Dow Jones futures edged higher early Wednesday, along with S&P 500 futures and Nasdaq futures. Tesla rivals Rivian and Lucid reported Tuesday night, with staffing firm Upwork among the big winners.
X
The stock market rally extended its winning streak Tuesday, with Treasury yields pulling back and earnings generally positive. Datadog (DDOG) skyrocketed on a beat-and-raise report, lifting a number of other cloud software names.
In addition to DDOG stock, MongoDB (MDB) and Dynatrace (DT) cleared early entries. Adobe (ADBE) and ServiceNow (NOW) moved above official buy points.
However, market breadth was lackluster at best, with energy stocks tumbling.
Earnings
Tesla (TSLA) rivals Rivian (RIVN) and Lucid (LCID), Akamai Technologies (AKAM), Axon Enterprise (AXON) and Warren Buffett-backed Occidental Petroleum (OXY) reported Tuesday night.
So did Gilead Sciences (GILD), Array Technologies (ARRY), Upstart Holdings (UPST) and Upwork (UPWK).
Winners: UPWK stock surged more than 15% in overnight after closing just above 50-day line. AKAM stock rose solidly after closing within a buy zone. RIVN stock jumped on better-than-expected Q3 results and a raised full-year production target. AXON stock rose modestly, signaling a possible move back into a buy zone. OXY stock edged higher.
Losers: UPST stock plunged more than 20% on a wider-than-expected loss and weak revenue. ARRY stock dived over 10% as the solar-tracking firm missed on revenue and guidance. GILD stock fell slightly. LCID stock declined solidly as revenue fell well short and the luxury EV maker slashed production goals once again.
Meanwhile, Tesla stock was little changed overnight as its premium EV startup rivals reported. TSLA closed up 1.3% to 222.18, back above the 200-day line but below the 21-day line.
DDOG stock was added to IBD Leaderboard, joining NOW stock. ServiceNow, Adobe and DT stock are on the IBD 50. ServiceNow and ADBE stock are on the IBD Big Cap 20.
The video embedded in this article discusses Tuesday’s market action and analyzes Datadog, MDB stock and Uber Technologies (UBER).
Dow Jones Futures Today
Dow Jones futures climbed about 0.1% vs. fair value. S&P 500 futures and Nasdaq 100 futures edged higher.
The 10-year Treasury yield rose slightly to 4.58%.
Crude oil futures edged lower.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on “IBD Live”
Stock Market Rally
The stock market rally continued to advance Tuesday, thanks to sliding Treasury yields and a booming software sector.
The Dow Jones Industrial Average rose 0.2% in Tuesday’s stock market trading. The S&P 500 index advanced 0.3%. The Nasdaq composite popped 0.9%.
The Nasdaq 100 is now clearly breaking a trendline going back to its July 19 high, rising 0.9%. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) gained 0.8%, right around the 50-day and a trendline, thanks to software gains.
But overall, market breadth was negative. Winners narrowly led on the Nasdaq. New lows outpaced new highs on both exchanges.
The small-cap Russell 2000 slipped 0.3%. The Invesco S&P 500 Equal Weight ETF (RSP) dipped 0.2%.
The Nasdaq has now rallied for eight straight sessions, with the Dow Jones and S&P 500 up for the past seven. A pause wouldn’t be a surprise, though that has been true for a few days now. And with the Nasdaq and S&P 500 nearing their October highs and market breadth narrowing, the odds are even higher now.
Energy stocks fell hard Tuesday, with some resilient leaders cracking.
U.S. crude oil prices plunged 4.3% to settle at $77.37 a barrel. That is the lowest close since late July.
The 10-year Treasury yield retreated 9 basis points to 4.57%, back to the 50-day line. But the U.S. dollar had a decent gain.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) popped 2%. Adobe stock and ServiceNow are big IGV components, with Datadog and Dynatrace also in IGV. The VanEck Vectors Semiconductor ETF (SMH) advanced 0.6%.
Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) rallied 2.9% and ARK Genomics (ARKG) popped 3.2%. Tesla stock is a major holding across ARK Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) slid 1.9%. SPDR S&P Homebuilders (XHB) stepped up 0.65%. The Energy Select SPDR ETF (XLE) retreated 2.2%, and the Health Care Select Sector SPDR Fund (XLV) edged up 0.1%.
The Industrial Select Sector SPDR Fund (XLI) fell 0.25%, and the Financial Select SPDR ETF (XLF) dipped 0.15%.
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Software Stocks In Buy Zones
Early Wednesday, Datadog reported that third-quarter earnings surged 96% vs. a year earlier, easily beating and with growth accelerating for a second straight quarter. Sales grew 25% for a second straight quarter, also topping. Datadog, which offers a monitoring and analytics platform for software developers, also guided higher for Q4.
DDOG stock skyrocketed 28.5% to 102.20, breaking a downtrend going back to July. Shares cleared a 102 buy point from a choppy double-bottom base. Investors buy DDOG stock now or perhaps after a pause.
Datadog earnings fueled big gains in many cloud software names.
MDB stock jumped 11% to 369.04, breaking above the 50-day line and a tight trendline, while also clearing October highs of 374.67 intraday. That offered an early entry in MongoDB stock, though shares backed off an intraday high of 384.15. Investors might use that as an entry. The official buy point is 439. MongoDB, like Datadog, has a relationship with Amazon Web Services, the cloud-computing unit of Amazon.com (AMZN),
DT stock popped 3.15% to 48.77, rebounding from the 50-day line and clearing last week’s post-earnings high of 48.70. Investors could use that as an entry, though the Oct. 12 high of 49.90 is not far off. Dynatrace stock is still in the lower half of a 23%-deep consolidation with a 55.87 buy point.
Meanwhile, Adobe stock climbed 3.5% to 585.20, clearing both a 570.24 flat-base buy point and a 574.40 alternate entry. NOW stock edged up 0.8% to 613.91, moving further above a 607.90 double-bottom buy point and topping the top of the consolidation intraday.
Both software giants rose in above-average volume, with their relative strength lines at highs. However, both ADBE stock and ServiceNow are near getting stretched vs. the 50-day line.
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What To Do Now
The stock market rally continues to power higher, with major indexes on a winning streak. More stocks are flashing buy signals, while others are extending moves or gapping up in bases.
Investors have had opportunities to add exposure in the past several days.
Don’t ramp up buys on any one day. That helps you avoid a sudden market reversal. If you gradually build up your portfolio in a healthy market, it doesn’t take long to go from light exposure to heavily invested.
A market pause arguably is “due,” though it doesn’t have to be right away. A modest, low-volume pause or pullback would be healthy, letting some recent winners catch their breath and perhaps form handles.
Definitely work on your watchlists. Some stocks have moved out of buy zones while others are moving into position.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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