Dow Jones futures rose slightly early Wednesday, along with S&P 500 futures and Nasdaq futures. Luxury homebuilder Toll Brothers (TOL) and Target (TGT) headlined earnings overnight. A big payroll provision and Fed minutes are on tap.
Palo Alto Networks (PANW) and Netflix (NFLX) flashed buy signals. Meta Platforms (META), Arista Networks (ANET) and Shift4 (FOUR) are pausing bullishly.
Nvidia stock is on Leaderboard. Nvidia, Netflix, Arista and Meta stock are on the IBD 50. Arista stock is on the IBD Big Cap 20. Palo Alto Networks was Tuesday’s IBD Stock Of The Day.
The video embedded in the article discussed Tuesday’s market action and analyzed Palo Alto, Meta Platforms and Netflix stock.
Dow Jones Futures Today
Dow Jones futures rose 0.15% vs. fair value. S&P 500 futures advanced 0.15% and Nasdaq 100 futures climbed 0.1%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Earnings
Early Wednesday, Target reported better-than-expected second-quarter earnings and raised full-year EPS guidance.
TGT stock soared more than 10% before the open, signaling a gap above its 50-day and 200-day lines to a three-month high. Target could be building the right side of a consolidation going back to late March with a 181.86 buy point.
TJX Cos. (TJX) beat views before the open. Shares of the off-price retail giant rose modestly, signaling a breakout from a flat base.
Analog Devices (ADI) beat fiscal Q3 views early Wednesday, though EPS and sales fell sharply again. The analog chipmaker was little changed before the open.
Toll Brothers earnings beat views late Tuesday, with revenue edging above forecasts. It also raised guidance. TOL stock edged higher in premarket trade. The luxury builder dipped 0.1% Tuesday to 133.52, hitting resistance at a prior 135.37 buy point.
Key Economic News
At 10 a.m. ET, the Labor Department will issue a preliminary revision for nonfarm payrolls in the 12 months ending March 2024. A big downward revision of nearly 1 million is expected.
At 2 p.m. ET, Federal Reserve minutes from the July 30-31 policy meeting are due at 2 p.m. ET Wednesday. That will provide a little more color on Fed policy, but Powell’s Jackson Hole speech on Friday morning should be the highlight of the week.
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Stock Market Rally
The major indexes fell slightly on Tuesday, though small caps had solid losses.
The Dow Jones Industrial Average fell 0.2% in Tuesday’s stock market trading. The S&P 500 index slipped 0.2% and the Nasdaq composite dipped 0.3%, both snapping eight-session win streaks. The small-cap Russell 2000 slumped 1.2%.
The stock market rally taking a breather after a big run is healthy, especially with Fed chief Powell’s big speech Friday and Nvidia earnings on Aug. 28. It would give stocks some time to forge more-attractive bases and perhaps handles.
U.S. crude oil prices dipped 0.4% to $74.04 a barrel, down 5.3% over the last three sessions.
The 10-year Treasury yield fell five basis points to 3.82%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.65%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.2%, with PANW stock a notable holding. The VanEck Vectors Semiconductor ETF (SMH) fell 1.3%, with Nvidia stock the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sank 1.2% and ARK Genomics ETF (ARKG) retreated 1.8%.
SPDR S&P Metals & Mining ETF (XME) gave up 0.9%. The SPDR S&P Homebuilders ETF (XHB) lost 0.7%, with TOL stock a top-10 holding. The Energy Select SPDR ETF (XLE) tumbled 2.6% and the Health Care Select Sector SPDR Fund (XLV) gained 0.4%.
The Industrial Select Sector SPDR Fund (XLI) and Financial Select SPDR ETF (XLF) declined 0.3%.
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Nvidia Stock
Nvidia stock fell 2.1% to 127.25. That snapped a six-session win streak and was an inside day to Monday’s 4.35% spike. The AI chip giant now has a cup base with a 140.76 buy point, though investors could treat 136.15 as an early entry. Ideally, NVDA stock would forge a handle heading into earnings on Aug. 28.
Palo Alto Stock
Palo Alto stock gapped up 7.2% to 368.01 on Tuesday, racing past a 345.90 early entry within a deep consolidation. Once again, Palo Alto earnings and sales growth slowed, but next-generation annual recurring revenue from cloud-computing products jumped 43%.
Netflix Stock
Netflix stock climbed 1.45% to 698.54, just topping a 697.49 buy point from a shallow cup base. NFLX stock is not extended from the 50-day line, but Tuesday was the 10th up day in 11 sessions. The relative strength line hit a new high on a weekly chart, marked by a blue dot on a MarketSurge chart.
Meta Stock
Meta stock edged down 0.5% to 526.73, continuing to pause just below a 542.81 buy point from a consolidation forged next to a failed breakout.
Arista Stock
Arista stock edged up 0.5% to 353.79, perhaps working on a short handle in a consolidation going back to early July. A long pause makes the new base look better after whipsaw moves due to earnings and the early August market sell-off. Volume was weak on the subsequent bounce, however.
Shift4 Stock
Shift4 stock slumped 3.1% to 79.16. The payments play flashed some early entries recently due a big, high-volume rebound, partly due to earnings. Investors may want to wait for a handle to form, lowering the buy point. The current official buy point is 92.30 from a 39%-deep cup base, according to MarketSurge.
What To Do Now
The stock market rally continues to act well.
Investors should have taken advantage of the recent run to add exposure steadily over several days. Traders could have kept buying Tuesday, though pausing with the market ahead of Powell and Nvidia also makes a lot of sense.
The rally has been broad-based, so make sure your watchlists reflect that.
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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