The stock market rally saw the S&P 500 and Nasdaq hit record highs in a half-day of trading on Wednesday. The jobs report is due to be released early Friday after the Independence Day holiday.
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Nasdaq, S&P 500 hit new record highs; ASML, Tencent Music, Agnico Eagle Mine in focus
Treasury yields fell sharply after the ISM services index for June suggested a contraction and weaker-than-expected labor data was released. Tesla (TSLA) continued its strong rally, climbing up to a major trendline. NVIDIA (NVDA) had a solid session on a strong chip day.
According to minutes from the Fed’s June meeting released after the market’s early close, policymakers see risks “moving toward more balanced” but want “greater confidence” that inflation is heading toward the 2% target before cutting rates.
ASML (ASML), Entegris (ENTG), Monday (MNDY), Agnico Eagle Mine (AEM), Southern Copper (SCCO), Tencent Music (TME) and Vistra (VST) All buy signals were issued on Wednesday.
Nvidia, ASML and Agnico-Eagle stocks are on the IBD Leaderboard, Weatherford stock is on the Watchlist, and Nvidia and Monday.com are on the IBD 50.
ASML was IBD’s Stock of the Day on Wednesday.
Employment Report
The Labor Department will release its June jobs report at 8:30 a.m. ET on Friday. Economists expect nonfarm payrolls to grow by 189,000, slowing from May’s gain of 272,000. The unemployment rate is expected to remain at 4%. Average hourly earnings are expected to grow 3.9% year over year, down from May’s 4.1% increase.
Dow Jones Futures Today
Dow Jones futures begin trading at 3 p.m. ET. ETFs tracking the Dow Jones, S&P 500 and Nasdaq 100 were little changed from Wednesday’s close.
U.S. stock and bond markets will be closed on Thursday, July 4. However, other exchanges around the world will be open and Dow futures will trade as usual.
Friday’s jobs report will certainly impact Dow futures and Treasury yields early Friday morning.
Remember that overnight movements in Dow futures or any other stocks do not necessarily translate into actual trading in the next regular stock market session.
IBD experts break down major stocks and markets on IBD Live.
Stock market rise
Wednesday’s stock market rally was technically mixed, but the S&P 500, Nasdaq and major stocks were clearly exuding a bullish mood.
The Dow Jones Industrial Average was slightly lower on the stock market Wednesday. The S&P 500 rose 0.5%. The Nasdaq Composite Index added 0.9%. The Russell 2000 small-cap index rose 0.1%, but fell back from its highs after briefly regaining its 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) was down slightly, while the First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) rose 0.15% to close at a record high.
The Nasdaq is currently 7.6% above its 50-day moving average and rising, which increases the risk of a pullback, although it doesn’t call for one to happen anytime soon.
U.S. crude oil prices rose 1.3% to $83.88 per barrel.
The 10-year Treasury yield fell 9 basis points to 4.35%, down 13 basis points in two sessions.
The ADP employment report and initial jobless claims signaled a slightly weaker-than-expected labor market, while the ISM services index unexpectedly fell into contraction territory.
ETF
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.6%. The iShares Expanded Tech-Software Sector ETF (IGV) was up slightly. The VanEck Vectors Semiconductor ETF (SMH) rose 2.4%. Nvidia shares and ASML are major holdings in SMH.
Reflecting stocks with speculative stories, the ARK Innovation ETF (ARKK) rose 1.8%, and the ARK Genomics ETF (ARKG) rose 1.2%. Tesla shares are the No. 1 holding in the Ark Invest ETF. Cathie Wood sold some of her Tesla shares on Tuesday.
The SPDR S&P Metals & Mining ETF (XME) rose 1.8%. The Global X US Infrastructure Development ETF (PAVE) rose 0.85%. The US Global Jets ETF (JETS) rose 1.5%. The SPDR S&P Homebuilders ETF (XHB) rose 0.5%. The Energy Select SPDR ETF (XLE) rose 0.25% and the Health Care Select Sector SPDR Fund (XLV) fell 0.7%.
The Industrial Select Sector SPDR Fund (XLI) rose 0.3%, while the Financial Select SPDR ETF (XLF) fell 0.2%.
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Nvidia stock
Nvidia shares rose 4.6% to 128.28, decisively surpassing their 21-day and 10-day moving averages for the first time since June 20. Aggressive investors could have used Wednesday’s trading to buy a few more shares, but Nvidia shares may need to take a break.
Tesla stock
Tesla shares rose 6.5% to 246.39 on Wednesday, extending their weekly gain to 24.6% after gaining 8.1% last week.
Shares are trading significantly higher from a buy point at 191.08. TSLA stock is heading towards a long-term trendline that would bring it back to all-time highs in late 2021. Ideally, Tesla will take some time off. Earnings are due to be released in the next two weeks.
Stocks in buy area
ASML shares rose 2.2% to 1,071.20, re-exceeding a buy point of 1,056.34, according to MarketSurge analysis. The semiconductor equipment giant recently found support at its 21-day line. ASML is scheduled to report earnings on July 17.
Entegris shares rose 3.1% to 140.81, above the buy recommendation level of 139.81.
Monday.com shares rose 2.65% to 243.31, above the 239.54 entry and back above the previous base buy point of 239.22.
Angeco Eagle shares rose 4% to 68.27, bouncing above their 50-day line and breaking out of a trendline, while AEM shares are trading flat to a 71.50 buy point.
Southern Copper shares rose 5.5% to 116.03, climbing above its 50-day line. SCCO stock is showing a consolidation pattern with an official buy point of 120.79.
Tencent Music shares rose 3.5% to 14.94, breaking out of a trendline within the sideways range, with an official buy point at 15.77. TME shares are bouncing off their 50-day moving average.
Vistra shares rose 4.1% to 91.31, again above its 50-day line and a short-term high. The AI-related power generation company may be starting to build on the right side of a new foundation.
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What to do now
The stock market rally is showing strength across the most important indexes, and while the market could be broader, there are plenty of stocks across various sectors that are sending out buy signals.
That’s why it’s important to run your screens consistently and cast your net wide.
The ever-increasing expansion of the Nasdaq is a reason to be cautious about adding exposure, but the overall bullish trend remains well-maintained.
Start keeping an eye on earnings release dates, as quarterly reports will pick up steam over the next week or so.
Read The Big Picture every day to stay on top of market direction, leading stocks and key sectors.
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