Dow Jones futures were little changed Tuesday night, along with S&P 500 futures and Nasdaq futures, with Treasury yields continuing to climb overnight after big gains Tuesday. The stock market rally continued to move toward record highs Tuesday despite rising interest rates. Apple (AAPL) helped lead the broad advance, while Bitcoin neared record highs as a Bitcoin futures ETF debuted.
Netflix (NFLX), Intuitive Surgical (ISRG) and United Airlines (UAL) reported earnings after the close. Chip-equipment giant ASML (ASML) reports earnings very early Wednesday, with peer Lam Research (LRCX) after the close.
NFLX stock fell slightly despite Netflix subscriber growth and guidance beating forecasts. ISRG stock dipped after the robotic-surgical systems maker narrowly topped views.
ASML stock rose 1.6% on Tuesday, closing in on its 50-day line as it works on a new consolidation.
Tesla Earnings Loom
Meanwhile, Tesla (TSLA) is on tap late Wednesday after it reported record third-quarter deliveries earlier this month. TSLA stock fell 0.7% to 864.27 on Tuesday, snapping a six-session win streak. The EV giant is nearing record highs, extended from earlier buy points as it works on its ninth straight weekly gain. While a pause would be healthy for Tesla stock, it’s closing fast on a 900.50 buy point from a long, deep cup base, according to MarketSmith analysis.
Bitcoin ETF Debuts
The ProShares Bitcoin Strategy ETF (BITO) debuted on Tuesday. BITO, a Bitcoin futures ETF, rose 4.85% to 41.94, from a 40 reference price. Meanwhile, the Bitcoin price rose 3% vs. 24 hours ago to nearly $64,000. It’s closing in on its all-time high of $64,888.99.
Coinbase (COIN) popped 4.2% on Tuesday to a six-month high. Facebook (FB) is tapping the cryptocurrency exchange to support its digital wallet Novi. Marathon Digital Holdings (MARA) rose 4.8% and Riot Blockchain (RIOT) climbed 3.5%. Grayscale Bitcoin Trust (GBTC) jumped 6.9%. Grayscale has filed to turn GBTC into a spot price Bitcoin ETF.
But SI stock tumbled 13%. Silvergate Capital (SI), a crypto bank, beat earnings views early Tuesday and reported a strong gain in digital assets.
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures tilted lower and Nasdaq 100 futures dipped 0.1%.
The 10-year Treasury yield rose nearly 3 basis points to 1.66%. That would be a five-month high.
Stock Market Rally
The stock market rally started off with slim gains and gradually improved. The broad advance came despite the 10-year Treasury yield jumping 5 basis points to 1.635%, hitting a fresh four-month high.
The Dow Jones Industrial Average rose 0.6% in Tuesday’s stock market trading. The S&P 500 index and Nasdaq composite climbed 0.7%. The small-cap Russell 2000 advanced 0.4%.
Apple stock rose 1.5% to 148.76, reclaiming its 50-day moving average and providing a boost for the Dow Jones, S&P 500 and Nasdaq. That could be an early entry for AAPL stock, as it builds the right side of a flat base. But Apple earnings are due next week. Apple stock has an official buy point of 157.36.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) also gained 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.9%. The VanEck Vectors Semiconductor ETF (SMH) rallied 1.1%. ASML stock is a major SMH holding.
SPDR S&P Metals & Mining ETF (XME) fell 1.9% and Global X U.S. Infrastructure Development ETF (PAVE) edged up 0.1%. U.S. Global Jets ETF (JETS) slumped 1.1%. SPDR S&P Homebuilders ETF (XHB) gave up 0.25%. The Energy Select SPDR ETF (XLE) climbed 1.1% and the Financial Select SPDR ETF (XLF) advanced 1%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 2.2%, rebounding above its 50-day line. ARK Genomics ETF (ARKG) jumped 3.4%, also starting to rebound. Tesla stock remains the No. 1 holding across ARK Invest ETFs. A number of ARK funds own COIN stock.
Netflix earnings were better than expected, with revenue in line. Netflix subscribers grew by 4.38 million, topping forecasts for 3.78 million. The streaming giant expects 8.5 million new subscribers in Q4, slightly above consensus.
Netflix stock lost more than 1% in extended trade. NFLX stock edged up 0.2% to 639 on Tuesday, consolidating for the past several sessions above a buy zone.
Intuitive Surgical Earnings
Intuitive Surgical earnings narrowly topped views, with da Vinci procedures rising 20% in the quarter.
ISRG fell a fraction in extended trade. Shares rose 1.2% to 336.30 on Tuesday after briefly clearing its 50-day line and a trend line. A move above Tuesday’s high of 345.16 could provide an early entry for Intuitive Surgical stock. ISRG stock has a flat-base entry of 362.40.
Market Rally Analysis
The stock market rally is showing real strength. The S&P 500 and Nasdaq composite extended their winning streaks to five days. The Dow Jones and S&P 500 are within 1% of all-time highs and the Nasdaq is less than 2% off record highs.
Market leadership is relatively broad, with software, chips, financials, transportation and energy among the sectors doing well. Apple stock and even Facebook are rebounding, rejoining the tech titan leadership of Microsoft (MSFT) and Google parent Alphabet (GOOGL).
A rising 10-year Treasury yield helped trigger the market correction a few week ago, and the stock market rally gained steam as Treasury yields pulled back. So it’s encouraging to see the market rally, and growth stocks in particular, continue to advance with the 10-year yield hitting fresh four-month highs.
If the 10-year Treasury yield were to continue rising sharply over several days, the market rally could easily come under pressure or worse. So that bears watching.
What To Do Now
The past several days have been a good time to buy leading stocks, and they’ve generally been working. There are still a number of intriguing stocks at or near buy areas, including Apple stock.
But don’t buy extended. A number of leading stocks are looking stretched, even some that are within traditional buy ranges but have run several days after flashing early entries. With the Nasdaq up for five straight sessions and all the major indexes near record highs, it wouldn’t be a surprise to see the stock market rally pause or pull back.
It also wouldn’t be a surprise to see at least modest sector rotation continuing. So make sure your portfolio isn’t too concentrated in a particular sector.
If you want to add overall or sector exposure, ETFs are one way to do so without trying to pick specific winners or losers.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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