Dow futures were slightly lower overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally was sold off on Thursday, as the S&P 500 and Nasdaq hit resistance at key levels and reversed sharply lower. Treasury yields jumped to a three-year high as Federal Reserve Chairman Jerome Powell said controlling inflation was “absolutely necessary” and pointed to a significant rise in interest rates early next month.
The ugly market reversal has so far been warning investors to reduce the already modest exposure. Be wary of early morning moves, breakouts, and especially growth stocks.
On the upside, airlines saw a strong business session, with United Airlines (UAL) The rise in forecasts for the profitable 2nd and 2022 quarters. American Airlines (AAL) also raced higher on results and steering, but trimmed the gains.
Growth stocks were the biggest losers. fortinet (FTNT) broke out in the past a buy point Soon after opening on Thursday, it reversed lower. Expedia (EXPE) cleared the trend line Thursday morning, but reversed lower after that.
Mining stocks have been big gainers over the past year. But they retreated koi (AA) And Freeport McMorran (FCXBoth warned of rising costs and declining production. It came after poor production guidance from several other big miners this week.
Intuitive Surgical Profits Little beat views. ISRG stock fell strongly overnight. Shares fell in late January but are still recovering. However, Intuitive Surgical’s earnings report may provide insight into the trends of post-Covid medical procedures for other companies, such as Edwards Live Science (EW).
Capture lost profit and earnings views, although the number of users is up strongly. SNAP stock initially declined, then rose after hours of trading before paring gains. Shares have fallen since a rebound in early April fizzled out.
Tesla, Nucor, Newmont Mining and EW . shares are working IBD Leaderboard. FTNT stock is on Long-term leaders of IBD. Tesla and CLF stocks are located in defect 50. It was Fortinet on Wednesday IBD stock today While EXPE shares were on Thursday.
Fed Chair Powell: Raising rates ‘quickly’
Federal Reserve Chairman Jerome Powell said on Thursday that controlling inflation is “absolutely necessary”. He added that a 50-point rate hike is “on the table” at the May 3-4 meeting, saying that “moving a little bit more quickly” in raising rates is appropriate.
Fed Chairman Powell reinforced what investors already know. Markets were pricing in a half-point rate hike by the Fed for the next few meetings, along with the start of balance sheet cuts.
The 10-year Treasury yield rose 8 basis points to 2.92%, the highest level since late 2018.
Dow jones futures contracts today
Dow futures are down 0.35% against fair value. S&P 500 futures lost 0.45% and Nasdaq 100 futures lost 0.55%.
The 10-year Treasury yield rose to 2.95%.
stock market rise
The stock market rally came like a lion but came out like a lamb.
The Dow Jones Industrial Average is down just over 1% on Thursday stock market trading. The S&P 500 fell 1.5%. The Nasdaq Composite Index sank 2.1%. Small-cap Russell 2000 was sold at 2.3%.
US crude oil prices rose 1.6% to $103.79 a barrel.
between the Best ETFsThe Innovator IBD 50 ETF (fifty) is down 3.5%, while the Innovator IBD Breakout Opportunities ETF is down 3.fit) waiver of 2.5%. iShares Expanded Technology and Software Fund (ETF)IGV) declined by 3.1%. VanEck Vectors Semiconductor Corporation (SMH) down by 2.7%.
Shares reflect more speculative stories, the ARK Innovation ETF (see you) is down 5% and the ARK Genomics ETF (ARKG) 4.9%. Both are sharply lower for the week and are near their March lows. Tesla stock continues to rank number one among Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) is down 6.2%, with notable holdings in FCX, Alcoa and Newmont Mining shares. Global Infrastructure Development Fund X US (cradle) gave up 1.4%. NUE stock is the largest in the PAVE ETF, which also owns stakes in Steel Dynamics, Cleveland-Cliffs and Alcoa.
US Global Gates Foundation (ETF)Planes) up 2.8%, with American Airlines and United Airlines being the top two components. SPDR S&P Homebuilders ETF (XHB) decreased 1.3%. SPDR Specific Energy Fund (SPDR ETF)XLE) slipped 3.2% and the Financial Select SPDR ETF (XLF) gave up 1.6%. SPDR Healthcare Sector Selection Fund (XLV) drowned 1.1%
Tesla stock jumped as high as 1092.22 Thursday morning after its earnings report exploded late Wednesday. But as Thursday’s market rally turned south, TSLA stock fell. Shares closed 3.2% higher at 1,08.78, near session lows. If you cut the opening high, the Tesla stock would still be in a range around the 1000 level.
Even on the intraday rallies, Tesla stock didn’t look doable. It extended well from the 50-day line while still well below 1152.87 cup with handle Point purchase, according to MarketSmith Analysis. It did not break the trend line on Thursday, so there was no early entry.
One positive thing: Thursday’s rally could be an early entry. The longer handle, the handle that qualifies to be its own base within the messy big consolidation, will allow the major averages to catch up.
Market Rise Analysis
Strong openers and weak closes are the hallmarks of a bad market, not a strong stock market rebound.
The Nasdaq rose 1.9% in the morning to peek at its 50-day line, reversing a sharp loss. But forget about the 50 days. The NASDAQ index did not close above the level 10 days streak Since April 4th.
The S&P 500 started Thursday with a recovery of the 200-day streak, but finished below the 50-day streak. The Dow, which closed above the 200 line on Wednesday, briefly surpassed its March highs before pulling back as well.
Russell 2000 was again stabbed below the 50-day line. Market supply, which improved somewhat in late March, has returned to its lowest levels.
All of this came with higher trading volumes on the Nasdaq and New York Stock Exchanges compared to the previous session.
Meanwhile, heavy selling in mining stocks on Thursday was noticeable. Perhaps this is just another jolt to these names, who have been volatile in their ascent. But chain companies warning about costs and production is not a good sign.
Fertilizer stocks were sold off heavily, but mostly to near the 21-day moving average.
Medical stocks in general look strong, despite Thursday’s losses. Energy stocks fell Thursday, but they still look strong. Defense stocks fell sharply, but this may provide a good pullback for many charts. Several defense companies are reporting earnings next week. Travel stocks are up, a lot. Airlines shares may be due to break. Hotel stocks reversed lower trend. EXPE stock was particularly disappointing, flashing a buy signal before selling.
Fortinet stock tried to reverse the growth trend, but it made a really ugly reversal.
Most of the other growth names aren’t in a position to be frustrated, threatening to undermine their recent lows. nvidia (NVDAHe did just that, dropping to a six-month low on Thursday.
What are you doing now
This is not a healthy market recovery. With major indices reversing lower from key levels, investors should consider reducing the already modest exposure. Tesla stock closed near lows, and Fortinet and Expedia’s reversal indicates the risk of buying stocks in the opening minutes, especially growth names.
In the event of a divided market rising, investors should focus on the leading sectors. But you can’t count on them staying strong. Selling shares in Alcoa and other miners point to the importance of taking some partial profits. It’s also a reminder not to focus too much on a specific part of the market.
While the market rally could start to pick up, hope is not a strategy. The Nasdaq broke its lows last week and is closer to its March low than its March peak.
In the next two weeks, investors will get the bulk of the profits, in addition to the next rate hike by the Federal Reserve. This can provide market clarity, for good or bad. For now, the upcoming headlines present a great deal of uncertainty.
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