held above a 34.26 cup-with-handle buy point. XIACY stock broke out Tuesday with a 4.9% gain after flashing an early entry Monday.
EV giant BYD rose 3.2% to 59.10, hitting yet another high and further extended from a base.
Tesla stock fell 2.7% to 334.62, just undercutting a few days of trading as it builds the right side of a very deep base. TSLA stock could be forging a handle on a weekly chart.
The Trump tax bill would eliminate the $7,500 EV tax credit and instead charge a $250 annual fee for EVs on help pay for roads.
What To Do Now
If the stock market rally finds support soon, then the recent action would be constructive. The S&P 500 and Nasdaq breaking lower would be a concern.
The market is in a power trend, but in the very short term investors may want to wait for signs of strength before adding new exposure. Definitely cut positions if solid gains are wiped out or cut outright losses short.
Days like Wednesday — or a lot worse — are why it's a good idea to add exposure gradually. Anyone taking new positions in, say, Broadcom, Nvidia or Palantir recently, might be sitting on modest losses now.
If the market does find its footing, many buying opportunities would develop quickly. So keep your watchlists up to date.
Broadcom stock and CrowdStrike are on the IBD Leaderboard. Meta stock is on SwingTrader. Palantir stock is on the IBD 50.
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.
