The Dow Jones futures rose slightly on Wednesday night, as did the S&P 500 futures and the Nasdaq futures. The stock market rally marked the time for a second straight day when the Treasury Department detailed the tax hike plans for Biden.
However, Apple stock has regained its 50-day moving average Amazon.com ((AMZN), Nvidia ((NVDA) continued to rise above their 50-day line. Microsoft ((MSFT), Facebook ((FB) And google parents alphabet ((TogetL) continue to advance.
Apple stock rose 1.3% to 127.90, regaining its 50-day line. Amazon stock rose 1.7% and moved up the right side of its consolidation after resuming its 50-day line on Monday. Nvidia stock rose 2% and climbed the right side of a cup bottom after breaking its 50-day mark last week. Microsoft rose 0.8%, Google 1.35% and Facebook 2.2%, all of which were still in the buy range after Monday’s outbreaks.
Meanwhile, Tesla stock, which had been seeing upward resistance for the past few days, fell back to an important area of support. Tesla ((TSLA) is pushing back deliveries of its revised S and X models after none of the luxury electric vehicles were produced in the first quarter.
The stock market rally showed little movement in the major indices, with the technology giants providing some support. However, the small-cap Russell 2000 undercut the key levels.
Biden tax plan details
The finance department released more details on Biden’s tax plan. President Joe Biden continues to call for the federal corporate tax rate to be increased from 21% to 28%. However, a proposed 15% minimum tax on companies to ensure that companies like Amazon pay taxes applies to companies with annual income greater than $ 2 billion (up from $ 100 million). This will limit affected companies to just 40, according to Treasury Department estimates, down from 1,100 below the $ 100 million mark.
Meanwhile, President Biden said Wednesday he was willing to compromise the size of the corporate tax hike amid Senator Joe Manchin, D-W.Va., And many corporations object.
Still, Wall Street could move from pricing the recovery of Biden’s new $ 2.25 trillion spending plan to counting the cost of tax increases on corporate profits. In addition, more attention is paid to the relatively small share of infrastructure expenditure in the infrastructure plan.
Fed Meeting Minutes Stress No movement to tighten
Federal Reserve policy makers said it will be “some time” before they lift aggressive monetary policies in support of the economy and give early warning of possible steps. That emerges from the newly published minutes of the Fed meeting in March. This is what Fed Chairman Jerome Powell and most policy makers have said, even as the economic recovery accelerates.
Dow Jones Futures today
The Dow Jones futures were up 0.15% from their fair value. S&P 500 futures gained 0.35% and Nasdaq 100 futures gained 0.5%.
The 10-year government bond yield rose to 1.67% in late trading.
Coronavirus cases reached 133.68 million worldwide. Covid-19 deaths topped 2.90 million.
Coronavirus cases in the US have killed 31.63 million people, with deaths over 571,000.
Stock market rally
The stock market rally was again calm, at least outside of the small caps.
The Dow Jones Industrial Average rose a fraction on Wednesday Stock exchange trading. The S&P 500 index rose 0.15%. The Nasdaq composite fell 0.1%. The Nasdaq 100 rose 0.3% and hit record highs.
Apple Stock and Microsoft are Dow Jones components. It’s also S&P 500 and Nasdaq stocks, as well as Amazon stocks, Facebook, Google, and Nvidia – and Tesla.
But small caps have had a tougher time. The Russell 2000 fell 1.6% below its 21-day and 50-day moving averages.
Leading stocks also pulled back.
Under the best ETFs, the innovator IBD 50 ETF (FFTY) fell 1.2%, while the innovator IBD Breakout Opportunities ETF (STRUGGLE) fell by 2.1%. The iShares Expanded Tech-Software Sector ETF (IGV) declined 0.2%, with MSFT shares topping the IGV position. The VanEck Vectors Semiconductor ETF (SMH) decreased by 0.2%. Nvidia stock is a key SMH component.
Tesla stock fell 3% to 670.97 and closed just above 21-day exponential moving average. Tesla jumped above the 21-day mark on Monday but encountered resistance on its 10-week line and just below its short-term March highs.
People who ordered a revised Model S or X earlier this year will see that delivery dates have been postponed from April to May to May to July. At the end of January, CEO Elon Musk announced that the revised S and X models were in production and that delivery of the new S sedan would begin in February. However, no new Model S or X vehicles were produced in the first quarter.
After closing, CNBC reported that Tesla reimbursed customers for double billing for their EV purchases last month. An email apology was sent with $ 200 credit on the Tesla online store.
While TSLA stock tested its 21-day exam, the specs haven’t changed materially. Someday, the EV giant would test or beat recent highs. On the other hand, Tesla stock is a way of not looking really strong.
Even so, Tesla looked a lot better than its Chinese EV rival on Wednesday. Nio ((NOK) lost 6.8% and Xpeng ((XPEV) 7.9%. Li car ((LI), which announced plans for a $ 750 million convertible bond offering, fell 13%.
Market rally analysis
The stock market rally moved sideways for a second session in a row. After several days of solid profits, it is healthy for major indices and leading stocks to digest profits.
Stocks could use the pause to form handles on their bases or to consolidate near the last buy points. In fact, the Nasdaq and Nasdaq appear to be forming 100 grips. The Russell 2000’s retreat below key levels hasn’t been great, although it’s still in the middle of its most recent range.
Leading stocks generally pulled back but still appear to be in good shape.
The market leadership remains broad, but the winners change every few days. Currently, tech titans are taking the lead after several months of consolidation. Microsoft, Google, and Facebook stocks are all at record highs and are still in buy zones, according to data MarketSmith analysis. Amazon stocks and Nvidia are not far from buy points, while Apple stocks still have some work to do.
Don’t buy extended. You may have got away with it during the strong April-September rally, but in the current climate, stocks can see big declines.
Don’t focus too much on any particular group or market segment. Take advantage of the broad market rally to generate returns while limiting stock or industry-specific risk.
Read The big picture every day to stay in sync with 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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