Dow Jones Futures Fall After Surging Nvidia Masks Market Weakness; Cava Slides Late

Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. Cava Group (CAVA) headlined earnings after the close, with Abercrombie & Fitch (ANF) and Viking Holdings (VIK) due early Wednesday.




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The stock market rally had another mixed session Tuesday, with Nvidia (NVDA) continuing to run higher, lifting the Nasdaq. But the Dow Jones fell to a key support level amid weak breadth.

AI chipmaker Arm Holdings (ARM), wings eatery Wingstop (WING) and Brazilian fintech Nu Holdings (NU) flashed buy signals Tuesday.

American Airlines (AAL) cut its outlook late Tuesday. American Air tumbled while other carriers fell.

Nvidia and Cava stock are on IBD Leaderboard. WING stock is on SwingTrader. Nvidia, Wingstop and ARM stock are on the IBD 50. Nvidia stock is on the IBD Big Cap 20.

The video embedded in the article discusses Tuesday’s market action and analyzes Arm Holdings, Wingstop stock and Celsius Holdings (CELH).

Dow Jones Futures Today

Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures lost 0.2% and Nasdaq 100 futures declined 0.2%.

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


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Earnings

Cava earnings were better than expected, with same-store sales growth slowing significantly but beating views at 2.3%. Guest traffic fell slightly though. Cava stock fell modestly in overnight action after initially selling off. Shares dipped 0.6% to 82.40 on Tuesday, reversing lower from a fresh all-time high intraday.

Abercrombie & Fitch earnings are due before the open. ANF stock rose 1.5% to 152.39 on Wednesday, modestly extended from a 140.28 consolidation buy point.

Viking Holdings reports earnings for the first time since the cruise line operator came public a month ago. VIK stock popped 3.1% to 30.60 on Tuesday, hitting a record high amid a flurry of mostly positive analyst initiations on the recent IPO.

Stock Market Rally

The stock market rally had another mixed session Tuesday, with the Nasdaq topping the 17,000 level for the first time while the Dow Jones sank to the 50-day line.

The Dow Jones Industrial Average fell 0.5% in Tuesday’s stock market trading, with some financial and health care components weighing on blue chips. The S&P 500 index rose a fraction. The Nasdaq composite climbed 0.6%.

Losers outpaced decliners by a solid margin.

The small-cap Russell 2000 fell 0.1%.

The Invesco S&P 500 Equal Weight ETF (RSP) sank 0.7%, fractionally below the 50-day. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) slumped 0.8%, badly lagging the Nasdaq 100’s 0.4% advance.

On the plus side, energy and commodity stocks bounced back after significant losses last week, buoyed by higher underlying prices.

U.S. crude oil prices rallied 2.7% to $79.83 a barrel. Copper futures bounced 2%.

The 10-year Treasury yield popped 7 basis points to 4.54%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) closed fractionally lower after briefly hitting a fresh 52-week high. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.7%. The VanEck Vectors Semiconductor ETF (SMH) jumped 2.3%, with Nvidia stock the dominant holding.

Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) slid 0.8% and ARK Genomics (ARKG) advanced 0.2%.

The SPDR S&P Metals & Mining ETF (XME) tacked on 1.5% while the Energy Select SPDR ETF (XLE) climbed 1%.

But the SPDR S&P Homebuilders ETF (XHB) gave up 1.4%. The Health Care Select Sector SPDR Fund (XLV) and Industrial Select Sector SPDR Fund (XLI) both sank 1.2%. The Financial Select SPDR ETF (XLF) retreated 1.1%.


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Nvidia Stock

Nvidia stock jumped 7.1% to 1,140.59, gapping up to yet another record high. Shares soared 15.1% last week on booming earnings and guidance. NVDA stock is now greatly extended. Nvidia’s market cap is closing in on $3 trillion, hitting $2.847 trillion on Tuesday.

Stocks In Buy Zones

Arm stock spiked 9% to 124,94, clearly moving above the 50-day line, which had served as resistance for the past two weeks. The wireless chip designer, seen as an AI play, also broke a trendline. Those both offered buy signals. Arm stock is starting to building the right side of what would be deep base.

Wingstop stock rose 1.5% to 389.60, bouncing from the 21-day moving average and breaking a short trendline, while not that far from the 50-day line. Shares are still in range of a prior consolidation with a 379 entry.

Nu Holdings stock popped 3.8% to 12.18, bouncing from around the 50-day line and breaking a short trendline. That offers a fresh entry into the Brazilian fintech, which has a 12.38 consolidation buy point.

What To Do Now

There are stocks to buy and some winners are still moving higher, but market leadership has narrowed somewhat. So don’t assume that just because an Nvidia-fueled Nasdaq is hitting new highs that your stocks are sure to advance.

Still, a few more stocks flashed buy signals with many others setting up. Investors could choose to take advantage, especially if their exposure remains modest. But continue to do so gradually and be ready to step back if the market falters.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on  Threads at @edcarson1971 and X/Twitter at @IBD_ECarson  for stock market updates and more.

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