Dow Jones futures rallied Wednesday night alongside S&P 500 and Nasdaq futures. The rally in the stock market marked the second day in a row as the Treasury detailed Biden’s plans to raise taxes.
But Apple stock retraced its 50-day moving average, while Microsoft (MSFT), Amazon.com (AMZN), Facebook (FB), Nvidia (NVDA) and Google-parent Alphabet (GOOGL).
Apple shares rose 1.3% to 127.90, rebuilding their 50-day line. Amazon shares were up 1.7%, rallying on the right side of the consolidation after crossing their 50-day border on Monday. Nvidia shares were up 2%, climbing to the right side of the bottom of the cup after surging above its 50-day mark last week. Microsoft shares are up 0.8%, Google is up 1.35% and Facebook shares are up 2.2%, all still in buying range after Monday’s breakout.
Meanwhile, Tesla shares, which have watched upward resistance in recent days, are back in a key support area. Tesla (TSLA) is further postponing deliveries of its refreshed Model S and Model X after failing to produce any of the luxury EVs in the first quarter.
The rally in the stock market showed weak dynamics of the main indices, some support was provided by tech giants. However, the small-cap Russell 2000 cut key levels.
Microsoft, Nvidia and Google are on the IBD leaderboard. GOOGL shares are listed on SwingTrader. Microsoft shares are included in IBD’s long-term leaderboard. Tesla is listed at IBD 50.
Biden’s tax plan details
The Treasury Department released more details on Biden’s tax plan. President Joe Biden continues to call for an increase in the federal income tax rate from 21% to 28%. But the proposed 15% minimum corporate tax to ensure that companies like Amazon pay taxes will apply to companies with more than $ 2 billion in annual revenue, up from $ 100 million. This will limit the number of affected companies to just 40, according to the Ministry of Finance, down from 1,100 below the $ 100 million threshold.
Meanwhile, President Biden said Wednesday that he is willing to compromise on a corporate tax increase as Senator Joe Manchin, DW.Va. and many companies have objected.
Still, Wall Street could move from raising prices from Biden’s new $ 2.25 trillion spending plan to calculating the cost of raising taxes on corporate income. In addition, more attention is paid to the relatively small share of infrastructure spending in terms of infrastructure.
FRS meeting minutes emphasize that it is impossible to tighten
Federal Reserve officials said it will take “some time” before they begin lifting aggressive monetary measures to bolster the economy, and will communicate any possible steps ahead of time. This is according to the recently published minutes of the March Fed meeting. This is what Fed Chairman Jerome Powell and most politicians have been talking about, even as the economic recovery is gaining momentum.
Dow Jones Futures Today
Dow Jones futures were up from fair value. S&P 500 futures were up 0.1% while Nasdaq 100 futures were up 0.1%.
The yield on the 10-year Treasury bond rose to 1.68% at the close of trading.
Remember that overnight activity in Dow futures and elsewhere does not necessarily mean actual trading in the next regular stock market session.
Join IBD experts who analyze trending stocks in the stock market rally at IBD Live.
Coronavirus News
The number of coronavirus cases worldwide has reached 133.59 million. Deaths from Covid-19 have exceeded 2.89 million.
The number of coronavirus cases in the United States has reached 31.62 million, and the number of deaths has exceeded 570,000.
Stock market rally
The rally in the stock market was marked by another calm session, at least outside of small caps.
The Dow Jones Industrial Average rose marginally in trading on the stock market on Wednesday. The S&P 500 is up 0.15%. The Nasdaq composite index fell 0.1%. The Nasdaq 100 climbed 0.3% to close at record highs.
Apple and Microsoft shares are both a component of the Dow Jones. It also includes S&P 500 and Nasdaq stocks, as well as Amazon, Facebook, Google and Nvidia stocks – and Tesla.
But the little hats had a harder time. The Russell 2000 Index fell 1.6%, below its 21-day and 50-day moving averages.
Leading stocks were also down.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.2% and the Innovator IBD Breakout Opportunities (BOUT) ETF fell 2.1%. The iShares Expanded Tech-Software Sector ETF (IGV) ETF fell 0.2%, with MSFT taking the lead among IGVs. The VanEck Vectors Semiconductor ETF (SMH) was down 0.2%. Nvidia stock is a key component of SMH.
SPDR S&P Metals & Mining ETF (XME) fell 0.8%. Global X US Infrastructure Development ETF (PAVE) and US Global Jets ETF (JETS) both lost 1%.
ARK Innovation ETF (ARKK) was down 3.4% and ARK Genomics ETF (ARKG), reflecting more speculative stocks. Tesla Stock is the largest holding company among ARK Investments ETFs.
Tesla Stock
Tesla shares fell 3% to 670.97, closing just above the 21-day exponential moving average. Tesla jumped above the 21-day mark on Monday but ran into resistance at its 10-week line and just below short-term peaks in March.
People who ordered a refreshed Model S or X earlier this year are seeing delivery times have been pushed back from April-May to May-July. In late January, CEO Elon Musk said the refreshed Model and X were in production, with deliveries of the new S sedan to begin in February. But there were no new Model S or X cars in the first quarter.
After the closure, CNBC reported that Tesla reimbursed customers for double bills on electric vehicle purchases last month. He sent an apology email with $ 200 in a Tesla online store account.
Although TSLA stock tested its 21-day maturity, the specs remained largely unchanged. One day the electric car giant will test or surpass recent highs. On the other hand, Tesla stock is not about actually looking strong.
However, Tesla outperformed China’s electric vehicle competitors on Wednesday. Nio (NIO) lost 6.8% and Xpeng (XPEV) 7.9%. Lee Auto (LI), which announced plans to place $ 750 million in convertible debt, fell 13%.
Market rally analysis
The rally in the stock market continued for the second session in a row. After several days of solid gains, it’s okay for major indices and major stocks to digest the gains.
Stocks can use pause to form handles on their bottoms or consolidate around recent buy points. Indeed, the Nasdaq and Nasdaq 100 seem to form handles. The Russell 2000 pullback below key levels has not been large, although it is still in the middle of its recent range.
Leading stocks have declined overall, but still look in good shape.
Market leadership remains broad, but specific winners change every few days. Right now, the tech titans are taking the lead after months of consolidation. According to MarketSmith analysis, shares of Microsoft, Google and Facebook are at all-time highs and are still in the buy zone. Amazon and Nvidia stocks are close to buying points, while Apple stocks have some work to do.
Don’t buy advanced. You may have gotten away with this during the strong rally in April-September, but in the current climate, stocks may see big pullbacks.
Don’t get hung up on a specific group or segment of the market. Take advantage of the broad market rally to make profits while limiting the risk associated with stocks or sectors.
Read the big picture every day to stay on top of market trends and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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