Dow futures fall: Palo Alto pulls back late after tech companies decline; Sell ​​Nvidia before earnings?

Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. Palo Alto Networks (Bano) Overnight earnings headline.

X

The overall stock market rally eased on Tuesday, led by artificial intelligence stocks including… Nvidia (NVDA), which pays dividends on Wednesday night.

These results and guidelines will have a significant impact on the likes of Advanced micro devices (AMD), Holding arm (arm) And Super micro computer (SMCI), all of which fell strongly on Tuesday, moving away from their lowest levels. But Nvidia could be a catalyst for dozens of AI plays, including some from fellow corporate giants.

Investors should be careful about new purchases. They also have to decide whether to keep partial or partial dividends in Nvidia as well as other AI stocks.

The video embedded in this article discussed and analyzed Tuesday's market action Manhattan Associates (Manh), Service now (now) And GigaCloud technology (Jct). Shares of MANH and ServiceNow fell to key levels, while GigaCloud suffered a sharp sell-off on Tuesday.

Nvidia, ServiceNow, and ARM stock were up and running IBD Leaderboard. Nvidia, ServiceNow, Manhattan Associates, and GCT stock are all in the market Bahraini dinar 50. Nvidia, ServiceNow, Manhattan Associates, and SMCI are all in the market IBD Big Cap 20.

Amazon.com (Amzn) will join the Dow Jones Industrial Average before the open on Monday, February 26, the S&P Dow Jones Indices announced late Tuesday. AMZN stock will be replaced Walgreens Shoe Alliance (World Boxing Association). Uber technologies (Uber) will join the Dow Jones Transportation Average, replacing JetBlue Airlines (JBLU).

Amazon shares rose slightly in extended trading and Uber shares rose. Walgreens's price fell modestly and JetBlue's stock was little changed.

Dow jones futures today

Dow Jones futures lost 0.1% versus fair value. S&P 500 futures fell 0.15%, and Nasdaq 100 futures fell 0.3%.

Remember, an overnight move in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Profits

Palo Alto earnings beat views, but the cybersecurity giant cut full-year billings and revenue guidance. PANW stock fell in overnight action. Shares fell 10.1% in Tuesday's regular session to 366.09. Palo Alto stock is set to fall below its 50-day line after hitting record highs earlier this month.

Several other cybersecurity stocks fell strongly on Palo Alto's guidance.

Take care of the brothers (Tulle) Earnings comfortably exceeded fiscal first quarter views. TOL stock rose modestly in extended trading, approaching a breakout. The luxury homebuilder's stock rose 1.3% to 103.55 on Tuesday, rebounding from a 50-day streak. Toll Brothers stock is not far from the 105.91 flat-based buy point.

SolarEdge technologies (SEDG) topped EPS views but lost revenue and fell sharply in the first quarter. SEDG stock fell overnight. The solar inverter maker fell 0.75% on Tuesday to 84.42.

Social sprout (SPT) Q4 views exceeded slightly, but SPT shares were sold off in an extended move. Shares fell 0.3% to 64.48, but again held support at the 21-day line after reversing lower from a cup-with-handle buy point of 66.42 on February 12.

Join IBD experts as they analyze leading stocks and the market on IBD Live

Stock market pool

The stock market rally eased, as investors booked profits in artificial intelligence and other technology stocks, even though the indexes came off their worst levels.

The Dow Jones Industrial Average fell 0.2% in stock market trading Tuesday, with Walmart (And die) Providing an elevator. The S&P 500 index fell 0.6%. The Nasdaq Composite fell 0.9%, but closed above its 21-day line.

The small-cap Russell 2000 stock gave up 1.4% and continues to make big daily moves. The price is still above the 21-day and 50-day lines.

The market rally is getting a much-needed pullback. This can be constructive, allowing moving averages to catch up and creating new buying opportunities for leading stocks.

US crude oil prices fell by 1.28% to $78.18 per barrel.

The yield on the 10-year Treasury note fell two basis points to 4.28%.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) fell 1.2%, with significant holdings from Palo Alto and ServiceNow. VanEck Vectors Semiconductor ETF (Trait) sank 2%. Nvidia is the No. 1 stock in SMH, with AMD being a major component.

Reflecting more speculative stocks, the ARK Innovation ETF (Ark(slide 3.3% and ARK Genomics ETF)Arkj) lost 2.6%.

SPDR S&P Metals and Mining Fund (XME(down 2% and the SPDR S&P Homebuilders ETF)XHB) closed slightly higher. Energy Select SPDR ETF (XLE(Depreciated by 0.9% and Healthcare Sector SPDR Fund)Forty-fifth) decreased by 0.3%.

Selected Industrial Sector SPDR Fund (forty-first) and Financial Select SPDR ETF (XLF) decreased by 0.3%.

Time the market with IBD's ETF market strategy

Nvidia stock

Nvidia stock fell 4.35% to 694.52 on Tuesday, but came off the lows and never fell to test the 21-day line. The chip giant has risen for six straight weeks. Shares are still above the 21-day line.

Nvidia's earnings are due after the close on Wednesday. Analysts are forecasting a massive 422% gain for earnings per share. With revenues up 237% to $20.37 billion. This will be the third straight quarter of triple-digit gains. But investors may be expecting another surprise report.

Any signs of slowing growth could hit Nvidia, the tech sector and the market overall.

NVDA stock fell slightly overnight following Palo Alto and other earnings losers.

Should investors hold Nvidia through profits, or take full or partial dividends?

Those who bought the flat 505.48 level, and the key breakout in early January – or earlier – have certainly earned the right to hold NVDA shares. But it comes down to your investment style, position size, belief in the stock and overall market condition.

Maybe instead of selling Nvidia, investors should consider selling last AI shares before Wednesday's close. Many AI stocks are significantly expanded while others are struggling around buy points.

Other AI stocks

AMD stock is a direct competitor to Nvidia, so it's sure to have a big reaction to its recent earnings report. The AMD index fell 4.7% on Tuesday to 165.69, retreating from its 21-day moving average and the lows of the past few weeks. It is approaching the 50 day and 10 week lines.

ARM stock fell 5.1% to 121.77, but found support at the 10-day line. Stocks gave up much of their huge post-earnings moves earlier this month, but not their initial earnings day gains.

Super Micro stock fell to a low of 692.50 during the day, but rebounded to close down just 2% at 787.57. This came after SMCI stock fell 20% on Friday from what appeared to be a peak high after a huge rally in less than a month. The price remains above the 21-day EMA and more than 150% above the 200-day line.

ServiceNow stock fell 1.6% to 752.84 on Tuesday, bouncing slightly from its 50-day and 10-week lines. It's a place to buy or add stock, but Nvidia's dividend increases the risk significantly.

Like Nvidia, all four of these AI plays fell slightly to modestly in extended business amid weak earnings from Palo Alto and others.

IBD Digital: Unlock IBD's featured stock listings, tools and analysis today

What are you doing now

This is not a good time to buy stocks, especially in the technology sector. Some stocks like ServiceNow and Manhattan Associates are falling to key levels, indicating potential buying opportunities, but Nvidia's earnings raise the risks significantly.

Non-AI stocks, especially non-technology stocks, may fare better overall, but they will also likely struggle if the overall market continues to decline.

Investors could consider more profit taking in the very near future.

However, this is a good time to look for buying opportunities and setups from the current pullback. Keep your watchlists up to date.

Read The Big Picture every day to stay on top of the market trend and leading stocks and sectors.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.

You may also like:

Why This IBD Tool Simplifies Your Search for the Best Stocks

Get your next big winning stock with MarketSmith

Do you want to get quick profits and avoid big losses? Try SwingTrader

Best growth stocks to buy and watch