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Dow Jones Futures: Stocks Swing On China, Powell; Nvidia Skids, Walmart Leads New Buys

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Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Chip-equipment giant ASML (ASML), Bank of America (BAC) and Morgan Stanley (MS) report early Wednesday, All are around buy points.

The stock market rally was mixed and volatile amid U.S.-China tensions and Fed chief Jerome Powell bolstering rate-cut expectations. Small caps rallied to a record high amid strong breadth. The Nasdaq fell as Nvidia (NVDA) slumped back below a buy point.

↑Stocks Mixed On China News, Powell. Walmart, Somnigroup, Astera Labs In Focus. See All Videos

Once-hot AI play Astera Labs (ALAB) dived, flashing a definitive sell signal.

Walmart (WMT) ran above a buy point on a shopping deal with OpenAI’s ChatGPT. TJX Cos. (TJX) and Somnigroup International (SGI) flashed buy signals as well.

Walmart stock was added to SwingTrader on Tuesday. Nvidia stock is on the IBD Big Cap 20. Walmart was Tuesday’s IBD Stock Of The Day.

The video embedded in the article reviews Tuesday’s stock market action and analyzes Walmart, Somnigroup and Astera Labs stock.

Dow Jones Futures Today

Dow Jones futures were 0.1% above fair value. S&P 500 futures advanced 0.15% and Nasdaq 100 futures rose 0.2%.

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 started Tuesday in the red amid fresh Beijing moves that stepped-up U.S.-China tensions. The major indexes rebounded from near their 50-day lines. But they weakened into the close as President Donald Trump said China not buying U.S. soybeans is an “Economically Hostile Act,” adding that he is mulling retribution.

In between those negative U.S.-China headlines, Fed chief Jerome Powell didn’t push back on October rate-cut expectations, citing weak labor markets. He also suggested the central bank may soon stop reducing its bond holdings.

The Dow Jones Industrial Average rose 0.4% in Tuesday’s stock market trading, back above its 21-day line. The S&P 500 index dipped 0.2% and the Nasdaq composite declined 0.8%, both fractionally below their 21-day lines.

The small-cap Russell 2000 jumped 1.4%, hitting a record high.

The Invesco S&P 500 Equal Weight ETF (RSP) gained 0.85%, back above its 50-day.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.3%. reflecting modest tech strength outside of Nvidia and a few megacaps.

JPMorgan Chase (JPM) and Goldman Sachs (GS) fell despite solid earnings, but pared losses to hold their 50-day lines. Citigroup (C) rose solidly back above that key level and the 21-day line. Wells Fargo (WFC), which had been a group laggard, gapped up 7.15% to reclaim a buy point.

Bank of America and Morgan Stanley reversed slightly higher Tuesday ahead of their earnings reports.

Overall, financials did well, along with several other industrials, housing and biotechs and more.

U.S. crude oil prices fell 1.3% to $58.70 a barrel.

The 10-year Treasury yield fell three basis points to 4.02%, back near six-month lows.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.15%. The iShares Expanded Tech-Software Sector ETF (IGV) declined 0.9%. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.8%, with Nvidia a huge holding and ASML also a notable position.

ARK Innovation ETF (ARKK) sank 1%. ARK Genomics ETF (ARKG) rose 0.8%.

SPDR S&P Metals & Mining ETF (XME) added 0.8%. SPDR S&P Homebuilders ETF (XHB) jumped 3.1%, with Somnigroup stock a big component. The Energy Select SPDR ETF (XLE) was down a fraction and the Health Care Select Sector SPDR Fund (XLV) advanced 0.3%.

The Industrial Select Sector SPDR Fund (XLI) bounced 1.2%. The Financial Select SPDR ETF (XLF) climbed 1.1%, with JPMorgan, Goldman, Citigroup, Wells Fargo Bank of America and Morgan Stanley all notable holdings.

Best Growth Stocks To Buy And Watch

Nvidia Falls, Astera Dives

Nvidia stock fell 4.4% to 180.01, back below the 184.48 flat-base buy point and the 21-day line, according to MarketSurge. The AI chip giant just held its 50-day moving average. NVDA stock slumped as Oracle (ORCL) said it’ll use 50,000 GPUs from Advanced Micro Devices (AMD).

Meanwhile, Astera Labs dived 19% to 161.55, gapping well below the 50-day line. ALAB stock tumbled 8.5% in Friday’s market sell-off, then fell 3.2% on Monday despite the broad market bounce. At this point, Astera stock has given up well more than half its gains from the 101.82 buy point cleared in late July.

Astera Labs appears to be falling on Nvidia and Broadcom news this week.

Meanwhile, ASML stock edged down 0.15% to 993.18. On a daily chart, the Dutch chip-gear giant is just above a 997.48 cup-with-handle buy point, though the handle is tiny. On a weekly chart, ASML’s cup-with-handle base is a higher 1,059.

Walmart Leads New Buys

Walmart stock jumped 5% to 107.21, back above a 104.72 flat-base buy point and hitting a fresh all-time high. The Dow Jones retail giant is teaming up with OpenAI to allow customers to purchase items directly within ChatGPT.

TJX stock gained 1.9% to 144.10, bouncing off the 21-day line and breaking a short downtrend. The discount retailer has a 145.58 flat-base buy point.

Somnigroup stock gained 2.7% to 87.35, bouncing off the 21-day and 10-week lines and clearing some short-term levels. Somnigroup, formerly Tempur Sealy, has an 88.15 buy point from a flat base after a strong run.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The past few days underscore how stocks will generally follow the market. Right now the market is choppy, prone to big daily and intraday swings. It’s not a good environment for making new buys, especially volatile names.

Investors should still be significantly to heavily invested. The market is close to record highs. Some quieter, sideways action for a few days or weeks would be constructive.

Keep working on watchlists. But if the market resumes selling with the major indexes and big leaders such as Nvidia breaking below their 50-day lines, you’ll also want to have your exit strategies in place.

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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