After some time, the S&P 500 and Nasdaq futures, along with the Dow Jones, experienced minimal changes. Nvidia (NVDA), a prominent figure in artificial intelligence (AI), faced a late setback despite delivering another strong performance in their recent earnings report.
The financial performance of Nvidia will have a significant impact on the business landscape and artificial intelligence sector. Key players in the AI domain include Palantir Technologies (PLTR), Super Micro Computer (SMCI), Advanced Micro Devices (AMD), tech giant Alphabet (GOOGL), and Meta Platforms.
While major indices saw a slight retreat in Tuesday’s trading session in anticipation of Nvidia’s earnings, small-cap stocks bore the brunt of more substantial losses. Despite the extended valuations of many leading companies, the stock market continues to exhibit resilience.
Earnings reports were also released on Tuesday by Urban Outfitters (URBN), HP Inc. (HPQ), Autodesk (ADSK), and dLocal (DLO). Following their earnings, ADSK and URBN stocks initially surged before tapering off, while DLO shares plummeted due to lower-than-expected Q3 earnings. HP shares also declined across a range of outcomes.
Notable entities on the IBD Leaderboard include Microsoft, Nvidia, and Meta Platforms, while SwingTrader features Meta Platforms. The IBD Long-Term Leaders list includes Microsoft, and Microsoft, Super Micro, and Nvidia are all listed on the IBD 50. Additionally, the IBD Big Cap 20 comprises shares of Microsoft, Meta Platforms, and SMCI.
Today’s Dow Jones Futures
Dow Jones futures were relatively stable compared to fair value, while S&P 500 and Nasdaq 100 futures experienced marginal declines of 0.1% and 1%, respectively. Nvidia’s stock holds significant weight in both the S&P 500 and Nasdaq 100 indices, alongside other notable AI companies.
It is important to note that trading activity in Dow futures and other markets immediately may not always translate into actual trading during the subsequent regular stock market session.
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Stock Market Rally
Tuesday’s stock market rally saw a slight pullback, with investors securing some gains ahead of Nvidia’s earnings release.
During Tuesday’s trading session, the Dow Jones Industrial Average and the S&P 500 index both dipped by 0.2%, while the Nasdaq composite lost 0.6% of its value.
The Nasdaq 100 index rebounded from its 52-week low on Monday.
The small-cap Russell 2000 index declined by 1.3% and remained below the 50-day moving average.
U.S. crude oil prices experienced a slight decrease of 6 cents, settling at $77.77 per barrel.
The 10-year Treasury yield remained unchanged at 1.42%.
Minutes from the Federal Reserve meeting on October 31 and November 1 indicated policymakers’ concerns about inflation and their stance on refraining from rate cuts. These revelations had minimal impact on Treasury yields or stock prices.
The market rally seems robust, with the S&P 500 and Nasdaq exhibiting strength since their recent peak in early October. While many stocks are trading at elevated levels, leading stocks are displaying sound performance.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) experienced a slight decline on Tuesday. Microsoft holds significant weight in the IGV ETF. The VanEck Vectors Semiconductor ETF (SMH) declined by 1.5%, with Nvidia being a prominent component. AMD is another well-known holding in the SMH ETF.
The ARK Innovation ETF (ARKK) dropped by 2.25%, signaling a decline in more speculative stocks, while the Ark Genomics ETF witnessed a 3.7% slide.
The Global X U.S. Infrastructure Development ETF (PAVE) decreased by 0.3%, while the SPDR S&P Metals & Mining ETF (XME) rose by 0.25%. The SPDR S&P Homebuilders ETF (XHB) declined by 0.9%, and the Health Care Select Sector SPDR Fund (XLV) increased by 0.6%, while the Energy Select SPDR ETF (XLE) saw a 0.2% decline.
Both the Financial Select SPDR ETF (XLF) and the Industrial Select Sector SPDR Fund (XLI) experienced a 0.1% decline.
Nvidia’s Performance
Nvidia reported a remarkable 593% year-over-year increase in earnings, soaring to $18.12 billion, surpassing fiscal Q3 expectations. The company’s AI chip segment also provided an optimistic guidance.
Despite this stellar performance, Nvidia’s stock faced significant volatility during after-hours trading. On Tuesday, the shares dipped by 0.9% to \(499.44, remaining within the buy zone of the double-bottom base at \)476.09.
AI Stocks
Microsoft’s stock witnessed an uptick in after-hours trading, closing at \(373.07 on Tuesday, within the buy range of the cup-base at \)366.78. The stock’s moving averages suggest potential upward momentum in the near future.
While facing ongoing controversies, AMD’s shares declined by 1.9% to \(119.18 on Tuesday. The stock currently presents a buying opportunity within the cup-with-handle pattern at \)122.41.
Google’s stock experienced a slight decline in later trading, closing at \(136.97 on Tuesday. Investors may consider the recent high of \)137.22 as an early entry point in a flat base, with the official buy point set at $141.22.
Meta Platforms’ stock remained relatively stable overnight, trading at $337.01 on Tuesday within the buy range of a consolidation phase that began in late July.
Palantir’s stock dropped by 7.2% to \(19.80 on Tuesday, showing signs of a reversal from an overbought condition. MarketSmith’s analysis indicates that Palantir’s shares retreated below the \)20.24 cup buy point, despite securing a deal with the UK’s National Health Service.
Super Micro’s stock saw a decline during after-hours trading, dropping by 4.8% to \(289.85 on Tuesday, following a 5.5% increase on Monday. The stock may offer an early entry opportunity, with the buy point set at \)317.50 from an imperfect double-bottom base.
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What’s Next
Despite a minor setback in the recent stock market rally, the market has displayed resilience and strength in November.
Investors can capitalize on buying opportunities arising from recent market upswings. While some leading stocks are currently overextended, a market consolidation phase could provide new entry points for investors.
Given the current strength in the market trend, investors may consider holding onto potential winners for longer periods and exploring growth plays. However, it is essential to adhere to established trading guidelines.
Stay vigilant for new market developments and update your watchlists regularly.
For daily insights on market trends, top companies, and industry analysis, refer to The Big Picture.
