Dow Jones futures: Stocks bounce as yields fall, but they still have to do so; Tesla races into a buy zone

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures.

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The stock market rebounded Tuesday, led by the Nasdaq, as the 10-year Treasury yield retreated from 16-year highs. Tesla (TSLA) made a bullish move on Wednesday as the electric vehicle giant continues to shrug off bad news.

But the market’s bullish attempt never saw a follow-up day. Aside from the Nasdaq, Wednesday marked only the first day of a rally attempt for the S&P 500 and Dow Jones. Stocks are clearly at the mercy of Treasury yields.

Along with Tesla, fellow Magnificent Seven shares Meta platforms (dead) and Google’s parent the alphabet (Google) Continue to behave well, and trade around buy points. ANET Stock and summary (Snaps) rose to a key level., near potential buy points.

TSLA stock joined IBD Leaderboard And SwingTrader on Wednesday. Arista Networks (network) and Meta platforms are already on the leaderboard. SNPS stock is on IBD Long-Term Leaders. Shares of META, Arista Networks, Tesla, and Synopsys are in the market Bahraini dinar 50. Arista Networks was IBD Stock of the Day on Wednesday.

Dow jones futures today

Dow Jones futures fell against fair value. S&P 500 futures lost a fraction, while Nasdaq 100 futures rose.

The yield on 10-year Treasury bonds fell to 4.71%.

Remember, an overnight move in Dow Jones 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 attempt remained alive on Wednesday, as the Nasdaq saw a strong session.

The Dow Jones Industrial Average rose 0.4% in stock market trading on Wednesday. The S&P 500 rose 0.8%, led by Tesla. The Nasdaq Composite Index jumped 1.35%.

Market breadth was modestly positive after poor readings on Wednesday.

The small-cap Russell 2000 closed essentially flat, erasing strong intraday losses.

Invesco S&P 500 Equal Weight Fund (RSP) by 0.6% after reaching its lowest levels in six months during the day.

The 10-year Treasury yield rose about 7 basis points to 4.735%, but after rising 23 basis points over the previous two days. Treasury yields fell amid weak ADP employment numbers. The Labor Department’s August jobs report is scheduled to be released Friday morning.

US crude oil prices fell by 5.6% to $84.22 per barrel, after Energy Information Administration data showed a decline in US crude inventories but an unexpected jump in gasoline supplies. Gasoline futures fell 6.9%, continuing a sharp decline since early August to the lowest level since December 2022.

The Nasdaq and S&P 500 advanced, but were just days away from a sell-off on Tuesday.

The Nasdaq, which is now six days into its attempt to rally in the stock market, could stage a follow-on day at any time. Wednesday’s price rise was strong enough to qualify as an FTD, but trading volume on the Nasdaq fell versus Tuesday.

The S&P 500 and Dow Jones, which pared recent lows earlier this week, are just beginning new higher attempts.

There are a few technology stocks holding up, along with a few other discounted stocks. But the latest leading stocks and sectors are facing difficulties. Energy stocks fell along with oil and gasoline prices.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (Trait) by 1.6%. SNPS stock is in IGV and SMH.

Reflecting more speculative stocks, the ARK Innovation ETF (Ark(Bounce 1.5% and ARK Genomics ETF)Arkj) decreased by 0.8%. Tesla stock is the #1 stock in Ark Invest’s ETFs.

SPDR S&P Metals and Mining Fund (XME) fell 0.9% and the Global X US Infrastructure Development ETF (cradle) by 1%. US Global Jets ETF (Planes) rose 2%. SPDR S&P Homebuilders ETF (XHB(Bounce 1.45% Energy Select SPDR ETF)XLE(Down by 3.3% and Healthcare Sector SPDR Fund)Forty-fifth) by 0.4%.

Selected Industrial Sector SPDR Fund (forty-first) by 0.3%.

Financial Select SPDR ETF (XLF) advanced by 0.7%.

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Tesla shares

Tesla shares flashed a strong buy signal on Wednesday. Shares jumped 5.9% to 261.16, moving above the 50-day line decisively on higher volume. A move above Wednesday’s high will provide another early entry from a downtrend break in the handle. TSLA stock has an official buy point of 278.98 from a cup-with-handle base.

Bulls shrugged off the bad news, including a big drop in third-quarter deliveries and a new lower-priced base Model Y, and pinned their hopes on the refreshed Model 3, the upcoming Cybertruck and speculative bets on self-driving, robotics and more.

Metastock

Meta stock rose 1.5% to 305.58, back above its 50-day line, where it has traded tight for several weeks. The standard buy point is 326.20, although investors can use 310.94 or 312.87 as early entries. The entry level of 310.94 could become an official buy point on the daily chart after Thursday, but investors may still prefer 312.87.

The relative strength line, the blue line in the provided charts, has reached a record high. This reflects the Meta stock’s outperformance versus the S&P 500. The RS line hitting a new high before the stock explodes is particularly bullish.

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Google shares

Google stock rose 2.1% to 135.24, rebounding from its 50-day line and reclaiming its entry level of 133.74. GOOGL stock’s RS line is the highest since early 2022, according to a MarketSmith analysis.

Arista Stock

ANET stock rose 0.6% to 186.03, up from the 21-day line and just above the 50-day line in light volume. Arista stock should have a flat base after this week with a buy point of 198.70. Investors can use Monday’s high of 189.90 as an early entry for the networking giant. The RS line for ANET stock is approaching the high.

Synopsys Stock

SNPS stock rose 2.35% to 461.32, rebounding from a 50-day high in low intraday trading volume for the leading electronics design company. Investors can use 471.15 as a buy point from a flat base going back to the end of May. The RS line has reached record levels.

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What are you doing now

A mixed market session, even with the Nasdaq seeing low intraday volume, is nothing to get excited about. The stock market remains at the mercy of the 10-year Treasury yield, which remains on a near-vertical rise.

Tesla and Google shares offer buying opportunities on Wednesday. If the market rally picks up from here, these entry points have a good chance of working. But if the market falters, these names will likely fall, even if they outperform the S&P 500.

Remember that in the event of a market correction, relative winners may still be outright losers.

However, investors should continue to look for these relative winners. Meta Stock, Arista Networks, and Synopsys could be leaders in the next uptrend.

Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.

Please follow Ed Carson on X/Twitter at @IBD_ECarson And the topics in @edcarson1971 For stock market updates and more.

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