Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. The April CPI inflation report and retail sales are due before Wednesday’s open.
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The stock market rally saw modest to solid gains Tuesday, gaining steam in the afternoon with the Nasdaq setting a record high on the major indexes, though the Nasdaq composite set a record close. The April producer price index came in hotter than expected, but March data saw big downward revisions. Also, various components that feed into the Fed’s favorite inflation gauge, the core PCE price index, generally came in light. Fed chief Jerome Powell, speaking Tuesday, noted the “mixed” PPI reading.
Meme stocks such as GameStop (GME) and AMC Entertainment (AMC) soared yet again, though they came off highs.
Nvidia (NVDA) is moving toward a buy point with earnings a week away.
Embraer (ERJ), Pure Storage (PSTG), On Holding (ONON), CrowdStrike (CRWD) and Oracle (ORCL) broke out or flashed other buy signals.
Earnings
Nu Holdings (NU) topped Q1 revenue targets Tuesday night. But shares of the Brazilian fintech rose slightly, not far from a buy point.
Chinese e-commerce giant JD.com (JD) and India-based travel site MakeMyTrip (MMYT) report early Wednesday.
Nvidia stock is on IBD Leaderboard, with Embraer and MakeMyTrip stock on the Leaderboard watchlist. Nvidia, CrowdStrike and Pure Storage stock are on SwingTrader. Nvidia, MakeMyTrip and CrowdStrike stock are on the IBD 50. CrowdStrike was Tuesday’s IBD Stock Of The Day.
The video embedded in this article discusses Tuesday’s market action and analyzes CrowdStrike, Pure Storage and ONON stock.
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures and Nasdaq 100 futures were little changed.
Investors will get the April consumer price index, April retail sales and the May Empire State Manufacturing Index at 8:30 a.m. ET. Those will be sure to swing Dow Jones futures and Treasury yields.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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CPI Inflation
Economists expect overall and core consumer prices to rise 0.3% in April after a 0.4% gain in March. Overall CPI inflation should dip to 3.4% vs. a year earlier from March’s 3.5%. Core CPI inflation should cool to 3.6% from 3.8%.
Meanwhile, April retail sales should climb a solid 0.4% after March’s 0.7% gain. Sales excluding autos and gas are seen up just 0.1% after March’s 1% jump.
The New York Fed’s Empire State manufacturing index is seen rising to -10 from April’s -14.3, but still below the break-even level.
Stock Market Rally
The stock market rally built momentum Tuesday afternoon.
The Dow Jones Industrial Average rose 0.3% in Tuesday’s stock market trading. The S&P 500 index climbed 0.5%, just below record highs. The Nasdaq composite rose 0.75%, marking a fresh closing high, just below its March 21 all-time best. The small-cap Russell 2000 jumped 1.1%.
That the key indexes are trading around record highs after a solid advance has been constructive. Leading stocks have looked even better, with some flashing buy signals in recent days and many more setting up.
U.S. crude oil prices fell 1.4% to $78.02 a barrel.
The 10-year Treasury yield fell 3.5 basis points to 4.44%, reversing lower from an intraday peak of 4.53%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.6%, with Oracle and CRWD stock both members. The VanEck Vectors Semiconductor ETF (SMH) gained 1.7%. NVDA stock is the dominant SMH holding.
SPDR S&P Metals & Mining ETF (XME) advanced 1%. The SPDR S&P Homebuilders ETF (XHB) stepped up 0.9%. The Energy Select SPDR ETF (XLE) edged up 0.1% and the Health Care Select Sector SPDR Fund (XLV) rose 0.4%.
The Industrial Select Sector SPDR Fund (XLI) closed just below break-even. The Financial Select SPDR ETF (XLF) climbed 0.5%.
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GME Stock, AMC Entertainment
Meme stocks continued to soar, led by OG meme plays GameStop and AMC Entertainment.
GameStop stock skyrocketed 60% to 48.75 after spiking 74% on Monday. GME stock hit 64.83 intraday.
AMC stock shot up 32% to 6.85, but closed below its 200-day moving average. That’s after soaring 78% on Monday. Shares hit 11.88 intraday.
GameStop and AMC were active overnight, rising solidly.
This week’s surge in meme stocks came as Keith Gill, aka Roaring Kitty, returned to social media for the first time in three years with, what else, various memes. Gill helped spark the original meme stock rally in 2021.
Stocks In Buy Zones
Embraer stock jumped 9.1% to 28.85, running past a 27.25 flat-base buy point in very heavy volume. The Brazilian jet maker is now slightly extended.
Pure Storage stock climbed 3.8% to 56.41, topping a 55.09 double-bottom buy point.
On Holding stock gapped up 18.3% to 36.30, clearing a short-term high of 34.93 and the official 36.15 buy point, according to MarketSurge. On Holding earnings more than doubled vs. a year earlier, crushing estimates.
CrowdStrike stock rose 3.25% to 329.55, continuing to move above its 50-day line. It’s actionable now, or investors could use Friday’s high of 327.50 as an early entry. The official buy point is 365, but investors could use a move above the 338 level as an early entry.
Oracle stock rose 3.9% to 120.87, retaking the 50-day line in double normal volume. The database software giant has a 132.77 buy point from a new base next to a longer consolidation. But investors could use Tuesday’s move as an early entry into ORCL stock. Shares jumped Tuesday on a report that Elon Musk’s artificial intelligence startup xAI is in talks with Oracle on a multiyear, $10 billion cloud-computing deal
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Nvidia Stock
NVDA stock climbed 1.1% to 913.56 on Tuesday, continuing to trade tightly over the last several sessions, modestly above the 50-day line. Nvidia stock has a 922.20 cup-with-handle buy point.
The AI chip leader reports earnings on May 22.
What To Do Now
The stock market rally continues to trade tightly, slightly below record highs. That breather is letting more stocks set up while names that are making gains quickly see improving relative strength.
Some stocks like Pure Storage and Embraer are breaking out while others like Nvidia are setting up.
The CPI inflation report and other economic data will be important for Wednesday, but it’s already time to look ahead to Nvidia’s results next week. Nvidia earnings and guidance will be key for the AI sector and the overall market rally.
So be careful how much you add exposure in the next few days, especially in the AI/tech space.
Definitely work on your watchlists. A lot of stocks are moving into position.
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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