Dow futures drop as market rally stalls at key levels; Tesla expansion slip

Dow futures fell Thursday morning, while S&P 500 and Nasdaq futures fell modestly. The 10-year Treasury yield is at 4% again.

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Cryptocurrency financial company Silvergate Capital (SI) crashed on closure and liquidation plans. American Express (AXP) shareholder returns while MongoDB declined on guidance.

The stock market rally had a mixed session on Wednesday, with major indexes trading around major moving averages.

Chip stocks fared well, tho nvidia (NVDA), advanced micro devices (AMD), on semiconductors (on), Aehr Test Systems (AEHR) And homogeneous force (MPWR). But NVDA, AMD, Onsemi and Aehr test systems fell behind. The MPWR stock runs on a grip cup base.

Tesla (TSLA) Wednesday amid two new safety investigations in addition to an analyst rating downgrade. TSLA stock is down 10% since Investor Day on March 1, which didn’t have much news. Stocks continued to slide early Thursday.

SI stock has collapsed as the crypto bank plans to shut down. Database software maker MongoDB (mdb) reported late Wed. American Express (AXP) announced the buyback of new AXP shares and an increase in the dividend.

NVDA stock is running IBD Leaderboard. MPWR stock on defect 50And Big Cap 20 and a long-term IBD watchlist for leaders.

The video embedded in this article discussed the market movement and analyzed the Monolithic Power stock, inspiration (ORCL) and C3.ai (Amnesty International).

Dow jones futures today

Dow futures fell 0.1% against fair value. AXP stock provided a small boost to Dow futures. S&P 500 futures fell 0.3% and Nasdaq 100 futures fell 0.6%. TSLA stock weighed on S&P 500 and Nasdaq 100 futures, with NVDA stock also lower early Thursday.

The 10-year Treasury yield rose 4 basis points, to 4.01%.

The Labor Department will release its weekly unemployment claims data at 8:30 a.m. ET on Thursday, with the February jobs report due Friday morning.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live

Silvergate Capital to close

Hours later, the beleaguered Silvergate Capital said it would end operations and liquidate Silvergate Bank. Silvergate is one of the largest lenders to major crypto companies and facilitates transfers between exchanges and market makers. Stocks have been in a free fall over the past year as the financial architecture of cryptocurrencies collapsed. Last week, Silvergate said it would not be able to file a 10-K by the March 16 deadline.

SI stock is down nearly 40% in pre-market trading, after falling 5.8% to a new low of 4.91 on Wednesday. Silvergate crashed 57% in March due to a 10K deposit delay. SI stock peaked at 239.26 in November 2021.

signature bank (SBNY), which has been trying to cut cryptocurrency exposure after ramping up in previous years, fell 9% overnight. SBNY stock fell to a two-year low. Coinbase (currency) decreased by 4%. Coinbase said on March 2 that it has turned to Signature Bank to facilitate dollar transfers, away from Silvergate.

Bitcoin is down slightly on Silvergate Capital news.

Repurchase of AXP shares

AXP stock rose slightly overnight after the credit card giant announced it would buy up to 120 million shares, replacing approximately 36 million remaining in an earlier buyback plan. American Express also raised its quarterly dividend by 15%, to 60 cents a share. American Express fell 0.3% to 174.83 on Wednesday, again finding support around the 21-day line. AXP stock has a 182.25 cup buy point handle.

MDB stock fell 11% in extended action after MongoDB earnings beat perspectives but guidance disappointed. MongoDB stock rose 2.3% to 228.70 in Wednesday’s session, just below the 200-day line after bouncing from the 50-day line last Friday. The database software company is short consolidation with a buy potential of 248.25 points.

Stock market rise

The stock market traded up and down, and closed mixed.

The Dow Jones Industrial Average fell 0.2% in stock market trading Wednesday. The S&P 500 rose 0.1%, with ON and AMD stocks being the top performers. The Nasdaq Composite Index rose 0.4%. The small-cap Russell 2000 notched a partial gain.

US crude oil prices fell 1.2% to $76.66 a barrel. Copper futures rose 1.4%.

Treasury yields, Fed rate expectations

The 10-year Treasury yield settled at 3.97%, after falling to 3.9% on the day. The two-year Treasury yield increased by 5 basis points, to 5.06%. The yield of 6-month treasury bills gained 2 basis points to 5.31%.

The odds of a 50 basis point rate hike on March 22 have risen to 76%, from 70% on Tuesday and just 31% on Monday. Federal Reserve Chairman Jerome Powell testified on Tuesday that he expects interest rates to rise more than previously expected, and possibly at a “faster” pace, that hit stocks that day.

The Fed’s Beige Book report, released at 2 p.m. ET Wednesday, showed little or no growth in six of the 12 Fed districts over the past several weeks. Inflation remained widespread, although it was moderate.

Exchange Traded Funds

Among the ETFs, the Innovator IBD 50 ETF (fifty(up 0.8%, while the Innovator IBD Breakout Opportunities ETF)fit) rose 0.5%. iShares Expanded Technology and Software ETF (IGV) increased by 0.2%. VanEck Vectors Semiconductor Corporation (SMH) figured 2.6%. Nvidia stock is the #1 earner in SMH, with AMD also a top component. ON and Monolithic Power stocks are also in SMH.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark) and ARK Genomics ETF (ARKG) decreased by 0.1%. Tesla stock is a major holding across Ark Invest’s ETFs. Cathie Wood’s Ark also owns a lot of shares of COIN.

SPDR S&P Metals & Mining ETFs (XME) closed up 0.25%. US Global Gates Foundation ETF (Planes) rose by 0.45%. SPDR S&P Homebuilders ETF (XHB) increased by 1%. Energy Defined Fund SPDR ETF (xle(lost 1% and the Financial Select SPDR ETF)XLF) decreased by 0.4%. SPDR Health Care Sector Selection Fund (XLV) fell 0.5%.

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Tesla stock

Tesla stock fell 3% early Thursday.

The TSLA Index fell 3% to 182 on Wednesday, marking its lowest level in more than a month.

The National Highway Traffic Safety Administration has opened two new safety investigations into Tesla. One covers the steering wheels that are off on some 2023 Model Y crossovers due to a missing bolt that secures the wheel to the steering column. The investigation covers an estimated 120,000 Model Y vehicles.

NHTSA also announced a special investigation into Tesla’s fatal crash into a parked fire truck on February 18, saying it believes the Model S was powered by an automated driving system. The regulatory agency has a slew of ongoing Tesla crash investigations related to autopilot or full self-driving, including several crashes involving stationary emergency vehicles.

Berenberg downgraded Tesla stock to hold it from a buy, saying the stock price had rebounded to fair value. The analyst said Tesla’s price cuts will hit gross margins in the short term, but it still sees high margins in the long term.

As of Wednesday’s close, Tesla stock is down 10.2% since Investor Day on March 1. While the EV giant has confirmed plans for a factory in Mexico, it hasn’t made much progress on a future next-generation vehicle, presumably a low-cost electric vehicle.

Still, TSLA stock is down 16.4% from its February 16 high of 217.65, but is still up nearly 79% from its January 6 bear market low of 101.81.

Three factors drove Tesla’s big rally in early 2023. First, investors believed that price cuts in January would fuel a delivery boom. Secondly, high hopes for Tesla Investor Day news. Third, the broader growth-led market rally.

But Tesla is already resorting to deep additional discounts for additional delivery gains in the first quarter, while Investor Day failed to impress. The sliding and range-bound market since early February hasn’t helped either.

So, in that context, TSLA stock may have been resilient in holding the bulk of its early 2023 gains.

Tesla stock may be forming a bottom base, with a buy point above the 200-day line. This can include testing 50 day / 10 week streaks.

Tesla launched a Chinese electric car price war; Brutal battle ahead

Market rally analysis

The rise of the stock market is still closely linked to its moving averages.

The S&P 500 managed to close slightly higher, but just below the 50-day line after cutting through that key level on Tuesday. The Russell 2000 broke below the 50-day line on the day to reach its lowest levels since late January before rallying for a feeble advance

The Dow fell not far from its 2023 and 200-day lows.

The NASDAQ rose modestly but the resistance is at the 21-day line.

On Friday, the market rally appeared to be breaking out of a short-term trading range, but this week it has pulled back. More broadly, the major indices are in the lower half of a trading range that dates back to early February.

Blue-chip stocks performed better on Wednesday.

Nvidia, On Semiconductor, and chips were generally strong, providing support for the Nasdaq stock exchange along with apple (AAPL) earns. But buying signals in this sector are rare.

Arista Networks (network) to the edge of the purchase area while some software is running such as Fresh remains (NEWR) And fortinet (FTNT) gained ground within the consolidation that followed the gap.

Airline stocks kept rising, even though cruise lines took up water. Homebuilder stocks have held up remarkably well as treasury yields have risen.

Plenty of other names have faded along with the market, though the leaders haven’t suffered much damage.

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What are you doing now

The market is struggling higher around key levels again.

While blue chip stocks are outperforming, many of their recent purchases have had problems or no progress. Perhaps it is best to take a wait-and-see approach until the stock market rally shows renewed strength or declines lower.

While the S&P 500 and other indices are not far from paring their recent lows, a few good days is all the rally needs to look healthy again. So take this time to prepare your watchlists.

Read the big picture every day to stay in sync with market trend, leading stocks and sectors.

Please follow Ed Carson on Twitter at @employee For stock market updates and more.

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