Dow Jones futures saw a slight rise overnight, along with S&P 500 futures and Nasdaq futures. The stock market struggled on Wednesday as Treasury yields reached long-term highs, causing the Nasdaq to briefly dip below the 13,000 level. However, the major indexes managed to reverse their losses and close mixed. Meta Platforms appeared to be a catalyst for the market’s turnaround, as its stock initially fell but then slashed losses. Tesla also experienced a decline after a warning from Deutsche Bank, but managed to close off its lows. Peloton, on the other hand, surged after hours due to a partnership with Lululemon Athletica. The market is technically in a correction, but energy stocks, which have been rising with crude oil prices, showed bullish action on Wednesday.
The major indexes opened higher on Wednesday but soon reversed course, only to battle back and close narrowly mixed. The Dow Jones Industrial Average fell 0.2%, the S&P 500 index closed up 1 point, and the Nasdaq composite climbed 0.2%, breaking below the 13,000 level. While the S&P 500 and Nasdaq are technically on day one of a market rally attempt, more strength is needed for a confirmed new uptrend. Market breadth was modestly positive, with the small-cap Russell 2000 popping 1%. Energy stocks, particularly those related to crude oil, showed strength as crude oil prices surged to a 52-week high. Although most sectors look weak, growth ETFs such as the Innovator IBD 50 ETF and the VanEck Vectors Semiconductor ETF saw gains.
Meta unveiled its latest virtual reality headset, the Quest 3, at its Meta Connect event. The company also announced collaborations with Microsoft and the release of artificial intelligence tools. Although Meta stock initially fell, it rebounded and closed down just 0.4%. CEO Mark Zuckerberg’s keynote address at the event focused on virtual reality, metaverse news, and AI, which may have contributed to the stock’s bullish shakeout. Tesla stock experienced a decline but rallied off its lows as the major indexes recovered. While the stock is still working on a cup-with-handle buy point, it is 4.7% below its 50-day line. Deutsche Bank forecasts lower deliveries for the third quarter and has concerns about Tesla’s future performance. However, the bank’s forecast still predicts a rebound in profit for 2024.
In terms of individual stocks, Nov and SLB both saw significant gains as energy stocks showed strength. Nov stock jumped 4.7% and reclaimed a cup-with-handle buy point, while SLB stock climbed 2.8% and bounced from near its 50-day line. Chevron and Exxon Mobil also experienced gains, as did the XLE energy-related ETF. Overall, the market is currently in a correction, and caution is advised.
