Dow Jones Futures: Disney Pops and AI Play Skyrocket in ‘Closing’ Rally.

Dow Jones Futures: Disney Pops and AI Play Skyrocket in ‘Closing’ Rally.

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Dow Jones giant Disney and IPO Arm Holdings posted big gains overnight.




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The stock market rally continues to show strength, with the S&P 500 hitting a new record high and approaching the 5,000 mark. The Nasdaq set a new best high in two years.

But with so many big winners like Nvidia (NVDA) is extended and new buying opportunities are relatively limited, and it has once again become a “closed” market rally. If you are lightly invested, it is not easy to add more exposure, especially in real leaders.

Also, with Wednesday’s gains, the market is starting to look extended again.

So investors need to be patient.

Walt Disney (dis), backstage (cles), Holding arm (arm), Homogeneous power systems (mbour), Maxon (MK) and O’Reilly Automotive (ORLY) reported on Wednesday after the close.

Disney shares jumped in extended trading thanks to cost cuts that boosted profits, signaling an exit from a buy zone. ARM shares rose 20% on strong third-quarter results and raised full-year guidance, saying artificial intelligence is boosting sales. The monolithic powerhouse has rallied strongly, and is set to end the messy merger.

Qualys has been hobbled by mixed results and weak direction. Mckesson declined modestly despite topping the number of views. O’Reilly Auto pulled back to a buy point after sales emerged.

Denatress (DT) reports early Thursday.

ARM and Nvidia stock are on the IBD Leaderboard. NVDA stock is on SwingTrader. Monolithic Power and ORLY stocks are on IBD’s Watch List of Long-Term Leaders. DT and Nvidia stock are in the IBD 50.

Dow jones futures today

Dow futures rose versus fair value, with DIS shares higher. S&P 500 futures lost a small portion. Nasdaq 100 futures rose 0.1%.

The yield on the 10-year Treasury note fell to 4.09%.

Remember, an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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Stock market pool

The stock market rally continued to advance on Wednesday.

The Dow Jones Industrial Average rose 0.4% in stock market trading on Wednesday, a record closing high. The S&P 500 rose 0.8%, reaching a new all-time high and approaching the 5,000 point. The Nasdaq Composite gained 0.95% to reach its best levels since January 2022, not far from its November 2021 peak.

Nvidia shares rose 2.75% to 700.00, surpassing the 700 level for the first time.

Market breadth was slightly negative despite strong gains for the S&P 500 and Nasdaq.

The small-cap Russell 2000 fell 0.2%, holding only its 50-day line.

The Invesco S&P 500 ETF (RSP) rose 0.4%, lagging the S&P 500 but near its 52-week highs. The First Trust Nasdaq 100 Equilibrium ETF (QQEW) rose 0.75% versus the Nasdaq 100’s advance of 1%. But both reached record highs during the day.

US crude oil prices fell by 0.75% to $73.86 per barrel.

The yield on the 10-year Treasury note rose 2 basis points to 4.11%, returning to the 200-day line after testing the 50-day line.


Nvidia is king, but this frog may turn into a prince


ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 1.6% and the VanEck Vectors Semiconductor ETF (SMH) jumped 2%, both hitting record highs. Nvidia stock is the No. 1 stock in SMH, with MPWR also holding the stock.

Also reaching unprecedented levels: the Global PAVE rose 1.4%, XHB rose 1.7%, XLV rose 0.3%, and XLI rose 0.7%.

The SPDR S&P Metals & Mining ETF (XME) rose 0.5% and the US Global Jets ETF (JETS) rose 0.15%. The Energy Select SPDR ETF (XLE) rose 0.2%.

The Financial Select SPDR ETF (XLF) rose 0.75%, near its 52-week high. The SPDR S&P Regional Banking Fund (KRE) fell 0.3%, but closed at a two-month low.

Reflecting more speculative stocks, ARK Innovation ETF (ARKK) rose 1% but ARK Genomics ETF (ARKG) fell 2.3%.


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Market rise analysis

It’s hard to blame a market that is showing strength. However, the Nasdaq is 5.7% above its 50-day line, with the Nasdaq 100 6% above this key level. The S&P 500 rose 5.1% over its 50-day period. All of these things are expanding, as downside risks start to rise. These indexes could certainly expand a lot before that happens, but that’s something to note.

QQEW and multi-sector ETFs at highs highlight that market leadership remains broad.

But as the market refuses to take much of a break, leading stocks look increasingly overextended, alienating investors.

Nvidia, which leads the S&P 500 for the second year in a row, is already up about 42% in 2024. But it’s 31% above its 50-day line.

Some second-tier leaders issue buy signals. Many have struggled to maintain these entries, at least for a time, although many were in good shape at Wednesday’s rally. Settings or other buying opportunities are for stocks with upcoming dividends, e.g Confirm Holding (Afram).

What are you doing now

In a rising market, patience is key.

If you are a profitable stock and have a large exposure, you can choose to add gradually or take some partial profits, but you can ride the positive trend to a large extent.

If you have relatively little exposure, a rising market can be frustrating. You see leading indices and stocks rising without you. But you don’t want to chase the market, especially with the Nasdaq expanding and leading the big rallies.

You can look to buy second-tier stocks because they are flashing buy signals. Some of them may do well, but others may be relatively underdeveloped or faltering. So add carefully. If the market rally tapers off relatively soon, these stocks could falter.

Eventually, the market’s rise will have a pause or pullback that lasts more than a few days. A pause in late November and early December and a pullback in early 2004 briefly “opened up” the market rally, creating a number of new buying opportunities.

So, keep working on your watchlists and stay engaged until you’re ready to go.

Read The Big Picture every day to stay on top of market trend 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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