Dow Jones futures, as well as S&P 500 futures and Nasdaq futures, experienced modest declines on Wednesday morning.
The day was marked by significant events in the financial world, with Advanced Micro Devices (AMD) headlining overnight earnings and the Federal Reserve concluding its two-day meeting in the afternoon.
The stock market rally attempted to recover during the day, showing signs of improvement as major indexes reversed their morning declines.
Nvidia stock had initially dipped below recent lows but cut its losses. While market breadth looked better, it was evident that the downtrend had remained intact.
One of the notable highlights on Tuesday was Arista Networks (ANET), which surged towards record highs on the strength of its earnings after experiencing a tumble the previous week due to Meta Platforms (META) capital spending plans.
Pinterest (PINS) and Cameco (CCJ) also made significant gains after their earnings reports, and they both flashed buy signals.
Market Risks Continue: Tesla Rises, ELF Beauty Faces Earnings Uncertainty
However, it was acknowledged that risks in the market remained elevated.
Tesla (TSLA) saw a modest rise in its stock value as a jury found that Autopilot was not at fault in a fatal accident.
Conversely, ELF Beauty (ELF) experienced a substantial plunge, leading to its earnings announcement scheduled for Wednesday night. Meanwhile, Nvidia stock initially undercut recent lows but reduced its losses.
Dow Jones futures dipped by 0.3% compared to fair value, while S&P 500 futures slipped by 0.4%. Nasdaq 100 futures saw a decline of 0.4%. Notably, AMD stock is part of the Nasdaq 100 index.
Regarding the broader market indicators, the 10-year Treasury yield increased slightly to 4.9%, and crude oil futures registered a 2% climb.
It’s essential to remember that overnight fluctuations in Dow futures and other indices do not always mirror the subsequent regular stock market trading session.
AMD, a competitor to Nvidia (NVDA), reported better-than-expected third-quarter earnings and sales, albeit with weaker guidance. Still, the company’s bullish AI comments provided some optimism.
The AMD stock had fallen slightly early on Wednesday. On Tuesday, shares of AMD had risen by 2.4% to 98.50, although they remained below the 50-day and 200-day moving averages.
In contrast, Paycom Software (PAYC) surpassed earnings estimates but fell short on revenue and Q4 guidance, causing its stock to plunge by more than 30%.
Furthermore, an FDA advisory panel provided favorable feedback on the first-ever gene therapy treatment for sickle cell disease, developed by Crispr Therapeutics (CRSP) and Vertex Pharmaceuticals (VRTX).
Interestingly, the panel refrained from voting on whether to recommend the treatment. As a result, CRSP stock experienced a 9% surge early on Wednesday after being halted throughout Tuesday.
VRTX stock also rose 1.3% on Tuesday, reaching 362.11 and bouncing off the 50-day moving average.
Vertex stock is now near a 367 buy point, but its earnings are scheduled for next week.
In a significant legal development, Tesla (TSLA) managed to win the Autopilot lawsuit related to a fatal 2019 accident in Riverside County, California.
This marked the first of several cases concerning the electric vehicle company’s driver-assistance software. Despite the victory, TSLA stock remained below its 200-day moving average.
China’s electric vehicle manufacturers Li Auto (LI), XPeng (XPEV), and Nio (NIO) reported October deliveries, with Li Auto achieving a milestone by delivering over 40,000 vehicles for the first time.
XPeng’s deliveries also reached a new record, exceeding 20,000. Nio’s sales showed an improvement compared to September.
EV and battery giant BYD (BYDDF) reported an impressive 301,833 electric vehicle sales in October, marking its sixth consecutive monthly record. This included 165,505 passenger all-battery electric vehicles (BEVs).
Despite positive delivery figures, shares of Li Auto, Nio, XPeng, and BYD experienced a 3%-4% decline on Tuesday, along with other Chinese stocks, primarily due to weak economic data from China.
As the financial world awaited the Federal Reserve’s policy meeting announcement at 2 p.m. ET, with Fed Chief Jerome Powell’s speech scheduled for 2:30 p.m. ET, it was widely anticipated that there would be no rate hike on Wednesday.
Moreover, there were only modest odds of a rate increase in December. Fed policymakers, including some hawks, had emphasized that surging long-term Treasury yields had diminished the need for official rate hikes.
In light of these circumstances, it was expected that the Fed policy statement and Powell’s speech would reinforce the message that the central bank is inclined to leave the door open for further tightening while maintaining the current policy stance.
Source: Investor Business Daily