Dow Jones futures saw a slight decline overnight, along with S&P 500 futures and Nasdaq futures.
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Nasdaq Reverses Higher After Sharp Drop; ONON, APP, DASH In Focus
The stock market rally experienced a significant bullish turnaround on Wednesday. The major indexes rebounded from early losses, with the Nasdaq and S&P 500 recovering key levels.
Nvidia (NVDA) showed a strong rally for the third consecutive session, with heavy volume surges. Tesla (TSLA) managed to gain slightly after recovering from initial morning losses.
Furthermore, AppLovin (APP), ServiceNow (NOW), Spotify (SPOT), Eli Lilly (LLY), Freshpet (FRPT), and On Holding (ONON) all displayed buy signals on Wednesday.
Nvidia and Freshpet stocks are part of IBD Leaderboard. Eli Lilly and On Holding stocks are part of SwingTrader. Nvidia, On Holding, Eli Lilly, and ServiceNow stocks are part of the IBD 50. Eli Lilly stock is also part of the IBD Big Cap 20. On Holding was designated as Wednesday’s IBD Stock Of The Day.
The embedded video in the article analyzes the bullish action on Wednesday and reviews AppLovin stock, On Holding, and Doordash (DASH).
Dow Jones Futures Today
Dow Jones futures fell 0.1% compared to fair value. S&P 500 futures and Nasdaq 100 futures also declined by 0.1%.
At 8:30 a.m. ET on Thursday, the Labor Department is set to release the August producer price index and weekly jobless claims.
It’s important to note that overnight movements in Dow futures and other indices may not directly translate to actual trading in the upcoming stock market session.
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Stock Market Rally
The stock market rally started with a sell-off at the opening bell, following Tuesday’s presidential debate, Wednesday’s CPI inflation report, and ongoing concerns regarding lenders and consumer spending. However, the major indexes, all initially down over 1%, rebounded from mid-morning lows. Nvidia played a significant role in driving the Nasdaq higher.
After tumbling below its 50-day line intraday, the Dow Jones Industrial Average surged by 0.3% in Wednesday’s stock market trading. The S&P 500 index saw a 1.1% increase, reclaiming the 50-day and 21-day lines after facing potential rejection near those levels. The Nasdaq composite jumped by 2.2%, surpassing the 21-day line after a 1.4% intraday fall. The small-cap Russell 2000 rose by 0.3% after nearing its 200-day line intraday.
The Invesco S&P 500 Equal Weight ETF (RSP) experienced a slight increase, holding the 21-day line after briefly dipping below its 50-day line in morning trade.
The fluctuating market conditions on Wednesday underscored the impact of the overall market on individual stocks. Some leading stocks initially dropped significantly on Wednesday morning but managed to rebound later in the day.
Although the Nasdaq is up by 4.2% so far this week, it is currently within an inside week. While still below its 50-day line, the tech-heavy composite is closing in on closing the gap.
U.S. crude oil prices increased by 2.37% to reach $67.31 per barrel
The 10-year Treasury yield rose by one basis point to 3.65% after hitting a fresh 52-week low intraday of 3.61%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gained 1.1%. ServiceNow stock is a significant holding in IGV, while AppLovin is also part of the ETF. The VanEck Vectors Semiconductor ETF (SMH) saw a notable 5.2% increase. Nvidia stock holds the top position in SMH.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) rallied by 2.2%, and the ARK Genomics ETF (ARKG) by 1.8%. Tesla stock is a major holding in Ark Invest’s ETFs. Cathie Wood has also increased their position in NVDA stock in recent months.
The SPDR S&P Metals & Mining ETF (XME) saw a 1.95% leap. The SPDR S&P Homebuilders ETF (XHB) edged up by 0.2%. Conversely, the Energy Select SPDR ETF (XLE) dropped by 0.9%, and the Health Care Select Sector SPDR Fund (XLV) fell by 0.3% amid significant post-debate movements for many medical stocks. Eli Lilly stock is a key holding in XLV.
The Industrial Select Sector SPDR Fund (XLI) climbed by 0.2%, while the Financial Select SPDR ETF (XLF) retreated by 0.5%.
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Stocks Near Buy Points
AppLovin surged by 13.15% to 97.57, moving from the 21-day line back above a 91.91 buy point. It is slightly extended from the official entry but still within range of a high-handle alternate buy point of 93.70.
The relative strength line, which compares a stock’s performance against the S&P 500 index, is at a 52-week high. Early Tuesday, Bank of America raised its price target for APP stock to 120.
ServiceNow stock climbed by 1.75% to 875.17, reversing higher after initially dropping below the flat-base buy point of 850.33 intraday.
Spotify stock rose by 2.9% to 336.60, bouncing back from the 50-day line to surpass a previous flat-base buy point of 331.08 and clear the 21-day line. Following this week, SPOT stock will establish a new base with a 359.38 entry.
Eli Lilly stock rose by 2% to 919.54, rebounding from the 50-day line and closing just above the 21-day line. This presents an early entry opportunity. Investors could consider the high handle to a V-shaped…
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