Dow futures: Market rally higher, but Nvidia pulls back late on AI chip export ban report

Dow futures were little changed early Wednesday, while S&P 500 and Nasdaq futures were slightly lower. NVDA stock fell overnight after it was announced that the US may expand chip export restrictions.

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The stock market rally made solid gains on Tuesday after a mixed session on Monday. The Nasdaq and S&P 500 have bounced off close to their 21-day exponential moving average, along with a massive outcry. Tesla (TSLA) And nvidia (NVDA). Overall market breadth was strong.

United Airlines (UAL), American Airlines (AAL), fedex (FDX), Emcore Technology (AMKR) And on hold (Onon) All purchase points clearing.

Tesla, On Holding, and Nvidia stocks are in the running IBD Leaderboard, while the UAL arrow is in the leaderboard watchlist. United Airlines and ONON shares on defect 50. Tesla stock is located at IBD Big Cap 20. United Airlines stock was IBD Bank stock on Tuesday.

Is the market downturn over or is this just a one-day snapshot? That’s a big question. Investors can take advantage of buying opportunities, carefully, but are willing to pull back if positions or the broader market declines again.

The video embedded in this article discussed the strong rally in the market on Tuesday and analyzed FDX, United Airlines, and… datadog (DDOG).

The United States is considering export restrictions on artificial intelligence chips

The Biden administration is studying what’s new Restrictions on exports of artificial intelligence chipsThe Wall Street Journal reported Tuesday night, citing sources.

The Commerce Department can stop shipments of AI chips from Nvidia and others to China and other relevant countries without first obtaining a license.

Nvidia stock fell 3% in extended trade. advanced micro devices (AMD) sank more than 2%. from Broadcom (AVGO) decreased by 1%.

In addition to potential lost business for Nvidia, AMD, and others, expanded chip exports could spur China to retaliate. Beijing already has limited sales of micron technology (mo) to major customers, citing cybersecurity concerns. Micron’s price, which was announced on Wednesday evening, fell overnight.

in other news, Soul Aviation Systems (SPRLate Tuesday, I reached a preliminary agreement with the striking workers. Spirit Aero builds the fuselage for the 737 Boeing (Bachelor’s). SPR stock rose slightly in late trading. BA stock rose.

Dow jones futures today

Dow futures were flat against fair value, even as Boeing stock offered a small boost. S&P 500 futures fell 0.1% and Nasdaq 100 futures fell 0.25%. Nvidia and AMD stocks are notable S&P 500 and Nasdaq 100 components.

Crude oil prices rose.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live

Stock market rise

The stock market rally enjoyed a strong broad-based advance. Economic data was upbeat, with new home sales falling in May, while June reports on consumer confidence and manufacturing in the Richmond area also topped.

The Dow Jones Industrial Average rose 0.6% in stock market trading Tuesday. The S&P 500 rose 1.1%. The Nasdaq Composite jumped 1.65%. Small Capital Russell 2000 jumped 1.5%.

US crude oil prices fell 2.4 percent to $67.70 a barrel.

The 10-year Treasury yield rose 5 basis points to 3.77%, staying within a range dating back to late May.

Exchange Traded Funds

Among the ETFs, the Innovator IBD 50 ETF (fifty(up 2.6%, while Innovator IBD Breakout Opportunities ETF)fit) gained 2.5%. iShares Expanded Technology and Software ETF (IGV) jumped nearly 2%.

VanEck Vectors Semiconductor Corporation (SMH) jumped 3.2%. NVDA, SMH’s largest holding company, rose 3.1%, bouncing near the 21-day line. But it was an internal day after falling 3.7% on Monday.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(jumped 3.4% and the ARK Genomics ETF)ARKG) increased by 0.7%. Tesla stock is the #1 component across Ark Invest’s ETFs. The EV giant rose 3.8% to 250.21 on Tuesday, rebounding from the 21-day streak but after falling 6.1% on Monday. Arguably, TSLA stock has a buy point at 274.75 on the consolidation going back to September.

SPDR S&P Metals & Mining ETFs (XME(by 1.3% and the US Global X Fund for Infrastructure Development)cradle) 1.7%. US Global Gates Foundation ETF (Planes) flew 4.4%, with shares of UAL and American Airlines large portions of the ETF. SPDR S&P Homebuilders ETF (XHB) by 2.9%. Energy Defined Fund SPDR ETF (xle(Increased 0.2% and SPDR Healthcare Sector Choice Fund)XLV) decreased by 0.2%.

SPDR Industry Selection Fund (XLI) increased by 1.2%.

SPDR Financial Selection Fund (XLF) advanced 0.8%. SPDR S&P Regional Banking ETF (KRE) rebounded 3.2%.

Top five Chinese stocks to watch now

Stocks in buy zones

UAL stock jumped 5.1% to 56.03, taking 54.05 cups from the buy handle point. AAL stock jumped 5.5% to 17.35, hovering above the 16.72 entry level from its cup of handle, according to MarketSmith analysis. United and America jumped according to each other Delta Airlines (DAL) raised steering the whole year. DAL, already extended, jumped 6.8%

FDX stock jumped 5% to 246.76, jumping above 235.81 flat base buy points. FedEx had peeked above that entry in mid-June, but then pulled back on mixed earnings. Stocks quickly rebounded from the 50-day line.

AMKR rose 11.4% to 29.37 on huge volume, easily surpassing a buy point of 27.20. The chip equipment maker has now crossed its 5% buy zone, which extends to 28.56.

ONON stock rose 2.2% to 31.30, and is still in the range from the 50-day line and the trend line. The high-end sneaker maker moved above those key levels on Monday. During the day on Tuesday, shares slipped above 31.45, a short-term high.

Stock market forecast for the next six months

Market rally analysis

The stock market rally saw a clear bullish session. Indices rebounded around a key short-term level in higher volume, with strong breadth and a number of stocks flashing buy signals.

The Nasdaq and the S&P 500 have rebounded from the 21-day boundary. Meanwhile, the Dow Jones and Russell 2000 indices have regained that key level.

Invesco S&P 500 Equal Weight Fund (RSP), which rebounded for 21 days on Monday, rose 1.2% on Tuesday, breaking through the recent downtrend and topping the 10-day line.

First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEW), which fell only 0.2% on Monday, rose 1.7% on Tuesday, also rebounding from 21 days.

The losers handily beat the losers on Tuesday.

Airlines and travel were big gainers, but chips and software, industrial companies, transportation and the broad housing sector all showed upward movement as well.

Energy remains a weak area, while biotech and some sectors struggle.

Tuesday may mark the beginning of a new phase in the market rally. The Nasdaq held a follow-up day later. But it has not completely broken the recent decline which is just below the 10-day line.

The report of AI chip export restrictions hitting Nvidia overnight is an unexpected headwind.

Also, after rebounding on Tuesday, the Nasdaq is up 6.5% above the 50-day moving average while the Nasdaq-100 is up 7.5%. It wouldn’t take much for them to reach extreme levels again.

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What are you doing now

With the stock market rally showing positive signs, investors could certainly have looked for places to add some exposure. There is still a risk that the pullback is not over, and that buying opportunities on Tuesday will quickly go south. But if you wait for definitive evidence that the downturn is over, such as the Nasdaq hitting a new high, it will be too late to chase the stock.

One option is to take smaller positions on new buys. Be prepared to move quickly and consider taking partial profits quickly to reap some winnings.

Keep the purchases as close as possible to the entries. This will provide some protection from stock and market reversals.

Surely you have your watchlists ready. Broad progression with diverse leadership means it is difficult to keep track of all the promising stocks. But this is a good problem.

Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.

Please follow Ed Carson on Twitter at @tweet For stock market updates and more.

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