Dow Jones futures showed minimal movement after hours, mirroring the stability in S&P 500 futures and Nasdaq futures.
The recent stock market surge on Wednesday was fueled by a favorable PCE inflation report. Both the S&P 500 and Nasdaq achieved record closing highs, while the small-cap Russell 2000 briefly reached a 52-week peak, extending its strong weekly performance.
In the tech sector, Advanced Micro Devices (AMD), a competitor of Nvidia (NVDA), emerged from a brief consolidation phase. Additionally, companies like Airbnb (ABNB) and Lennar (LEN) reclaimed their buy points.
Post market close on Thursday, earnings reports were released by Dell Technologies (DELL), NetApp (NTAP), Elastic (ESTC), Zscaler (ZS), Veeva Systems (VEEV), Autodesk (ADSK), and SoundHound AI (SOUN).
Noteworthy developments included Dell and NetApp’s impressive earnings results, with NetApp poised for a breakout. Conversely, ESTC and SoundHound experienced declines, while Zscaler and Veeva saw retracements.
A significant update came from New York Community Bancorp (NYCB), which issued a warning regarding “internal controls” concerns. This led to Chairman Alessandro DiNello assuming the role of CEO immediately, replacing Thomas Cangemi. Following the announcement, NYCB stock plummeted after hours.
Nvidia and Zscaler stocks are highlighted on IBD Leaderboard and the IBD 50, with Nvidia also featured on the IBD Big Cap 20. AMD was recognized as the IBD Stock Of The Day on Wednesday.
Current Dow Jones Futures Status
Dow Jones futures exhibited a slight increase compared to fair value, while S&P 500 futures and Nasdaq 100 futures remained relatively stable.
It’s important to note that overnight movements in Dow futures and other indices may not necessarily translate directly to the subsequent regular stock market session.
Earnings Highlights
Dell reported strong earnings, attributing its performance to robust demand for AI servers. Consequently, the company’s stock surged in after-hours trading. Dell stock currently stands extended from its 10-week line rebound last week.
Zscaler surpassed earnings expectations and provided an optimistic outlook. Despite this, ZS stock faced a sharp decline in extended trading, indicating a potential test of the 50-day/10-week line. In the regular Thursday session, Zscaler rose by 1.9%.
Elastic exceeded earnings estimates, although its guidance was in line with expectations. However, ESTC stock experienced a significant drop overnight, signaling a potential move to or below the 50-day line. On Thursday, Elastic shares rose by 3.2%.
Veeva’s earnings outperformed predictions, but VEEV stock saw a modest decline in after-hours trading. The life sciences software company recorded a slight increase of 14 cents on Thursday, hovering around the upper range of a five-month consolidation.
Autodesk surpassed Q4 projections but provided slightly lower guidance for Q1 and fiscal 2025 EPS. Nevertheless, ADSK stock surged in after-hours trading. On Thursday, shares rose by 1.1%, finding support at the 21-day line.
NetApp’s earnings exceeded expectations, leading to a surge in NTAP stock during late trading, indicating a potential breakout from a flat base or base-on-base formation.
SoundHound AI reported a wider-than-expected loss in Q4, coupled with revenue falling short of projections. SOUN stock experienced a sharp decline in late trading, despite its significant 347% surge in February, largely following Nvidia’s disclosure of a stake in SOUN.
Stock Market Performance
The stock market rally commenced positively on Thursday, with the Dow Jones Industrial Average edging up by 0.1%. The S&P 500 index climbed by 0.5%, reaching an all-time closing high, while the Nasdaq composite surged by 0.8%, achieving its first record close since 2021 and surpassing 16,000. The small-cap Russell 2000 advanced by 0.7%, momentarily surpassing its late December peak and establishing a new 22-month high.
A brief pause in the major indexes would be beneficial, allowing them to catch up and enabling more stocks to form bases, handles, or bullish pullbacks. The Nasdaq’s recent sideways movement has contributed to this process, although a breakout from the current range by small caps would be encouraging.
While AI and tech stocks continue to lead the rally, with AMD notably performing well on Thursday, a diverse range of stocks and sectors are participating in the market upswing.
In commodity markets, U.S. crude oil prices experienced a slight decline to $78.26 per barrel, marking a 3.2% increase for the month.
The 10-year Treasury yield dropped by 2 basis points to 4.25%, following a notable 29 basis point surge in February.
ETF Performance
Within the realm of growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose by 0.8%, featuring Elastic stock, Zscaler, and Autodesk among its members. The VanEck Vectors Semiconductor ETF (SMH) surged by 2.2%, with AMD holding a prominent position.
In the domain of speculative story stocks, ARK Innovation ETF (ARKK) recorded a modest increase of 0.2%, while ARK Genomics ETF (ARKG) declined by 2.4%.
Other ETFs such as SPDR S&P Metals & Mining ETF (XME), Global X U.S. Infrastructure Development ETF (PAVE), U.S. Global Jets ETF (JETS), SPDR S&P Homebuilders ETF (XHB), Energy Select SPDR ETF (XLE), and Health Care Select Sector SPDR Fund (XLV) displayed varied movements.
The Industrial Select Sector SPDR Fund (XLI) and Financial Select SPDR ETF (XLF) also demonstrated fluctuations in their performance.
Stocks In Buy Zones
AMD stock surged by 9% to 192.50 in above-average volume, reaching a new high. The AI chip company cleared a brief consolidation phase, potentially offering a buy opportunity within the range of 184.92 to 194.17.
Nvidia stock rose by 1.9% to 791.12 on Thursday, encountering resistance at the 800 level.
Airbnb stock increased by 2.6% to 157.43, surpassing a buy point of 154.95 according to MarketSmith analysis. Lennar stock also saw a 3% rise to 158.35, moving beyond a flat-base buy point of 156.01.
Strategic Considerations
The current market rally displays positive momentum, with the Nasdaq not yet extended and small caps testing crucial resistance levels.
Investors may opt for incremental purchases while maintaining a steady exposure level. Keeping watchlists prepared is essential, as many quality stocks across various sectors are showing potential setups.
Engagement in market analysis outside of trading hours, including screening, chart analysis, and trade reviews, is pivotal for successful trading decisions.
Stay informed by reading The Big Picture daily to align with market trends, leading stocks, and sectors.
For real-time updates and more insights on the stock market, follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson.
