Dow Jones futures fell Thursday morning alongside S&P 500 futures, especially Nasdaq futures, while US Treasury yields rose. NVIDIA (NVDA) and AMD stocks fell overnight, pushing semiconductors down after the US government announced it would impose export restrictions on certain chip sales to China.
The stock market’s rise on Wednesday briefly attempted a weak rebound, with major indices hitting resistance at their 50-day moving averages before falling.
Chinese EV startups such as Nio announced their August sales on Thursday morning.
Nvidia stock falls at curb in China
Nvidia shares fell 4% in premarket trading. The chip giant said in an SEC filing Wednesday night that the U.S. government has imposed new licensing requirements barring the sale of certain advanced data center chips to China and Russia. said it raised concerns about “military end uses.” His Nvidia, which does not currently sell products to Russia, said the restrictions could affect sales to China by $400 million.
The US government is imposing more and more restrictions on high-end chip technology for China.
Nvidia rival Advanced Micro Devices (AMD) reported a similar US notice about selling various AI-powered GPUs to China. AMD shares fell 3% in early trading. Taiwan Semiconductor Manufacturing (TSM), which makes Nvidia chips, fell 2%.
The SMH ETF, whose main component is three chip makers, is down 2% in late trading. Several other chip stocks fell slightly on the news of Nvidia and AMD.
pure storage (PSTG) headlined overnight earnings. PSTG shares surged on better-than-expected earnings and earnings guidance. The stock fell 1.8% to 28.97 on Wednesday, closing just above the 200-day line. PSTG stock could test the buy point at 31.62 from the handle cup base.
EV sales in China
Early Thursday morning, Chinese EV startup Nio (NIO), lee auto (LI) and XPeng Motors (XPEV) reports August shipping data. EV and battery giant BYD (BYDDF) could report Friday or Saturday. With Nio shares, Li Auto, Xpeng, BYD, and EV giant shares Tesla (TSLA) is currently struggling.
A new U.S. ban on the sale of certain Nvidia and AMD chips could affect Chinese EV makers, particularly their self-driving or driver-assist efforts.
dow jones futures today
Dow Jones futures fell 0.4% against fair value. S&P 500 futures are down 0.5% and Nasdaq 100 futures are down 0.7%, with AMD and Nvidia stocks and chips overall weighing on the S&P 500 and Nasdaq futures. However, futures have moved away from last night’s lows.
The 10-year Treasury yield rose 7 basis points to 3.2%.
Crude oil fell more than 2%. Copper fell 2%.
Meanwhile, Chengdu, the capital of southwestern China’s Sichuan province, has placed 21 million residents in lockdown over Covid cases.
Note that overnight trading on Dow futures or elsewhere does not necessarily lead to actual trading on the next regular stock market session.
Investors should be cautious about new purchases and reducing exposure as the market bounces back very weakly. But they should look for potential leaders on their watchlist.
enphase energy (ENPH), Pindudu (PDD) and NBIX stocks are all well aligned, with relative strength at 2022 highs.
Enphase Energy and PSTG shares are included on the IBD 50 list. The ENPH strain is also included in the IBD Big Cap 20. neurosecretory bioscience (NBIX) was Wednesday’s IBD Stock Of The Day.
Join IBD experts analyzing viable stocks on IBD Live stock market rally
stock market rally
The stock market’s gains tried to rebound on Wednesday morning, but major indices quickly retreated and closed at session lows.
The Dow Jones Industrial Average fell 0.9% in stock market trading on Wednesday. The S&P 500 Index fell 0.8% for him. The Nasdaq Composite and small-cap Russell 2000 pulled him back 0.6%.
US crude futures fell 2.3% to $89.55 a barrel.
The 10-year Treasury yield rose two basis points to 3.13%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dropped 0.4%. The iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) were down 0.7%. TSM, Nvidia and AMD shares are SMH’s primary holdings.
The SPDR S&P Metal Mining ETF (XME) fell 0.8%. The Energy Select SPDR ETF (XLE) increased 0.9%. The Healthcare Select Sector SPDR Fund (XLV) was down 0.6%.
Reflecting more speculative story stocks, the ARK Innovations ETF (ARKK) fell 0.1% while the ARK Genomics ETF (ARKG) rose 1.3%. Tesla stock is Ark Invest’s primary holding in his ETF. Cathie Wood’s Ark also owns shares in Nio and BYD.
5 Best Chinese Stocks to Watch Right Now
EV sales in China
Nio, Li Auto and XPeng reported August deliveries before opening on Thursday.
Nio delivered 10,677 vehicles in August, up 82% year-on-year and up 6% over July. This includes some of his ES8 SUVs, which started delivering on August 28th.
Nio’s stock fell 2% before Thursday’s opening. The stock on Wednesday rose 0.6% to 19.95, below the 50-day line. Nio is tackling the base buy point of the 24.53 bottom which includes crossing the 200-day line.
LI had just 4,577 hybrid SUVs, down 56% from July and 52% from the previous year. The upcoming vehicle could eclipse demand for the existing hybrid SUV, the Li One. The L9 hybrid SUV will start delivering on August 30th, with the L8 coming his November.
Li Auto fell 2% before opening. The stock fell 0.1% to 28.77 on Wednesday, once again reaching 200-day resistance.
XPeng shipped 9,578 units, up 96% from the same period last year, but down 17% from July. Xpeng is set to unveil its new SUV, his G9, in the fourth quarter. XPEV shares fell 2% on Thursday. The stock rose 1.4% to 18.52 on Wednesday after hitting a 22-month low on Tuesday.
BYD, meanwhile, is likely to report August sales on Friday or Saturday. His July sales of EVs and plug-in hybrids were up 222% year-on-year to his 162,350 units. There are signs that BYD will set another record in his August.
On Monday, BYD reported a 60% increase in revenue for the first half of the year, with revenue tripled over the same period last year. This caused the stock price to rise slightly.
However, BYD shares fell 7.8% on Tuesday and 4.35% to 30.75 on Wednesday. Shares of the EV and battery giant fell below the 200-day line after hitting a record 43.61 on June 28.
Warren Buffett’s Berkshire Hathaway (BRKB) said Tuesday it sold 1.33 million H shares in Hong Kong on August 24. Berkshire still owns just under 8% of BYD, but investors fear BYD will continue to sell shares.
Tesla has not announced sales in China, but trade sources suggest production in Shanghai reached a near-record 77,000 units in July. Excluding exports, local sales exceeded 30,000 units in August. Tesla’s more complete industry data will be released later in September.
The stock fell 2% before the open, suggesting a test of the 50-day line. Tesla shares fell 0.75% to 275.61 on Wednesday. The stock has fallen from its 200-day and 21-day moving averages.
Tesla vs. BYD: Which EV giant is better to buy?
Market rally analysis
The stock market rally hasn’t shown much of a fight. On Wednesday morning, the major indices rose, but soon hit a wall at the 50-day moving averages. They retreated and eventually closed at session lows.
The Russell 2000 and S&P 400 mid-cap stocks were slightly below their 10-week averages but retreated to just above the 50-day line.
A break above the 50-day line is important for the Nasdaq, but it is certainly not a clear signal for the bulls. On the other hand, it doesn’t take much of a fall to force a volatile market rally into a correction.
A US ban on the sale of certain chips from Nvidia and AMD will hit the semiconductor sector on Thursday. Software names, especially high-value growth, are under pressure. Octa (OKTA), MongoDB (MDB) and Viva (VEEV) fell more than 10% on earnings.
Time the Market with IBD’s ETF Market Strategy
what to do now
The market rally is under pressure for now, but the weakness is evident. Investors should focus on taking profits and reducing losses rather than adding exposure.
Work on your watchlist. Keep looking for possible setups, but try to track quality stocks with high relative strength even if the charts are not yet ripe. can perform. And relative winners can still be absolute losers.
Read The Big Picture daily to understand the market direction and key stocks and sectors.
Follow Ed Carson on Twitter. @IBD_E Carson Stock market updates and more.
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