Overnight, Dow Jones futures were down slightly, while S&P 500 futures and Nasdaq futures were down slightly. Microsoft (MSFT) and Meta Platform (META) beat third-quarter estimates, but their stocks fell in line with guidance.
Robinhood Markets (HOOD), Coinbase (COIN), MicroStrategy (MSTR), DoorDash (DASH), GoDaddy (GDDY), Ryan Specialty Holdings (RYAN) and more also posted notable post-close gains. .
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Nasdaq hits new highs again. Reddit, Alphabet, and Featured Restaurants
Wednesday’s stock market rally edged lower, with the Nasdaq reversing its all-time high even as Google parent Alphabet (GOOGL) led a big profit move.
Nvidia, Meta, and DoorDash stocks are listed on the IBD Leaderboard. Nvidia stock is listed on SwingTrader. Microsoft stock is on the IBD Long-Term Leaders List. Nvidia, Meta, and Ryan stocks are included in the IBD 50. Meta stock and Robinhood are included in the IBD Big Cap 20.
Dow Jones futures today
Dow Jones futures, of which Microsoft is a component of the Dow, were slightly lower than fair value. S&P 500 futures fell 0.3% and Nasdaq 100 futures fell 0.45%. Microsoft and Meta are major stocks in the S&P 500 and Nasdaq.
The yield on the 10-year US Treasury note rose slightly to 4.29%.
China’s official manufacturing economy index rose 0.3 points to 50.1 in October, surpassing the break-even level of 50 for the first time since April. The prediction was 49.9.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
Stock market gains subsided toward the close, with the Nasdaq leading the way lower after hitting a new intraday high.
In stock market trading on Wednesday, the Dow Jones Industrial Average fell 0.2%, once again hitting the 21-day resistance line. The S&P 500 index fell 0.3%. The Nasdaq Composite fell 0.6%. The small-cap Russell 2000 fell 0.1% and remains above its 21-day line.
With many major stocks soaring on earnings, Reddit (RDDT) soared 42% and Garmin (GRMN) trailed by 23%. However, there were many losers, with Eli Lilly (LLY) plummeting 13%. Nvidia rival Advanced Micro Devices (AMD) plunged nearly 11%.
US crude oil prices rose 2.1% to $68.61 per barrel.
The yield on the 10-year Treasury note fell 1 basis point to 4.26%.
ETF
The iShares Expanded High-Tech Software Sector ETF (IGV) fell 0.2%, with Microsoft stock being IGV’s main holding. The VanEck Vectors Semiconductor ETF (SMH) fell 2.4%, with AMD leading the decline. The ARK Innovation ETF (ARKK) fell 0.4%.
The SPDR S&P Metals Mining ETF (XME) fell 1.7%. SPDR S&P Home Builders ETF (XHB), Healthcare Select Sector SPDR Fund (XLV), and Industrial Select Sector SPDR Fund (XLI) fell 0.2%.
Financial Select SPDR ETF (XLF) rose 0.45%.
Timing the Market with IBD’s ETF Market Strategy
Microsoft, Meta Revenue
Microsoft’s earnings and sales exceeded its first-quarter guidance, with Azure cloud computing revenue growth beating expectations at 33%.
The Dow tech giant delivered results slightly below its fiscal second quarter views. Microsoft said it plans $80 billion in capital spending in the current fiscal year 2025, which began in July. This is up from $49 billion in fiscal year 2024. This could hurt Microsoft’s profits, but it’s good news for its AI hardware efforts.
Microsoft stock fell steadily in extended trading. In regular trading on Wednesday, Google’s cloud-driven earnings were strong, pushing the stock up 0.1% to 433.53. MSFT stock is moving away from its 21-day, 50-day, and 200-day lines. The traditional consolidation buy point is 468.35, with 441.85 providing early entry.
But Microsoft is lagging for much of 2024.
Meta earnings were easily better, and earnings were slightly better. The number of daily active users was slightly lower than the number of views. The parent company of Facebook and Instagram saw its fourth quarter revenue increase slightly at the midpoint. Meta lowered its full-year spending slightly, but raised some capital expenditures and predicted “significant increases in capital expenditures in 2025.”
Meta stock fell slightly in overnight trading. On Wednesday, the stock fell 0.25% to 591.80, just below the high of a short-term consolidation.
Earnings and guidance from Microsoft and Meta will be key for Nvidia (NVDA) and other AI hardware efforts.
Nvidia stock fell slightly in late trading. Shares fell 1.4% to 139.34 on Wednesday, just below the buy point of 140.76, following AMD’s weak sales outlook.
Arista Networks (ANET), which boasts Microsoft and Meta as major customers, lost some parts overnight. The stock fell 1.4% on Wednesday, holding its 21-day line.
Robinhood, crypto earnings
Cryptocurrency trading app Robinhood, cryptocurrency exchange Coinbase, and Bitcoin investment firm MicroStrategy all reported third-quarter results that were lower than expected. MicroStrategy, which has borrowed heavily to buy Bitcoin, announced plans to raise $42 billion in equity and debt to buy more Bitcoin.
Robinhood stock plummeted, Coinbase fell sharply, and MicroStrategy fell. COIN stock is moving toward a buy point.
Other income
Ryan Specialty stock and Go Daddy are almost unchanged. Door dash rose little by little.
Lemonade (LMND) soared after better-than-expected results, and so did another emerging insurance company, Root (ROOT). Telecommunications software maker Twilio (TWLO) and Sprouts Farmers Market (SFM) also skyrocketed overnight.
Early Thursday morning, SharkNinja (SN), Uber Technologies (UBER), and Roblox (RBLX) are scheduled to report earnings.
what to do now
So far, the stock market rally has helped us handle earnings season well, but there’s a lot more to come. With announcements from Amazon.com (AMZN) and Apple (AAPL) scheduled for Thursday night, we’ll see how the market reacts to Microsoft and Meta on Thursday. Friday’s jobs report will be released along with election day announcements on November 5th and the Federal Reserve’s meeting on November 7th.
Other than earnings differentials, there haven’t been many buying opportunities lately, with several companies reporting earnings in the next few days.
Therefore, investors don’t need to do much apart from incremental purchases and portfolio adjustments. But stay engaged and have your watchlist ready.
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