Dow Jones Futures Fall, But Stock Market Shows Healthy Performance; Apple is switching to AI

Dow Jones futures fell slightly Wednesday morning, as did S&P 500 futures and Nasdaq futures.

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The stock market rally shows constructive measures. Major indexes have remained near record highs in recent days, while the Russell 2000 is heading toward a two-year high, reflecting increasing breadth. Apple (AAPL) rebounded slightly after reports that the iPhone giant is finally ditching electric vehicles and moving much of its team to generative AI.

Brazilian jet manufacturer Embraer (ERJ) issued a buy signal on Tuesday Layer4 (FOUR), which operates under the name Shift4 Payments, recorded a bullish upward reversal in earnings. In the meantime, Nvidia (NVDA) Rival modern micro devices (AMD) continues to work on a base.

Urban Outfitters (URBAN), First solar (FSLR), Array technologies (ARRY) and lemonade (LMND) reported after the market closed.

Urban Outfitters stock, which had been broadened, sold off overnight due to a lack of profits. The struggling solar stocks First Solar and Array rose significantly compared to their results and recorded significant declines, respectively. Solar tracking company Array is a competitor to go public in 2023 Nextracker (NXT) that shone brightly. LMND stock, which broke out on Tuesday ahead of the earnings release, plunged early Wednesday on weak guidance.

Dow giant Salesforce.com (CRM) leads several important software reports on Wednesday evening.

Lemonade stock is at IBD 50. Embraer was the IBD stock of the day on Tuesday. The video embedded in this article discusses Tuesday's market action and analyzes shares of Embraer, AMD and Shift4.

Dow Jones futures today

Dow Jones futures fell 0.2% from fair value. S&P 500 futures fell 0.3% and Nasdaq 100 futures lost 0.4%.

The yield on 10-year government bonds fell slightly to 4.28%. Crude oil futures fell slightly.

Bitcoin continued its huge rise and was on the verge of reaching the $60,000 mark.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

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Stock market rally

The stock market rally had a mixed but generally positive impact on Tuesday.

The Dow Jones Industrial Average fell 0.25% in Tuesday trading. The S&P 500 index rose 0.2%. The Nasdaq Composite rose 0.4%.

The small-cap Russell 2000 index rose 1.4%, approaching a two-year high set late last year.

Just a few days ago, there were concerns that the Nasdaq was expanding while market breadth was weakening. Therefore, it is almost ideal for the major indices to pause for a few days while small caps and other broad metrics recover.

The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.4% to just below record highs. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.5%, hitting an all-time high.

These ETFs, along with the sector ETFs, indicate broad market leadership.

Still, purchasing options were limited. For stocks working on bases or handles, a longer market break would be helpful.

U.S. crude oil prices rose 1.7% to $78.87 a barrel.

The 10-year Treasury yield rose about two basis points to 4.31%, remaining at its 2024 peak.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gained less than 0.1%. The VanEck Vectors Semiconductor ETF (SMH) fell 0.3%, with AMD shares playing a major role.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) gained 2.9% and the ARK Genomics ETF (ARKG) gained 4.9%.

The SPDR S&P Metals & Mining ETF (XME) rose 1.1%. The US Global Jets ETF (JETS) rose 0.4%. The SPDR S&P Homebuilders ETF (XHB) gained 0.8%. The Energy Select SPDR ETF (XLE) fell 0.4% and the Health Care Select Sector SPDR Fund (XLV) fell 0.2%.

The Industrial Select Sector SPDR Fund (XLI) gained 0.15%. The Financial Select SPDR ETF (XLF) gained 0.3%.

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Stocks near buy points

Embraer shares rose 3.5% to 18.95 on heavy volume, rebounding from the 50-day line and clearing short-term highs, providing an early entry. Shares of the Brazilian aircraft maker are moving toward a 20.13 buy point from a base-to-base formation.

Shift4 shares rose 5.55% to 76.83 after falling to 68 shortly after the open, down from several months of trading. Ahead of the opening, the payments company reported EPS growth of 90% and accelerated revenue growth of 31%, but fell short of estimates. However, Shift4 gave a bullish forecast. Investors could use an old buy point of 76.40 or perhaps 79.20 as an entry point for FOUR stock.

AMD shares rose 1.1% to 178, finding support just above the 21-day moving average. The shares have been trading tensely for several weeks. After this week, AMD stock would have a flat base with a buy point of 184.92.

AMD is trying to challenge Nvidia in AI chips. NVDA shares fell 0.5% to 787.01 on Tuesday, still just below record highs. While AMD shares rose 6.15% in February, Nvidia shares rose 27.9%.

Apple is moving from electric vehicles to AI

The tech giant is abandoning Project Titan, its decade-long project to make an electric vehicle, Bloomberg reported internally to employees on Tuesday. Many of the nearly 2,000 Apple employees working on the EV project will transition to generative AI efforts. Unlike most other major tech companies, Apple hasn't ramped up its artificial intelligence efforts over the past year, but there have been rumors that that will soon change.

Apple shares rose 0.8% to 182.63, reversing small intraday losses and giving major indexes a slight boost. Still, AAPL stock has been lagging for months and remains below all major moving averages.

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What now

There aren't many stocks to buy right now, but some could see an uptick. In many cases, they require more time compared to price and volume actions. Less sizzle, more spice.

The pause in the market recovery could make this possible. In the meantime, investors don't need to do much right now. However, you want to keep an eye on emerging underlyings, pullbacks, and other buying opportunities. So work on your watch lists and stay committed.

Read The Big Picture daily to stay up-to-date on market direction and the 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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