Jala News – Stock Market Rebounds Despite Treasury Yield Influence
The stock market showed signs of resilience on Tuesday, with the Nasdaq leading the way in a rebound. Futures for the Dow Jones, S&P 500, and Nasdaq remained relatively unchanged overnight. This positive momentum was fueled by a decrease in the 10-year Treasury yield.
One company that stood out during this rally was Tesla. Despite facing negative news, the electric vehicle manufacturer made a bullish move on Wednesday. This suggests that investor confidence in the company remains strong.
However, the stock market rally has yet to see a follow-through day. This is due to the continued influence of Treasury yields. Stocks like Tesla, Meta Platforms, and Google parent Alphabet are still performing well and are trading around buy points. Other stocks, including Arista Networks and Synopsys, also saw gains and approached possible buy points.
In a significant development, Tesla stock joined IBD Leaderboard and SwingTrader on Wednesday. This further adds to the company’s attractiveness for investors.
Looking at futures, Dow Jones futures edged lower, while S&P 500 futures remained relatively unchanged and Nasdaq 100 futures saw a slight increase. Meanwhile, the 10-year Treasury bond yield decreased slightly to 4.71%.
The stock market rally attempt continued on Wednesday, with the Nasdaq having a strong session. The Dow Jones Industrial Average rose by 0.4%, the S&P 500 index climbed by 0.8%, and the Nasdaq composite jumped by 1.35%.
Market breadth was modestly positive after weak readings on Wednesday. The small-cap Russell 2000 closed essentially flat after erasing solid intraday losses.
In terms of treasury yields, the 10-year yield increased by nearly 7 basis points to 4.735%, but had fallen over the prior two days. U.S. crude oil prices experienced a significant drop of 5.6% to $84.22 a barrel. Furthermore, gasoline futures plunged by 6.9% to the lowest level since December 2022.
While the Nasdaq and S&P 500 saw some gains, they were just inside days after Tuesday’s sell-off. The Nasdaq has been in a stock market rally attempt for six days and could stage a follow-through day soon. On the other hand, the S&P 500 and Dow Jones just began new rally attempts after undercutting recent lows earlier in the week.
Although some tech stocks are holding up, most recent leading stocks and sectors are struggling, especially energy stocks. Among growth ETFs, the iShares Expanded Tech-Software Sector ETF and VanEck Vectors Semiconductor ETF saw gains, while other ETFs had mixed performance.
In terms of individual stocks, Tesla experienced an aggressive buy signal, jumping 5.9% to $261.16 and moving above the 50-day line. Meta stock rose 1.5% to $305.58, reclaiming its position above the 50-day line. Google stock climbed 2.1% to $1,352.24, showing a rebound from the 50-day line. Arista stock edged up 0.6% to $186.03, while Synopsys stock gained 2.35% to $461.32.
Investors are advised to exercise caution as the stock market is still influenced by the 10-year Treasury yield. However, Tesla and Google stocks provide potential buying opportunities if the market rally continues. Investors should also keep an eye on relative winners like Meta stock, Arista Networks, and Synopsys.
For more updates on the stock market, follow Ed Carson on Twitter at @IBD_ECarson.
