With the March jobs report looming as a key test for the stock market, Dow Jones futures, along with S&P 500 futures and Nasdaq futures, were little changed overnight.
X
Thursday's stock market rally started off strong after higher-than-expected unemployment claims. However, the major indexes showed solid gains in the afternoon before turning lower due to tensions in the Middle East.
Google's parent company alphabet (GOOGL) is reportedly considering a bid for the marketing software maker. hubspot (Hub). HubSpot stock has broken out of its baseline, but Google stock remains in buy zone. salesforce.com (CRM) has fallen from its initial entry in Google-HubSpot News.
Several stocks issued buy signals on Thursday morning, but fell back with the market.
tesla (TSLA) recovered, mitigating weekly losses due to dismal delivery performance. But Tesla stock is trading below key levels.
Nvidia (NVDA) has fallen below key levels but is still trading within its recent range.rival Advanced Micro Devices (AMD) suffered huge losses.
Nvidia stock is listed on the IBD Leaderboard and IBD 50.
job report
The Department of Labor will release its March employment report on Friday at 8:30 a.m. ET. Economists expect nonfarm payrolls to rise by 200,000, following an increase of 275,000 in February. The unemployment rate is expected to remain at 3.9%. Average hourly wages are expected to increase by 0.3% compared to February, and annual increases will slow from 4.3% to 4.1%.
The jobs report was released following an increase in weekly jobless claims, but overall economic trends were solid in the United States, with improvements in China and Europe. In addition to rising oil and primary commodity prices, there are growing concerns that inflation will not subside.
Markets believe there is a 69% chance that the Fed will cut interest rates in June.
Dow Jones futures today
Dow Jones futures fell slightly relative to fair value. S&P 500 futures and Nasdaq 100 futures rose.
The jobs report will almost certainly move Dow Jones futures and Treasury yields.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
The stock market's rally gave up its gains for the second time in a row in the afternoon, and Wednesday's downward reversal became even more pronounced.
Israeli Prime Minister Benjamin Netanyahu said Israel would be aggressive against Iran and its allies, saying, “We will harm anyone who harms us or attempts to harm us.'' I'll add it,'' he declared. This caused a reversal in the stock market and further increases in oil futures. Prime Minister Netanyahu's statement came as President Joe Biden strongly pushes for a ceasefire between Israel and Hamas.
The Dow Jones Industrial Average fell 1.35% in Thursday stock market trading, marking its fourth straight session of declines and falling below its 50-day line for the first time since Nov. 2. The biggest decliner on the Dow Jones Industrial Average was Salesforce stock. The S&P 500 index fell 1.2%, ending below its 21-day line for the first time in three months.
The Nasdaq Composite rose 1.2% during the day and closed 1.4% lower, falling just below its 10-week line for the first time since early November.
The small-cap Russell 2000 fell 1.1%, below its 21-day line.
A strong morning and weak closing price is not a good sign for the market. Still, the major indexes are not far from their highs. A slightly longer hiatus could be constructive.
Many major stocks once again signaled buy signals, but fell back. However, a strong market day can create a large buying opportunity.
Friday's jobs report could provide a boost, or major indexes and stocks could fall below support levels.
U.S. crude oil prices rose 1.4% to $86.59 a barrel, up 6.4% in the past five sessions and the highest since late October.
The 10-year Treasury yield fell nearly 5 basis points to 4.31%, after hitting a 2024 high of 4.43% on Tuesday morning, declining slightly for the second straight session.
ETF
Among growth stock ETFs, the iShares Expanded Technology Software Sector ETF (IGV) fell 1.2%, reversing its decline from its 50-day line. Salesforce is a key IGV component, with HubSpot playing a key role. The VanEck Vectors Semiconductor ETF (SMH) fell 2.7%, with NVIDIA stock being the dominant holding and AMD being a major member.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 1.4% and the ARK Genomics ETF (ARKG) fell 1.6%. Tesla stock is a major holding across Ark Investments, and Cathie Wood has been buying more shares in recent weeks.
SPDR S&P Metals & Mining ETF (XME) fell 1.6%. The SPDR S&P Home Builders ETF (XHB) fell 1.4%. The Energy Select SPDR ETF (XLE) was down less than 0.1%, and the Healthcare Select Sector SPDR Fund (XLV) was down 1.4%.
The Industrial Select Sector SPDR Fund (XLI) fell 0.9%. The Financial Select SPDR ETF (XLF) fell 1.1%.
Timing the Market with IBD's ETF Market Strategy
google stock
Google stock fell 2.8% to 150.53, mainly due to the market reversal. The stock fell below the handle buy point of 152.15 that cleared on Monday. According to the Financial Times, search giants are considering charging for premium AI search tools. Meanwhile, Google is considering acquiring HubSpot, according to Bloomberg.
HUBS stock rose to 693.85 during the day, clearing the flat-based buy point of 660. The digital marketing software specialist closed up 4.9% to 657.68, just below its entry.
However, buying stock on the buzz of a takeover carries significant risks if a deal doesn't go through.
Following the Google-HubSpot report, Salesforce stock fell 3.3% to 294.76, below its 50-day line and the low of the recent stock decline. Stocks tried to recover, but fell along with the market. Immediately after the move, CRM stock reached 311.30, breaking above the short trend line. After Friday's close, Salesforce was trading flat.
nvidia stock
Nvidia stock fell 3.4% to 859.05, closing below its 21-day moving average for the first time in three months. This was the lowest closing price since March 11th. Still, it looks like the AI chip leader could be weeks away from entering the base that began with the ugly reversal of declines on March 8th. This was the day after NVDA stock closed 41.9% above its 50-day line. Nvidia's Thursday close was just 8.3% above its 50-day line and 5% above its 10-week line.
But while Nvidia and most AI chip stocks suffered modest losses, AMD suffered a severe decline. The stock hit resistance at the 50-day line and subsequently fell 8.3% to 165.83. AMD stock has lagged Nvidia, especially since its reversal date on March 8th.
tesla stock
Tesla shares rose 1.7% to 171.18, paring intraday gains from the market reversal. The stock is down 2.7% this week, an impressive number considering the EV giant's surprisingly weak first-quarter vehicle delivery numbers announced on Tuesday. Tesla has already lowered prices and offered new incentives in key markets for the start of the second quarter.
TSLA stock remains below its 10-week line, a key resistance line in 2024.
Although the stock price has fallen 31.1% in 2024, Tesla stock is not that cheap when looking at the forward price-to-earnings ratio (PER).
what to do now
Once again, stock prices showed strength in the morning, but slumped in the afternoon.
So far, the market's rally has been normal, with only a few weeks of lulls. A sideways market can be positive in the long term, but it can be difficult in the short term.
However, investors who jumped on the buying opportunity on Wednesday and Thursday morning will likely be left with losses if they do not reduce these positions.
If the market reacts well to Friday's jobs report, recent buying will look prudent and investors will have plenty of new buying opportunities. A sharp sell-off in the market following the jobs report could trigger a sell signal, especially for new positions.
So prepare your watchlist and exit strategy.
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