Futures Rise, Carvana Spikes After Stocks Erase Big Fed Gains (2024)

Dow Jones futures rose early Thursday, along with S&P 500 futures and Nasdaq futures in day two reaction to Wednesday's Federal Reserve meeting. Carvana (CVNA) and Qualcomm (QCOM) led earnings reports Wednesday night.


The stock market rally attempt had a wild afternoon. The major indexes rose sharply after the Fed agreed to slow the pace of balance sheet reductions while Fed chief Jerome Powell didn't take a hawkish tone. But in the final hour they slashed gains, closing mixed.

AI stocks had a tough day after Advanced Micro Devices (AMD) and Super Micro Computer (SMCI) sold off after earnings. Nvidia (NVDA) pared sharp losses somewhat, but faded again into the close.

After the close,Qualcomm, DoorDash (DASH), Sprouts Farmers Market (SFM) and Carvana reported.

Novo Nordisk (NVO) headlined earnings early Thursday while Apple (AAPL) reports after Thursday's close.

Nvidia stock and Novo Nordisk are on IBD Leaderboard. Novo Nordisk stock is on the IBD 50. Nvidia and Super Micro stock are on the IBD Big Cap 20.

Fed Meeting

The Federal Reserve left rates steady, with the Fed meeting statement noting "a lack of further progress" in recent months toward the 2% inflation target.

Starting in June, the Fed will reduce the runoff from its balance sheet to $60 billion a month from $95 billion. This slowdown in quantitative tightening is a de facto easing.

Fed chief Powell said it will likely take "longer than previously expected" for inflation to cool. But, allaying fears of a more-hawkish tone, Powell says he still expects inflation to cool before year-end, though his confidence is lower than earlier this year.

The odds of a Fed rate cut by the September meeting are now at 53.8% vs. 45.9% on Tuesday and 69.8% a week earlier. Markets only expect one rate cut by year-end, with a slim chance of no move.

Early Wednesday, the Labor Department reported job openings fell in March to their lowest in three years. Meanwhile, the ISM manufacturing index unexpectedly fell just below the break-even 50 level. But the ISM prices paid gauge rose more than expected.

On Friday, the Labor Department will release the April jobs report.

Dow Jones Futures Today

Dow Jones futures rose 0.5% vs. fair value. S&P 500 climbed 0.7% and Nasdaq 100 futures advanced 0.9%.

The 10-year Treasury rose slightly to 4.61%.

Crude oil futures edged higher.

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 didn't do a whole lot until the 2 p.m. ET Fed announcement. But the major indexes, after initial big gains on Fed chief Powell's news conference, came well off highs to close mixed, slightly worse than before the Fed news.

The Dow Jones Industrial Average rose 0.2% in Wednesday's stock market trading. The S&P 500 index and Nasdaq composite fell 0.3%. The small-cap Russell 2000 advanced 0.25%.

At session highs, the stock market seemed on track for a by-the-book follow-through day to confirm its rally attempt.

But the major indexes never topped their 50-day moving averages and all closed below their 21-day lines.

The stock market could have a day two reaction to the Fed meeting, with Friday's jobs report putting Powell comments in a new light.

Super Micro stock plunged 14%, while AMD lost nearly 9%, after the AI plays gave lackluster guidance. Nvidia, the most important stock and company of the AI boom, rebounded from a 6% intraday loss but still sank 3.9%, below its 50-day line.

TransMedics (TMDX), Powell Industries (POWL), Garmin (GRMN) and Pinterest (PINS) all skyrocketed on earnings.

U.S. crude oil prices tumbled 3.6% to $79 a barrel, off 5.8% so far this week, as domestic stockpiles swelled. Gasoline futures sank 4.2% Wednesday

The 10-year Treasury yield fell 9 basis points to 4.59%.


Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.2%. The VanEck Vectors Semiconductor ETF (SMH) slumped 2.9%. Nvidia stock is the No. 1 stock in SMH, with AMD also a key holding.

SPDR S&P Metals & Mining ETF (XME) closed just above break-even. The SPDR S&P Homebuilders ETF (XHB) fell 0.4%. The Energy Select SPDR ETF (XLE) retreated 1.6% while the Health Care Select Sector SPDR Fund (XLV) climbed 0.2%.

The Industrial Select Sector SPDR Fund (XLI) dipped 0.25%. The Financial Select SPDR ETF (XLF) closed flat.

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Qualcomm earnings and guidance were strong, sending QCOM stock solidly higher overnight. The wireless chip giant dipped 1.1% to 164.03 on Wednesday, slightly below the 50-day. Qualcomm stock has a 175.99 double-bottom buy point.

DoorDash reported a wider-than-expected loss. DASH stock plunged in extended action. The delivery app giant slipped 1.45% to 127.38 on Wednesday. DASH stock had been close to forging a flat base.

Sprouts earnings topped. SFM stock rose solidly overnight back into a buy zone. The natural foods grocer fell 2.6% to 64.29 on Wednesday, below a 65.53 flat-base buy point.

Carvana earnings easily beat views while guidance was strong. CVNA stock skyrocketed 35% in premarket action. The online used-car seller jumped 5% to 87.09 on Wednesday, holding above the 50-day. Carvana stock has been consolidating since late March, but is set to blast above that.

Novo Nordisk earnings beat views early Thursday on booming sales of its weight-loss drugs, with the Danish pharma giant also raising guidance. Shares were little changed before the open. NVO stock edged up 0.7% Wednesday to 129.21, just above the 50-day. Novo has a 138.28 flat-base buy point, but Tuesday's high of 130.46 could serve as an early entry. Rival Eli Lilly (LLY) popped Tuesday on strong earnings and guidance.

Apple earnings are due Thursday night. Expectations are low, while the stock has been trending lower since mid-December. The Dow tech giant rose slightly before the open. AAPL stock edged down 0.6% to 169.30 on Wednesday, falling back from 50-day line resistance. It's still a gigantic company that can move markets. Investors would like to hear hints about AI products but that may have to wait for a later date.

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What To Do Now

The stock market rally had a dispiriting day. In the final hour, the market went from a likely follow-through day to a mixed-to-negative session.

It's a reminder that investors should be waiting for real signs of strength before getting aggressive.

A number of leading stocks are just above or below their 50-day lines, often within bases. It wouldn't take a big move for many of these names to look actionable. But it wouldn't take much for many to look seriously damaged.

So have your watchlists up to date and your exit plan ready.

ReadThe Big Pictureevery day to stay in sync with the market direction and leading stocks and sectors.

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


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Futures Rise On Record Apple Buyback; Jobs Report On Tap

Futures Rise, Carvana Spikes After Stocks Erase Big Fed Gains (2024)


What does it mean when the stock market goes up points? ›

For stocks, one point equals one dollar. So when you hear that a stock has lost or gained X number of points, it is the same as saying the stock has lost or gained X number of dollars. Using points to describe share price gains, or declines, is generally done to describe short-term results, such as for the day or week.

Can stocks continue to rise? ›

Expectations of an earnings rebound in 2024 suggest earnings could continue to drive the market higher. While some valuations are stretched, there is still room for the market to grow if earnings estimates are met.

How many points is considered a stock market crash? ›

There is no official threshold for what qualifies as a stock market crash. But a common standard is the rapid double-digit percentage decline over a period of several days in a stock index, such as the Standard & Poor's (S&P) 500 Index or Dow Jones Industrial Average (DJIA).

What does it mean when the Dow drops 1,000 points? ›

When the Dow gains or loses a point, it reflects changes in the prices of its component stocks. The index is price-weighted, meaning it moves in line with the price changes of its components on a point basis, adjusted by a divisor.

At what age should you get out of the stock market? ›

There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.

Will 2024 be a good year for the stock market? ›

Analysts are projecting S&P 500 earnings growth will accelerate to 9.7% in the second quarter and S&P 500 companies will report an impressive 10.8% earnings growth for the full calendar year in 2024.

Will stocks continue to rise in 2024? ›

While there could be a growth slowdown in the first half of 2024, experts believe growth should resume in the second half of the year. Americans faced many financial challenges this year, from persistent inflation to increasingly expensive debt.

What does it mean when a stock goes up 2 points? ›

A two-point increase in the price of a common stock share is a $2 increase, such as a $100 stock rising to $102.

What do the S&P 500 points mean? ›

The price of the S&P 500 index that you see quoted – for example, 4,301.56 – is measured in points, not dollars. That's the weighted average value of all the index's components. As the component stocks move up or down, the index rises or falls according to the calculation.

What are points on a stock chart? ›

Point and figure charts are a way to visualize price movements and trends in an asset without regard to the time that passes. P&F charts use columns consisting of stacked Xs or Os, each representing a set amount of price movement. The Xs illustrate rising prices and the Os represent falling prices.

What do the turning points mean in terms of the price of the stock? ›

A turning point is a point in the time when a series which had been increasing (or decreasing) reverses and decreases (or increases) for a time (see, e.g. [12]).


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