Futures Fall With Jobs Data Stakes High As Indexes Lose Support

Dow Jones futures fell Friday morning, along with S&P 500 futures and especially Nasdaq futures ahead of the key jobs report. AI plays Broadcom (AVGO) and Samsara (IOT) headlined earnings overnight.

The stock market rally rebounded solidly Thursday morning, but the indexes quickly turned mixed. The S&P 500 and Russell 2000 undercut key levels while the Nasdaq barely made a dent in recovering recent losses.

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Economic growth concerns continued amid mixed reports Thursday heading into Friday’s jobs report. August nonfarm payrolls are expected to rise by 160,000, picking up from July’s weak 114,000. The jobless rate should tick down to 4.2%.

Investors fear another downside jobs report after surprisingly weak labor data this week.

Tesla (TSLA) was a clear standout Thursday with Tesla stock jumping on Full Self-Driving rollout plans.

Tesla rival BYD (BYDDF), PennyMac Financial Services (PFSI), Sea (SE) and DaVita (DVA) are holding in buy zones.

ServiceNow (NOW), Meta Platforms (META), DoorDash (DASH) and Netflix (NFLX) are all trying to move off key short-term support and back above buy points.

Nvidia (NVDA) rose slightly, but it was an inside day after heavy losses over the past several sessions.

Overall, investors should be wary of new buys and acting to cut losers, waiting for evidence

Nvidia stock, DaVita and ServiceNow are on IBD Leaderboard, with DoorDash on the Leaderboard watchlist. Meta stock and ServiceNow are on the IBD 50.

Dow Jones Futures Today

Dow Jones futures fell 0.35% vs. fair value. S&P 500 futures declined 0.55%. Nasdaq 100 futures tumbled 0.95%, with Broadcom, Nvidia and many other big techs retreating.

The 10-year Treasury yield fell a few basis points to 3.71%.

Crude oil futures edged higher.

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

Broadcom earnings narrowly topped quarterly views but sales guidance came in light. AVGO stock fell solidly in overnight trade. The AI chip and software giant dipped 0.8% to 152.82 in Thursday’s session. Broadcom stock had a 172.42 handle buy point in a consolidation going back to June 18, but may not after Friday.

NVDA stock and Nvidia chipmaker Taiwan Semiconductor (TSM) declined slightly in sympathy.

Samsara earnings topped with the AI and internet of things play giving generally good guidance. IOT stock rose solidly in extended action, off initial after-hours highs but signaling a  move back above a buy point. Shares edged up 0.2% to 38.75 on Thursday, finding support near the 50-day. Shares undercut the 39.21 cup-with-handle entry earlier this week.

Smartsheet (SMAR) beat earnings after the close, with SMAR stock up solidly overnight. Shares popped 4.25% to 49.35 on takeover buzz, now out of range of a 45.34 cup-with-handle buy point cleared initially in July.

Guidewire Software (GWRE) topped views with the insurance underwriting software maker guiding higher. Shares soared early Friday. GWRE stock fell 2.1% to 143.93 on Thursday, just holding its 50-day line. Guidewire stock has a 153.85 flat-base buy point.

DocuSign (DOCU) earnings topped views, with shares edging higher overnight. DOCU stock is working on a possible handle in a messy consolidation going back to December 2023. Shares dipped 0.85% to 56.93 on Thursday.

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Stock Market Rally

The stock market rally looked like it was in recovery mode Thursday mode but that didn’t last long.

ADP estimated August private-sector hiring was the weakest since January 2021, well below views. That came a day after July job openings also were the lowest since the start of 2021. Weekly jobless claims and the August ISM services index showed a little more strength, but investors turned cautious again heading into Friday’s jobs report.

The Dow Jones Industrial Average fell 0.5% in Thursday’s stock market trading, undercutting its 21-day line intraday but ending above that level. The S&P 500 index dipped 0.3% and the small-cap Russell 2000 lost, both closing slightly below their 50-day lines.

The Nasdaq composite, up 1.2% early on, settled for a 0.25% advance, clearly below its 21-day and 50-day lines. The tech-heavy index held the 17,000 level and above the low of its Aug. 13 follow-through day, but those are still in play.

The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.6%, though just testing its 21-day line.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) slipped 0.3%, testing support at the 200-day line.

Both ETFs show how Thursday’s limited strength was concentrated in Tesla and, to a lesser extent, big techs as Nvidia, Meta Platforms, ServiceNow and Netflix.

U.S. crude oil prices dipped 5 cents to $69.17 a barrel, giving up intraday gains even with OPEC+ delaying a planned production output hike. Crude futures, now down 8.9% over four sessions, is at 2024 lows. Gasoline futures sank 1.8% Thursday and 14.3% over four session to their lowest levels since March 2021.

The 10-year Treasury yield fell nearly 4 basis points to 3.73%, down 18 basis points so far this week. It’s the lowest close since June 2023.

ETFs

The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.4%. ServiceNow stock is a big IGV components with Samsara, Guidewire, DocuSign and Smartsheet all members. The VanEck Vectors Semiconductor ETF (SMH) dipped 0.2%. Nvidia is the No. 1 holding in SMH, with Broadcom stock also a key holding.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 1.7% and ARK Genomics ETF (ARKG) advanced 0.4%. Tesla is a major component across Ark Invest’s ETFs. Nvidia stock is also a key holding.

The SPDR S&P Homebuilders ETF (XHB) and the Energy Select SPDR ETF (XLE) sank 0.8%. The Health Care Select Sector SPDR Fund (XLV) retreated 1.4%.

The Industrial Select Sector SPDR Fund (XLI) declined 1.2% and the Financial Select SPDR ETF (XLF) fell back 1.1%.

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Tesla Stock

Tesla stock rose 4.5% to 229.20 on Thursday, reclaiming the 50-day line. Though closing off intraday highs of 235, shares flashed a buy signal as they topped a short-term high of 228.22.

Still, market conditions add to the risks of making an aggressive entry.

Shares fell slightly early Friday.

TSLA stock has an official 271 buy point from a 33%-deep consolidation.

Tesla, via Elon Musk’s X, aims to roll out Full Self-Driving in China and Europe in the first quarter of 2025, pending regulatory approval. In July, Musk had said he expected regulatory approval in those markets by the end of 2024.

Tesla also confirmed FSD will roll out to the Cybertruck this month and said FSD V13 will be released in October.

The EV giant will hold a robotaxi event on Oct. 10.

It’s not clear what Tesla will show. Full Self-Driving, despite its name, is a Level 2 driver-assist system.

Separately, China EV giant BYD rose 0.9% to 30.30, holding in range of the 30 cup-with-handle buy point cleared last Friday.

What To Do Now

The market rally is on a knife edge, with the S&P 500 and Russell 2000 just undercutting the 50-day line but not that far from looking healthy again. The Nasdaq is more damaged, but not beyond repair.

If the market rebounds, a lot of stocks that are setting up will flash buy signals. But further market weakness could trigger a number of sell signals.

While Tesla impressed Thursday and the likes of Meta, ServiceNow, DoorDash and PennyMac look solid, that can quickly change in a tough market. Eli Lilly (LLY), GE Aerospace (GE) and CyberArk (CYBR) are among those breaking below their 21-day lines this week.

In this environment, it’s best to wait and see how this plays out. It’s not a time for new buys. You can keep modest exposure, perhaps cutting back as you step out of losing positions.

But be prepared for a decisive market move up or down. Have your watchlists up to date and your exit plans ready heading into Friday’s jobs report and Wall Street reaction.

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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