May 21, 2024

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Dow Jones Futures: Stock Market Waits for CPI Inflation;  Tesla rises as Nvidia falls on competing AI chips

Dow Jones Futures: Stock Market Waits for CPI Inflation; Tesla rises as Nvidia falls on competing AI chips

Dow futures rose slightly after hours, along with S&P 500 futures and Nasdaq futures. The CPI inflation report will be released on Wednesday, along with key reports from… Delta Airlines (D) and chip maker Nvidia Taiwan Semiconductor Co., Ltd (TSM).




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The overall stock market rally rose on Tuesday, with investors wary of big moves ahead of the CPI inflation report. The expansion was positive, but a number of leaders were under pressure.

Nvidia (NVDA) is undermining recent lows on Tuesday but has also found key support. This came up as a Google parent the alphabet (Google) Announce a new internal AI processor using Holding arm (arm) designs, which reduces its dependence on Nvidia chips. Intel Corporation (you are K) also revealed an AI chip to compete with Nvidia. Google stock rose further into the buy zone. ARM stock initially bounced but then reversed lower. Intel rose after hitting new 2024 lows.

Tesla (TSLA) Extended gains on Elon Musk promoting taxis. Tesla stock is approaching major resistance.

Nvidia and ARM stock is on IBD Leaderboard. Arm Holdings and Nvidia shares are in the market Bahraini dinar 50. Nvidia stock exists IBD Big Cap 20.

The video embedded in this article reviewed Tuesday's market action and analyzed Nvidia stock, Royal Caribbean (kick) And Nutanix (NTNX)

Consumer Price Index Inflation Report

The Department of Labor will release the Consumer Price Index at 8:30 a.m. ET. Consumer prices are expected to rise by 0.3%, along with the CPI excluding food and energy.

Overall CPI inflation is expected to rise year-over-year by 3.5%, up 3.2% from February. Core CPI inflation is expected to fall to 3.7% from 3.8%.

Minutes from the Fed's March meeting will be released at 2 p.m. ET.

The Producer Price Index for March will be released on Thursday morning.

These key economic reports come as prospects for a Federal Reserve rate cut in June have turned into a fiasco.

Dow jones futures today

Dow Jones futures rose a fraction against fair value, along with S&P 500 futures. Nasdaq 100 futures rose 0.1%.

The CPI inflation report is sure to impact Dow Jones futures and Treasury yields.

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Remember, an overnight move in Dow Jones futures and elsewhere does not 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 pool

The stock market rally had a quiet session on Tuesday, but major indexes improved from slightly lower to stable or slightly higher.

The Dow Jones Industrial Average closed slightly lower in stock market trading on Tuesday. Meanwhile, the S&P 500 rose 0.1%. The Nasdaq Composite Index rose 0.3%. The small-cap Russell 2000 index also advanced 0.3%.

While the major indices had a relatively quiet day, and winners outnumbered losers, a number of leading companies were hurt, not just Nvidia.

Royal Caribbean stock fell 3.7%, returning below the buy point. Decker outdoors (Deck) by 2.4%, closing below the 50-day line for the first time since late October. Cava group (reward) surrendered 7.2% for the first 10-week streak test of 2024.

But there were also a number of stocks that held up well or advanced.

US crude oil prices fell by 1.4% to $85.23 per barrel.

The yield on the 10-year Treasury note fell six basis points to 4.365%.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) rose by 0.3%. VanEck Vectors Semiconductor ETF (Trait) rose by 0.5%. Nvidia stock is SMH's largest ever holding, and Taiwan Semiconductor is a large member as well. Intel is also present at SMH.

Reflecting more speculative stocks, the ARK Innovation ETF (Ark) and ARK Genomics ETF (Arkj) Both gained 1.1%. Tesla stock is a huge holding across Ark Invest's ETFs.

SPDR S&P Metals and Mining Fund (XME) by 1.1% and the Global X US Infrastructure Development ETF (cradle) decreased by 0.5%. US Global Jets ETF (Planes) rose by 0.5%. SPDR S&P Homebuilders ETF (XHB) decreased by 0.1%. Energy Select SPDR ETF (XLE(Close slightly higher and Healthcare Select Sector SPDR Fund)Forty-fifthAdvanced 0.4%

Selected Industrial Sector SPDR Fund (forty-first) decreased by 0.2%. and the Financial Select SPDR ETF (XLF) decreased by 0.6%.

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Nvidia stock

Nvidia stock fell to a low of 830.22 on Wednesday, hitting its lowest levels since March 1. But the AI ​​chip leader found support around the 10-week line, paring losses to close 2% lower at 853.54. A strong move away from the 10-week line, the first such test since the breakout in early January, would provide a buying opportunity. NVDA stock is scheduled to have a fixed base at 974 buy points after this week.

Nvidia faces increasing competition in the field of artificial intelligence. Even if its chips stay a step ahead, competing products will dampen Nvidia's sales and prices at the margin. Customers will want to diversify their AI chip suppliers to avoid over-reliance on Nvidia.

Google-Arm AI processor, Intel chip

Google held a major cloud computing event on Tuesday. The highlight was the new AI processor that uses arm designs.

Additionally, Google stock rose 1.1% to 156.60, still within a 152.15 buy point range.

ARM stock rose to 135.41 shortly after the open, but reversed to close down 1.9% to 126.81. Shares have found support at the 21-day line, and are trading slightly above the 50-day line but below the 10-week line. The wireless chip design giant has 164 consolidated purchasing points, according to Marketsorg. But the sloping trend line or level 145 may provide safer early entry points.

Meanwhile, Intel unveiled its Gaudi 3 AI chip to compete with Nvidia. Intel stock rose 0.9% after hitting 2024 lows during the day, continuing to trade below all of its major moving averages.

Tesla shares

Tesla stock rose 2.25% to 176.88 on Tuesday, after Monday's 4.9% jump. Stocks are rebounding from an 11-month low after Elon Musk promised to unveil a robotaxi on August 8. But it's unclear what that would entail, given that Tesla's full self-driving isn't ready for driverless work. TSLA stock is approaching the 10-week moving average, which has served as resistance in 2024.

Taiwan Semiconductor Co., Ltd

Taiwan Semiconductor Corp. will release March and first-quarter sales numbers early Wednesday. The foundry giant, which will report earnings next week, makes chips for Nvidia, apple (Camel), Broadcom (Afgo), Google and many more. It is also a major buyer of chip equipment. So the Taiwan Semi reports will have wide-ranging implications for the sector.

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TSM stock rose 1.8% on Tuesday to 145.40, extending Monday's 1% advance but closing at higher levels. Taiwan semi-stocks are on a potential new base.

Delta earnings

Ahead of the opening, Delta's earnings are expected to rise 45% from a year earlier, while first-quarter revenues rise 6%. This results in profits for US airlines.

Delta stock rose 0.7% to 47.32 on Tuesday. DAL stock has a cup-with-handle buy point of 49.20.

What are you doing now

Investors need to be patient in the sideways market, waiting to see the direction in which major indices and leading stocks will break decisively. On Tuesday, the sideways market provided a “greatest hits” session, with some leading stocks falling, some reversing lower, some finding support, and some even making upward moves.

Wednesday's CPI inflation report may provide some clear direction for the market to move higher, but it may not. Earnings season is looming, with big markets, sectors and stocks likely to move up or down, or perhaps both.

For now, investors should work on their watch lists. Leading stocks are testing key support levels and forming bases across a range of sectors.

Read The Big Picture every day to stay on top of 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.

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