Dow Jones futures fell slightly on Friday morning, along with S&P 500 and Nasdaq futures.
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The stock market rally pulled back on Thursday amid earnings reports and weak economic data, even as major indexes held key levels and trimmed losses slightly towards the close.
Tesla (TSLA) sold off as CEO Elon Musk signaled he’s willing to see profit margins fall much more after price cuts hit gross margins in the first quarter. Price cuts continued in April, but Tesla reversed tack on Friday and slightly increased the prices of the Model S and X.
Cathie Wood’s Ark Invest remains a super bull on Tesla stock, forecasting a price of $2,000 in 2027. Ark ETFs also bought 256,000 Tesla shares.
In the meantime, Sands of Las Vegas (LVS), Iridium (IRDM) e Search Lam (LRCX) has issued buy signals on earnings.
early friday, Freeport-McMoRan (FCX), SLB extension (SLB), Procter & Gamble (PG) and Healthcare HCA (HCA) reports earnings. FCX, SLB and P&G stock are near buy points, while HCA stock is in a buy zone.
Meanwhile, Chilean President Gabriel Boric on Thursday night said he would nationalize the country’s lithium industry. This would transfer Chile’s lithium operations from SQM (SQM), Albemarle (ALB) and others to a state-owned mining company. SQM and Albemarle shares fell sharply early Friday as base metal miners Rio Tinto (RIO) e CV (BHP) also decreased.
LVS shares are in the IBD ranking. LRCX stock is on the IBD Big Cap 20.
Dow Jones Futures today
Dow Jones futures fell 0.2% from fair value. S&P 500 futures fell 0.25% and Nasdaq 100 futures lost 0.5%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session of the stock market.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock market rebound
The stock market rally saw modest to solid losses, with major indexes trimming session lows in recent minutes.
The Dow Jones Industrial Average fell 0.3% in stock trading on Thursday. The S&P 500 index fell 0.6% with Lam Research among the best performers while Tesla stock was worst on Thursday. The Nasdaq Composite fell 0.8%. The small-cap Russell 2000 was down 0.5%.
US crude prices fell 2.4% to $77.29 a barrel.
The yield on the 10-year Treasury fell 5 basis points to 3.55%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.1%. The iShares Expanded Tech-Software Sector (IGV) ETF was down 0.8%. VanEck Vettori Semiconductor (SMH) ETF was up 0.1%, with stock LRCX a notable holding.
Reflecting the stock’s more speculative stories, ARK Innovation ETF (ARKK) is down 3.8% and ARK Genomics ETF (ARKG) is down 2.9%. Tesla shares are a major holding in Ark Invest ETFs. On Thursday, Ark funds bought 256,023 TSLA shares. It is worth $41.73 million as of Thursday’s close. Cathie Wood often buys or adds stocks when they’re plummeting.
SPDR S&P Metals & Mining ETF (XME) lost 1.5% and Global X US Infrastructure Development ETF (PAVE) was up 0.2%. The US Global Jets ETF (JETS) fell 1.7%. SPDR S&P Homebuilders ETF (XHB) gained 0.7%. Energy Select SPDR ETF (XLE) fell 0.9% and Health Care Select Sector SPDR Fund (XLV) fell 0.4%
The SPDR Financial Select ETF (XLF) fell 0.3%. The SPDR S&P Regional Banking (KRE) ETF fell 1.9% on some mixed regional bank results, but that followed Wednesday’s 3.9% jump.
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Tesla shares
Tesla stock tumbled 9.75% to 162.99 on Thursday, trimming its base to its worst levels since late January. Gross margins fell more than expected in the first quarter due to multiple price cuts. Price cuts continued in April, with Elon Musk saying he was willing to see margins squeeze further to ramp up production.
However, on Friday, Tesla raised U.S. prices for the Model S and X Plaid versions by $3,000, to $107,490. It raised the Model X base price by 2.6% to $97,490 and the Model S price by 2.9% to $87,490.
TSLA shares rallied slightly in pre-market trading.
But set aside what you think about Tesla electric vehicles or the company.
Right now, TSLA stock looks broken, below all of its moving averages. If you come across a Tesla stock chart as you scroll through the screens, click the space bar and move on for now. If you want, set up an early warning so if TSLA starts to recover, you’ll keep an eye on it.
Cathie Wood’s TSLA price target
Along with Ark Invest’s new Tesla purchases, Cathie Wood’s outfit also announced a new price target. TSLA shares are projected to reach $2,000 in 2027. A year ago, Ark forecast a split-adjusted TSLA price of 1,533 in 2026. Cathie Wood’s Ark sees Tesla sales at $10.3 million to $20.7 million , with huge revenues from autonomous driving.
Ark Invest has consistently forecast EV sales far above actual results, as well as making bold, Musk-style predictions for autonomous driving and robotaxis that have yet to materialize.
Actions in the shopping zones
Las Vegas Sands made strong first-quarter earnings with revenue more than doubling as the end of Covid restrictions fueled a Macau boom. LVS shares rose 3.7% to 61.53, surpassing a buy point of 60.40 cup with handle. Wynn resorts (WYNN) and MGM Resort (MGM) issued buy signals on Thursday but trimmed or erased gains. Melco Resort (MLCO) broke out.
Iridium reported a 300% EPS increase in the first quarter, while revenue also increased. IRDM shares rose 11% to 65.03, briefly outpacing a fixed-base buy point of 65.51, according to MarketSmith. Better entries may have been earlier in the session as Iridium broke a downtrend and cleared some short-term levels. IRDM stock is technically usable here, but it looks somewhat extended from the 50 day line. Stocks have had a recent history of rallying for a couple of days and then retreating, creating a new consolidation. Investors may want to see if Iridium hangs near the highs for a few days.
Lam Research reported mixed results and weak indications, but investors may have feared much worse. Also, Taiwan semiconductor (TSM) did not cut capital spending plans on Thursday despite reports that the chip foundry giant may. LRCX stock rose 7.2% to 526.52, bouncing above the 50-day line and breaking a declining trend line. The shares briefly broke above short-term resistance around 533. LRCX stock still has a flat-base buy point of 548.95.
Analysis of market rallies
The stock market rally lost ground on Thursday. The Nasdaq came close to testing its 21-day line and the 12,000 level, but has held those levels for now. The S&P 500 and the Dow Jones are still above their 21-day lines.
Stepping back, the major indices continue to trade tightly in a range. They are all somewhere between the 2023 highs and the 50-day moving average.
Tesla stock was a notable drag on the S&P 500 and the Nasdaq composite. The EV giant’s earnings and Musk’s comments triggered heavy losses in the auto sector.
But the sale was widespread. The losers significantly outnumbered the winners on Thursday.
Home builders were strong DR Horton (DHI), while gaming stock was a winner thanks to Las Vegas Sands. Taiwan Semiconductor and Lam Research gave some chip equipment giants a boost, but many chip names were either lackluster or lagging behind. Medical products are the leader, although many gave up on Thursday.
Earnings and guidance are dominating the headlines, but signs of a recession are growing.
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what to do now
If the market rally picks up steam, with major indices and major stocks gaining ground in an environment of sustained market breadth, there will be plenty of buying opportunities. But that’s not the case right now.
While the indices have been relatively tight, there has been greater volatility for various sectors or individual stocks.
Some stocks that flash buy signals work, others work for a few days or a few hours.
Exposure should be modest, with your specific level largely depending on the stocks you hold.
Earnings season will add to the uncertainty, with next week’s megacaps bringing hundreds of reports. The market could make a “decisive” move up or down, then reverse course the next day.
Stay busy and flexible. Have your watchlists and exit plans ready.
Read The Big Picture daily to stay abreast of market direction and major stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarsonfor stock market updates and more.
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