Dow Jones Futures: Stock Market Power Trend On The Brink; Netflix Chills On Outlook

Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. Netflix (NFLX) and Intuitive Surgical (ISRG) reported better-than-expected first-quarter earnings after the close.

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The stock market rally on Thursday once again was unable to hold early gains. While technically a mixed session, the overall tone remained bearish. The Nasdaq’s power trend in force since November is on the cusp of ending.

Nvidia stock edged higher after briefly undercutting the 50-day line. But other AI stocks were mixed, with Nvidia (NVDA) chipmaker Taiwan Semiconductor (TSM) falling below its 50-day line despite strong earnings and guidance.

Meta Platforms (META), HubSpot (HUBS) and Allstate (ALL) rebounded from key support.

Tesla (TSLA) skidded to a 52-week low with analysts wary of Elon Musk’s renewed robotaxi focus.

Nvidia and Meta stock are on IBD Leaderboard. Nvidia, Netflix and HubSpot stock are on the IBD 50. Netflix, Nvidia, HubSpot and Meta Platforms are on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures were just above fair value. S&P 500 futures tilted lower. Nasdaq 100 futures fell 0.15%, with Netflix stock a drag.

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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Netflix Subscribers, Other Earnings

NFLX stock fell solidly in extended trade, signaling a move below the 50-day line. Netflix subscribers, earnings and revenue all beat first-quarter views, but the streaming giant guided lower on Q2 revenue. Netflix also said it will end giving subscriber figures, starting in 2025.

In Thursday’s regular session, Netflix stock edged down 0.4% to 611.15.

ISRG stock rose modestly in overnight action. Intuitive Surgical earnings beat amid solid da Vinci surgical procedures growth. Shares dipped 0.35% to 372.85 on Thursday, falling further below the 50-day line. Intuitive Surgical stock had a strong run from late October to late March.

Stock Market Rally

The stock market rally tried to bounce Thursday morning, but that quickly fizzled, with the S&P 500,  Nasdaq and Russell 2000 all suffering their fifth straight loss.

The Dow Jones Industrial Average rose about 0.1% in Thursday’s stock market trading. The S&P 500 index fell 0.2%, but still holding the 5,000 level. The Nasdaq composite gave up 0.5%. The small-cap Russell 2000 lost 0.2%.

The key indexes are all well below their 50-day moving averages.

The Nasdaq’s 21-day moving average will almost certainly undercut the 50-day line on Friday. So if Friday is a down day, that will officially end the power trend, providing more confirmation of the market’s character change.

U.S. crude oil prices rose four cents to $82.63 a barrel.

Copper prices jumped 2.3% to a new 52-week high.

The 10-year Treasury yield climbed 6 basis points to 4.65%, rebounding as the Philly Fed manufacturing index unexpectedly jumped to a two-year high.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 0.7%, with HUBS stock in the ETF. The VanEck Vectors Semiconductor ETF (SMH) slumped 1.75%. Nvidia and TSM stock are the top SMH holdings.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dipped 0.3% and ARK Genomics ETF (ARKG) edged down 0.1%. Tesla stock is a major holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) fell 0.4%. The U.S. Global Jets ETF (JETS) ascended 1.4%. SPDR S&P Homebuilders ETF (XHB) slipped 0.1%. The Energy Select SPDR ETF (XLE) declined 0.3% and the Health Care Select Sector SPDR Fund (XLV) closed fractionally lower.

The Industrial Select Sector SPDR Fund (XLI) retreated 0.35%. The Financial Select SPDR ETF (XLF) climbed 0.35%, with Allstate stock a component.

Time The Market With IBD’s ETF Market Strategy

Nvidia Stock

Nvidia stock rose 0.8% to 846.71 after undercutting the 50-day line intraday for the first time in 2024. Shares are still below the 21-day and 10-week lines after tumbling 3.9% on Wednesday.

NVDA stock has a 974 buy point from a flat base.

Nvidia chipmaker Taiwan Semiconductor topped earnings views early Thursday and guided higher on Q2 revenue, fueled by strong AI demand. But Taiwan Semi stock tumbled 4.9%, below its 50-day, on a lowered outlook for the broader chip industry.

HubSpot Stock

HubSpot stock rose 2.55% to 649.58, rebounding from the 10-week line and reclaiming the 21-day line in heavy volume. Shares briefly reclaimed the 660 flat-base buy point, according to MarketSurge analysis. HUBS stock broke out on April 4 on a report that Google parent Alphabet (GOOGL) was mulling a bid for the marketing software maker

Meta Stock

Meta stock gained 1.5% to 501.80, rebounding from its first 50-day line test of 2024. At session highs of 512.21, the stock looked actionable, if it weren’t for the weak market and Meta’s upcoming earnings.

The company launched its Meta AI assistant, which it will roll out across its social sites.

Allstate Stock

Allstate stock climbed 3.8% to 169.11, rebounding from the 50-day line in strong volume, breaking a short downtrend and reclaiming a 168.05 buy point.

The relative strength line, which tracks a stock’s performance vs. the S&P 500 index, is at a 52-week high. The RS line is the blue line in the charts provided.

Insurers, traditionally defensive plays, are doing well in the current market. But Allstate profits are expected skyrocket in 2024, buoyed by much-higher premiums.

Tesla Stock

Tesla stock slumped 3.2% to 150.44, breaking below its April 2023 low to its worst levels since January 2003. Deutsche Bank downgraded TSLA stock, citing Tesla’s apparent shift away from a small EV to focus on a robotaxi. That mean Tesla’s current growth woes could last for several years.

Tesla earnings are due on April 23, with investors and analysts wanting answers from Elon Musk on the conference call.

Market Rally Analysis

The stock market rally has been “due” for a bounce, but once again couldn’t hold even modest morning gains.

There’s little or no reason to make new buys in the current market, especially with the earnings wave coming.

This is a time to be working on watchlists, looking for stocks holding or regaining key levels and showing relative strength.

Very few stocks are actionable

Read The Big Picture every 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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