Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. advanced micro devices (amd) headlined notable gains after the close.
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The stock market rally receded on Tuesday, with the Dow Jones leading the declines amid House Speaker Nancy Pelosi’s trip to Taiwan and hawkish comments from the Fed.
amd Stock, Solar Edge Technologies (SEDG), lithium set to live (LTHM), Western Petroleum (OXY), Pioneer Natural Resources (PXD), healthcare cost management company evolutionary health (EHV) Y PayPal (PPPL) reported Tuesday night.
Early Wednesday, China’s e-commerce company alibaba (slime) reports quarterly earnings. Chinese electric vehicle and battery giant BYD (BYDDF) will probably report July sales, following delivery data of child (LITTLE BOY), Xpeng (XPEV) Y li car (LI) on Monday.
(The video embedded in the article looks at the market action and discusses Onsemi (IN), KBR (KBR) Y Harmony Biosciences (HRMY).)
Dow Jones Futures Today
Dow Jones futures were up 0.25% against fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures fell 0.1%.
Remember that the overnight action in dow futures and elsewhere does not necessarily translate to actual trading in the next regular stock Exchange session.
key gains
AMD shares fell solidly after AMD profits exceeded views but the income guide fell short. The shares rose 2.6% to 99.29 in the regular session on Tuesday, continuing a strong run from a 52-week low on July 5. AMD shares are still below their 200-day line.
SEDG shares fell after earnings barely topped and revenue was slightly lost. Shares of SolarEdge rose 1.9% on Tuesday to 365.41, picking up in recent days on other solar gains and a climate bill and tax spending that promotes green energy.
LTHM shares rose after live earnings top views and revenue guidance was solid. Shares of Livent rose 6.8% on Tuesday to 25.93, recovering from their 50- and 200-day moving averages. Rival shelter him (SUNRISE) reports Wednesday night. ALB shares rose later. Shares rose 1.6% on Tuesday, moving toward a buying point.
OXY shares fell slightly despite Occidental’s earnings comfortably beating quarterly targets. Warren Buffett’s favorite energy stock fell 0.3% on Tuesday, just above its 50-day line on a base rate.
PXD shares were flat after earnings peaked and revenue was lost, part of a great week for shale results. Pioneer Natural Resources also announced a dividend increase. PXD shares were down 0.1% on Tuesday, down from their 50-day.
EVH shares soared after Evolutionary Gains it outperformed sentiment and the health care management company raised guidance for the full year. Evolent shares rose 1.2% on Tuesday, just outside the buying range.
PYPL shares rose after paypal earnings The rhythm and the guide were strong. The digital payments leader also confirmed that activist investor Elliott Management has taken a $2 billion stake. Shares rose 1.2% on Tuesday to 89.63, continuing to bounce from late June lows but well below the 200-day line.
Tesla vs. BYD: Which giant EV is the best buy?
BABA shares rose 2.5% to 92.62 on Tuesday before the results, but remain below their 50- and 200-day lines.
BYD shares fell 1.5% to 36.75 on Tuesday, slightly below its 50-day line as it works through further consolidation.
BYD is likely to record another month of record sales with several new growth drivers poised to kick in. That includes the BYD Seal, a Tesla (TSLA) Rival to the Model 3, which begins deliveries this month. China’s electric vehicle giant is also expanding into a host of new markets in the coming weeks and months.
Shares of Tesla, meanwhile, rose 1.1% to 901.76, extending a winning streak to five sessions. Stocks hit resistance at the 200-day line once again.
Join IBD Experts as They Discuss Actionable Actions in the Stock Market Rally on IBD Live
stock rally
The stock market rally closed lower after trading higher and lower during the session.
Speaker Pelosi visited Taiwan on Tuesday, with plans to visit top officials. Chinese officials had threatened to take action if she went ahead with the visit and carried out or announced several military shows of force. After Pelosi’s plane landed, major indexes rallied but then faded to mixed.
The Dow Jones industrial average fell 1.2% on Tuesday stock trading, with blue chips not far off session lows. The S&P 500 index sank 0.7%. The Nasdaq Composite, which was up for much of the day, closed down about 0.2%. The small-cap Russell 2000 fell 0.1%
US crude prices rose 0.6% to $94.42 a barrel. Natural gas prices in the United States fell 7%.
The 10-year Treasury yield jumped 13 basis points to 2.74%, recovering from an intraday low of just under 2.58%. Yields rebounded as Pelosi-Taiwan fears subsided. San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans became the latest moderate politicians to stress that the central bank is nowhere near finished with the fight against inflation.
ETFs
Between best ETFsthe Innovator IBD 50 ETF (FFTY) rose 1%, while the Innovator IBD Breakout Opportunities ETF (COMBAT) fell 1%. The iShares Extended Technology Software Sector ETF (VAT) rose 0.2%. The VanEck Vector Semiconductor ETF (SMH) submerged 0.2%.
The SPDR S&P Metals & Mining ETF (XME) fell 1.3% and the Global X US Infrastructure Development ETF (TO PAVE) lost 1.5%. US Global Jets (JETS) decreased by 1%. SPDR S&P Home Builders (XHB) plunged 3.1% as higher Treasury yields weighed on the sector. The Energy Select SPDR ETF (XLE) fell 0.2% and the Financial Select SPDR ETF (XLF) yielded 1.1%. The SPDR Fund of the Select Sector of Health Care (XLV) fell 0.4%.
Mirroring stocks with more speculative histories, ARK Innovation ETF (ARKK) rose 2.7% and ARK Genomics ETF (ARKG) added 2.3%. TSLA shares remain one of the top holdings in Ark Invest ETFs. Ark also owns a small stake in BYD stock.
Five best Chinese stocks to watch now
Market recovery analysis
The stock market rally opened lower but then rallied, only to fade again.
Given the geopolitical headwinds and aggressive comments from the Fed, a modest market pullback was not too worrisome, especially given the market rally in recent weeks.
The Nasdaq held support near its early June highs.
The Dow Jones, S&P 500, and Russell 2000 are missing their early June highs. On top of all that, the major indices face several more resistance levels, notably the 200-day line.
Market leadership is improving.
Solar power, oil and gas, food, defense, heavy construction, and a variety of medical stocks are doing well, though some are getting installed while others are expanding. Even some chip names are showing strength or set-up, though AMD stock and the group as a whole are still a long way from recovery. Some steel and metal sets and possibly even fertilizer stocks are beginning to recover.
But after rallying significantly in recent weeks, often on light volume, many of these stocks could hit pause. Therefore, sideways market action for a few days or weeks could be constructive.
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What to do now
Investors should continue to invest modestly. It is not yet clear if this is a sustainable uptrend or another bear market rally. Remember: the more aggressive you are in entering the market, the faster you will need to exit if conditions deteriorate.
Whether you have a 10% or 50% investment, look for early entries and try to start positions close to buy points. That can make it easier to gain a cushion, as many stocks pull back after brief runs.
It is definitely a time to engage closely with the market.
Read The panorama every day to stay in sync with market direction and major stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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