Dow Jones futures rose slightly on Wednesday morning, as did S&P 500 and Nasdaq futures. The June CPI Inflation Report is available before the opening.
X
The stock market rally saw decent gains on the S&P 500 and Nasdaq on Tuesday. The rest of the market was even better, with a number of exploitable stocks.
Salesforce.com (CRM) will raise prices for the first time in seven years. This sent CRM stocks into a buy zone and likely gave several other software names a boost. Datadog (DDOG), Dynatrace (DT), Procore Technologies (PCOR) and HubSpot (HUBS) broke out or issued buy signals.
ROKU stock broke mightily as Roku (ROKU) unveiled an alliance with Shopify (SHOP). caterpillar (CAT) and United Rentals (URI) also broke, while Boeing (BA) offered early entry. Expedia (EXPE) cleared a traditional point of purchase, while Reserve credits (BKNG) is liable to prosecution.
Both DT and HubSpot stocks are on the IBD ranking. CAT and Boeing stocks were added to SwingTrader on Tuesday, joining Dynatrace. URI stocks are on IBD 50. HubSpot, Dynatrace, United Rentals and DDOG stocks are on IBD Big Cap 20.
Caterpillar was the IBD stock of the day on Tuesday.
The video embedded in the article looked at Tuesday’s market action and reviewed CRM, Caterpillar and Booking stocks.
CPI Inflation Report
The Department of Labor will release the consumer price index for June at 8:30 a.m. ET. Economists expect the headline CPI to rise 0.3%, with the CPI inflation rate falling to 3.1% from 4% in May. Core CPI is expected to rise 0.3% from May, with the core CPI inflation rate dropping to 5% from 5.3%.
Dow Jones Futures Today
Dow Jones futures were up 0.1% from fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.2%.
The 10-year Treasury yield fell 4 basis points to 3.94%.
The CPI inflation report is sure to rock Dow Jones futures and Treasury yields shortly before the open.
Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.
Join the experts at IBD as they analyze actionable stocks in the stock market rally on IBD Live
Stock market rally
The stock market rally saw small gains on the Nasdaq and S&P 500 masking broad and solid gains elsewhere for a second consecutive session.
The S&P 500 index rose 0.7%. The Nasdaq composite rose 0.55%. Meanwhile, the Dow Jones Industrial Average climbed 0.9% in Tuesday’s trading, helped by Caterpillar, Boeing and CRM stocks. The small-cap Russell 2000 climbed 1% to a four-month high.
The Invesco S&P 500 Equal Weight (RSP) ETF climbed 1.1% to its best levels since February.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.8% after Monday’s 1.8% jump, hitting a new 14-month high.
The advances beat the decliners by 3 to 1 on the NYSE and nearly 2 to 1 on the Nasdaq. New highs dominated new lows.
U.S. crude oil prices jumped 2.5% to $74.83 a barrel, the highest close since May 1.
The 10-year Treasury yield fell 3 basis points to 3.98%, falling even further from 2023 highs. The US dollar fell for a fourth straight session, hitting the lowest levels since mid-May .
AND F
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) lost a fraction, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1.5%. The CRM stock is a major holding of IGV, with Datadog, Dynatrace, HubSpot and Procore also in the ETF. ETF VanEck Vectors Semiconductor (SMH) edged up 0.1%.
Mirroring stocks with more speculative histories, ETF ARK Innovation (ARKK) rose 1.3% and ARK Genomics (ARKG) jumped 3.7%. ROKU is one of the top 10 stocks among Ark Invest funds.
The SPDR S&P Metals & Mining ETF (XME) rose 0.6%. The Global X US Infrastructure Development ETF (PAVE) climbed 1%, with URI stock a key holding. US Global Jets (JETS) rose 0.6%. SPDR S&P Homebuilders (XHB) jumped 1.3%. The Energy Select SPDR ETF (XLE) jumped 2.2% and the Health Care Select Sector SPDR Fund (XLV) edged higher.
The SPDR Industrial Select Sector (XLI) fund rose 1.2%. Boeing and CAT stocks are XLI’s top holdings, with United Rentals also in the ETF.
The Financial Select SPDR ETF (XLF) rose 1.2%. The SPDR S&P Regional Banking ETF (KRE) gained 1.3%.
Five best Chinese stocks to watch now
Stocks in shopping areas
CRM stock rose 3.9% to 221.17, breaking a downtrend line and clearing short-term levels, while remaining within the range of the 50-day line. Salesforce stock has a fixed base buy point of 225, according to MarketSmith analysis. Salesforce said it would raise software prices by 9% in August, the Dow Jones giant’s first list price increase in seven years.
DDOG jumped 3.5% to 104.98, clearing a buy point of 103.80 after flashing early entry on Monday. Point of purchase is for a cup base with handle dating back 11 months. Investors might view the handle as its own flat base above a lower base that began in mid-February.
DT stock gained 4.2% to 54.97, off a flat-based buy point of 52.99 that is part of a basis-to-basis formation. Monday’s 3.2% pop offered early entry.
HUBS stock climbed 1.9% to 540.21, clearing a consolidation buy point of 535.12 after testing the 10-week line on July 16
PCOR stock jumped 5.7% to 68.99, clearing a buy point of 68.68, with early entry available in the morning.
ROKU stock jumped 11% to 75.43, closing just below a cup-with-handle buy point of 75.45 in massive volume. Investors could have seen an early entry on Monday or Tuesday morning. At this point, ROKU’s stock is 23.5% above its 50-day line. Roku’s new Shopify partnership will allow users to buy directly from Shopify merchants through their TV. SHOP’s stock jumped 2%, continuing to bounce off the 50-day line but perhaps not quite actionable.
CAT stock rose 1.6% to 252.85, clearing a buy point of 250.39 cup with handle.
URI stock rose 2.8% to 457.32, topping an entry of 450.65 cup with handle on a weekly chart.
BA stock jumped 2.55% to 218.76 in above-average volume, bouncing near the 21-day and 10-week lines in above-average volume. A June 12 breakout failed, but Boeing is recovering. Investors can use 223.91 as the official buy point.
EXPE stock climbed 2.3% to 116.96, surpassing a buy point of 114.37 cup with handle.
BKNG stock rose 2% to 2,783.40, building on Monday’s 3.5% rebound from the 50-day line. Stocks hit near-term highs, offering early entry. Shares briefly rose above a fixed-base buy point of 2,786.85 intraday. The reservation stock is seen as a winner in the upcoming Nasdaq 100 special rebalancing.
Market rally analysis
The Nasdaq and megacaps moving sideways, or at least lagging, as market breadth improves and leadership develops seems almost ideal.
The Nasdaq is still 5.7% above its 50-day line. It’s not extended, but it wouldn’t take much to get there. On the other hand, a 21-day line test might be constructive.
Software and industrial names were the big winners on Tuesday. Travel also continues to do well, as do home furnishings and a growing number of oilfield service providers, drillers and machinery companies.
Chips had a tough session, especially semiconductor equipment makers.
Time the Market with IBD’s ETF Market Strategy
What to do now
After some rigged heads last week, a number of leaders – such as Dynatrace, Datadog and stock CRM – are making more compelling moves this week. This reflects the strength of the market, with software that stands out.
This week’s action shows why investors should listen to market signals and take advantage of buying opportunities in a healthy uptrend. But last week’s counterfeits are why investors shouldn’t increase their exposure too quickly in a single day and be prepared to take a step back if the new buys don’t work out.
Wednesday’s inflation report could upend recent gains from recent winners like Roku, Caterpillar and HubSpot.
Your watchlists should swell in recent weeks, with varying sector names.
Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MIGHT ALSO LIKE:
Why This IBD Tool Simplifies Finding Best Stocks
Catch the next big winning stock with MarketSmith
Best Growth Stocks to Buy and Watch
IBD Digital: Unlock IBD’s premium stock listings, tools and analysis today
Tesla vs. BYD: The EV giants are vying for the crown, but what’s the best buy?