Dow Jones Futures Rise After Market Rally Hits Resistance; Tesla, Nvidia Lead New Buys

Dow Jones futures rose modestly early Wednesday, along with S&P 500 futures and Nasdaq futures, with Treasury yields continuing to slide.

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The stock market rally continued to gain ground with Treasury yields tumbling, but the Nasdaq hit resistance at a key level. Tesla (TSLA), Super Micro Computer (SMCI), Uber Technologies (UBER), Novo Nordisk (NVO), NetEase (NTES) Nvidia (NVDA) were among the stocks flashing new buy signals.

NVO stock also rose early Wednesday on upbeat drug news.

Investors should continue to add exposure gradually and look for possible entries, if the market continues to make progress.

On Wednesday, investors will get the September producer price index before the open and the Fed minutes from the late September policy meeting. On Thursday, the CPI inflation report is due.

Nvidia stock is on IBD Leaderboard, with Tesla and Uber stock joining Leaderboard on Tuesday. Uber and NVO stock are on SwingTrader. Nvidia, Super Micro and Tesla stock are on the IBD 50. SMCI stock, Tesla and Nvidia are on the IBD Big Cap 20. Uber Technologies was Tuesday’s IBD Stock Of The Day.

The video embedded in the article discussed Tuesday’s market action and analyzed Uber Technologies, Novo Nordisk and SMCI stock.

Exxon Mobil (XOM) will buy Permian Shale giant Pioneer Natural Resources (PXD) for $59.5 billion, or $64.5 billion including net debt. XOM stock fell modestly. PXD stock rose slightly, after solid gains over the past few days on buyout buzz.

Dow Jones Futures Today

Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures climbed 0.3%. Nasdaq 100 futures were up 0.5%.

The 10-year Treasury bond yield fell sharply to 4.57%.

Crude oil futures edged lower.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Stock Market Rally

The stock market rally continues to advance since Friday’s follow-through day.

The Dow Jones Industrial Average rose 0.4% in Tuesday’s stock market trading, moving back above the 200-day line intraday but fading by the close. The S&P 500 index climbed 0.5%, now clearing the 21-day moving average and getting above the August lows. The Nasdaq composite advanced 0.6%, but halved intraday gains after hitting the 50-day line. The Nasdaq 100 did close above the 50-day.

The small-cap Russell 2000 popped 1.1%, but still has some distance to its 200-day and 50-day lines. Market breadth was strong, with winners beating losers by more than 2-to-1 on the Nasdaq and nearly 3-to-1 on the NYSE. That continues a short-term trend after months of poor performance.

U.S. crude oil prices dipped 0.5% to $85.97 a barrel.

The 10-year Treasury yield plunged 13 basis points to 4.65%. Bond markets were closed Monday for Columbus Day, but various ETFs like TLT signaled that Treasury yields were coming down that day. The odds of another Fed rate hike this year have come down substantially as policymakers signal that the surge in Treasury yields reduces the need for central bank moves.

The U.S. dollar fell for a fifth straight session.

In addition to the upcoming inflation reports and the start of earnings season, the Israel-Hamas conflict is still an X factor for the stock market, despite the gains this week.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1%. The iShares Expanded Tech-Software Sector ETF (IGV) added 0.45%. The VanEck Vectors Semiconductor ETF (SMH) climbed 1.2%. Nvidia stock is the top holding in SMH.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 2.1% and ARK Genomics ETF (ARKG) 2.5%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) rose 1.3%. U.S. Global Jets ETF (JETS) ascended 1.7%. SPDR S&P Homebuilders ETF (XHB) stepped up 1.15%. The Energy Select SPDR ETF (XLE) edged up 0.1% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.5%.

The Industrial Select Sector SPDR Fund (XLI) muscled 0.6% higher. The Financial Select SPDR ETF (XLF) advanced 0.7%.

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Stocks In Buy Areas

Tesla stock rose 1.5% to 263.62 on Tuesday, though it came off intraday highs of 268.94. The EV giant has been actionable from clearing the 50-day line last week. On Tuesday, TSLA stock offered another early entry as it cleared last Thursday’s high of 263.60. The EV giant has a 278.98 official buy point from a cup-with-handle base.

Tesla stock has shrugged off a steady stream of bad news in October. Q3 earnings are due Oct. 18, with analysts in the process of cutting estimates following the recent deliveries miss.

Nvidia stock gained 1.2% to 457.98, peaking above Friday’s high of 457.89 just above the 50-day line. That offered an early entry. NVDA stock has a 502.66 consolidation buy point.

Uber stock rose 2.6% to 46.63, popping from the 50-day line and clearing a short trendline, offering an early entry within a flat base. The ride-hailing giant’s official buy point is 49.49.

Novo Nordisk stock advanced 1% to 93.01, moving off the 50-day and 21-day line. That offered an entry, with NVO stock working on a new consolidation.

NVO stock rose more than 3% Wednesday morning after the Danish drug giant said it ended early a phase 3 trial for a kidney failure study of weight-loss drug Ozempic, saying the efficacy was so high. The news also gave a lift to Eli Lilly (LLY), which has a similar weight-loss drug. Kidney dialysis providers sold off.

Super Micro stock leapt 7% to 310.31, clearing resistance around the 287-294 area, offering an early entry. Shares seem somewhat extended from the 50-day. SMCI stock has a 357 consolidation buy point.

NetEase stock gained 2.25% to 106.42, a fifth straight advance and the third in a row in heavy volume. The Chinese mobile gaming giant reclaimed the 50-day line Monday. On Tuesday, NTES stock decisively cleared a downward-sloping trendline, offering an early entry. Shares are working on a 110.82 flat-base buy point, according to MarketSmith analysis.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market rally is acting well. Investors should have been making some buys in the past few days. But this uptrend is a good example of why gradually adding exposure makes sense. The major indexes have a series of possible resistance levels. The Nasdaq hit resistance at the 50-day line midday Tuesday, though the indexes closed with solid gains.

Investors may want to wait for the Nasdaq to clear the 50-day line before adding further exposure. But if and when the market clears various levels, it wouldn’t take long to have significant exposure.

A number of stocks flashed buy signals Tuesday, with a large number of stocks moving into position. So investors should be updating their watchlists and looking closely at possible targets.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.

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