Dow Jones futures were up slightly after hours, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is out on Wednesday, along with key reports Delta Airlines (DAL) and Nvidia chipmaker Taiwan Semiconductor (TSM).
x
The stock market rally was generally higher on Tuesday, with investors wary of big moves ahead of the CPI inflation report. Expansion was positive, but many leaders came under pressure.
Nvidia ( NVDA ) broke recent lows on Tuesday but also found key support. It came as the parent of Google the alphabet (GOOGL) announced using a new in-house AI processor. Arm Holdings (ARM) design, reducing reliance on Nvidia chips. Intel (INTC) also unveiled an AI chip to take on Nvidia. Google stock moved further into the buy zone. ARM stock bounced early but reversed lower. Intel advanced after setting fresh 2024 lows.
Tesla ( TSLA ) extended gains on Elon Musk touting Robotaxis. Tesla stock is approaching key resistance.
Nvidia and ARM stocks are on the IBD leaderboard. Arm Holdings and Nvidia stocks are on the IBD 50. Nvidia stock is on the IBD Big Cap 20.
The video included in this article reviews Tuesday’s market action and analyzes Nvidia stock, Royal Caribbean (RCL) and Nutanics (NTNX)
CPI Inflation Report
The Labor Department will release the Consumer Price Index at 8:30 a.m. ET. CPI excluding food and energy is expected to increase by 0.3 percent.
Overall CPI inflation should rise 3.5% versus a year ago, up 3.2% from February. Core CPI inflation is seen easing from 3.8% to 3.7%.
Feed minutes for the March meeting will be released at 2 p.m. ET.
The producer price index for March will be out on Thursday morning.
These key economic reports came as the odds of a Fed rate cut in June turned into a toss-up.
Dow Jones Futures Today
Dow Jones futures rose a share vs. fair value. S&P 500 futures and Nasdaq 100 futures rose 0.1 percent.
The CPI inflation report will determine Dow Jones futures and Treasury yields.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and markets on IBD Live.
Stock market rally
The stock market rally had a quiet session on Tuesday, but key indexes improved from slightly lower to flat or slightly higher.
The Dow Jones Industrial Average closed partially lower in stock market trading on Tuesday. Meanwhile, the S&P 500 index climbed 0.1%. The Nasdaq Composite rose 0.3 percent. The small-cap Russell 2000 also rose 0.3 percent.
While the major indexes had a relatively quiet day, and winners outnumbered losers, many of the leaders were hurt, and not just Nvidia.
Royal Caribbean stock fell 3.7 percent, below a buy point. Decker Outdoor ( DECK ) sank 2.4 percent, closing below the 50-day line for the first time since late October. Kava Group ( CAVA ) fell 7.2% in its first 10-week line test of 2024.
But there were also many stocks that were well or advanced.
U.S. crude oil prices fell 1.4 percent to $85.23 a barrel.
The 10-year Treasury yield fell six basis points to 4.365%.
ETFs
Among developing ETFs, iShares’ Expanded Tech-Software Sector ETF ( IGV ) rose 0.3 percent. VanEck Vectors Semiconductor ETF ( SMH ) climbed 0.5%. Nvidia stock is by far the largest SMH holding, with Taiwan Semiconductor also a major member. Intel is also in SMH.
Reflecting more speculative stories, the ARK Innovation ETF ( ARKK ) and the ARK Genomics ETF ( ARKG ) both gained 1.1%. Tesla stock is a large holding in Arch Invest’s ETFs.
The SPDR S&P Metals & Mining ETF ( XME ) rose 1.1% and the Global X US Infrastructure Development ETF ( PAVE ) fell 0.5%. The US Global Jets ETF ( JETS ) rose 0.5 percent. The SPDR S&P Homebuilders ETF ( XHB ) fell 0.1 percent. The Energy Select SPDR ETF ( XLE ) closed fractionally higher and the Healthcare Select Sector SPDR Fund ( XLV ) rose 0.4 percent.
The Industrial Select Sector SPDR Fund ( XLI ) fell 0.2%. And the Financial Select SPDR ETF ( XLF ) retreated 0.6%.
Time the Market with IBD’s ETF Market Strategy
Nvidia stock
Nvidia stock fell to 830.22 on Wednesday, hitting its lowest level since March 1. But the AI ​​chip leader found support around the 10-week line, paring losses down 2% at 853.54. A strong move from the 10-week line, the first such test since the initial breakout in January, would provide a buying opportunity. NVDA stock is set to have a flat base later this week with a 974 buy point.
Nvidia faces increasing competition in the AI ​​space. Even if its chips stay a step ahead, competing products will hurt Nvidia’s sales and pricing on margins. Customers will want to diversify AI chip suppliers to avoid over-reliance on Nvidia.
Google Arm AI processor, Intel chip
Google held a major cloud computing event on Tuesday. A highlight was a new AI processor using the ARM design.
Additionally, Google stock climbed 1.1% to 156.60, still within range of the 152.15 handle buy point.
ARM stock rose to 135.41 shortly after the open, but closed down 1.9% at 126.81. Shares are finding support at the 21-day line, trading above the 50-day but below the 10-week. The wireless chip design giant has a 164 consolidation buy point, according to MarketSurge. But a downward sloping trendline or the 145 level may offer safe, earlier entries.
Meanwhile, Intel unveiled its Gaudi 3 AI chip to compete with Nvidia. Intel stock rose 0.9% after hitting intraday 2024 lows, continuing to trade below its all-important moving averages.
Tesla stock
Tesla stock rose 2.25 percent to 176.88 on Tuesday, following Monday’s 4.9 percent jump. Shares are rebounding from 11-month lows after Elon Musk promised to unveil Robotex on August 8. But it’s not clear if Tesla’s fully self-driving is ready to operate without a driver, what that would entail. TSLA stock is near its 10-week moving average, which has served as resistance at 2024.
Taiwan Semiconductor
Taiwan Semiconductor will release March and first-quarter sales figures early Wednesday. The foundry giant, which will report earnings next week, makes chips for Nvidia, apple (AAPL), Broadcom (AVGO), Google and many others. It is also a major buyer of chip equipment. Therefore, Taiwan Semi’s reports will have wide-ranging implications for the sector.
TSM stock climbed 1.8% to 145.40, extending Monday’s 1% advance but closing higher. Taiwan Semistock is operating on a potential new basis.
Delta revenue
Ahead of the opening, Delta’s revenue is expected to grow 45% from a year ago, while first-quarter revenue is expected to rise 6%. This starts the revenue for the US carriers.
Delta stock rose 0.7 percent to 47.32 on Tuesday. DAL stock has a handle buy point with 49.20 cups.
What should be done now?
Investors need patience in a sideways market, to see the major indexes and leading stocks break decisively. On Tuesday, the sideways market delivered a “most successful” session, with some leading stocks falling, some reversing lower, some finding support and some even making bullish moves. Who were
Wednesday’s CPI inflation report may or may not provide some clear direction for the market’s rally. Earnings season is in full swing, with major markets, sectors and stocks likely to go up or down, or perhaps both.
Right now, investors should work on their watch list. Leading stocks are testing key support levels and making bases in various sectors.
Read The Big Picture every day to stay in tune with market direction and leading stocks and sectors.
Please follow Ed Carson on threads @edcarson1971 and on X/Twitter. @IBD_ECarson For stock market updates and more.
You may also like:
Why the IBD Tool Makes Finding Top Stocks Easy
Want to make quick profits and avoid big losses? Try SwingTrader.
Best Growth Stocks to Buy and Watch
IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today.
Elon Musk teases Robotaxis after delivery dive BYD rolls out the pickup