Dow Jones futures dropped slightly during the night, as did S&P 500 futures and Nasdaq futures. Notable earnings reports came from Dow giants Intel (INTC) and Visa overnight. The stock market rally wavered throughout the day, but all the key indexes made gains. The fourth-quarter GDP report showed unexpectedly strong economic growth, while inflation remained low. Despite this, Tesla (TSLA) suffered a steep drop, triggering negative technical signals and prompting Cathie Wood’s Ark Invest to add TSLA shares. Humana (HUM) issued a significant warning on medical costs, affecting health insurers across the board. However, Expedia (EXPE), Adobe (ADBE), Caterpillar (CAT), and New Oriental Education (EDU) all showed buy signals on Thursday. Despite this, investors should exercise caution with new purchases in the short term.
EXPE stock was added to IBD Leaderboard on Thursday. Caterpillar was Thursday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.2% compared to the fair value. Intel and Visa are both Dow components, along with American Express. S&P 500 futures declined 0.25%, while Nasdaq 100 futures dropped 0.6%. The 10-year Treasury yield fell slightly to 4.1%. Crude oil futures also saw a small drop. It’s important to note that activity in Dow futures and other markets overnight may not necessarily reflect actual trading during the next regular stock market session.
Earnings
Intel, KLA Corp. (KLAC), Visa (V), Capital One (COF), Fair Isaac (FICO), and T-Mobile US (TMUS) reported quarterly results on Thursday night. Intel and KLA beat expectations but experienced sharp declines due to their guidance. INTC stock is prepared to test its 50-day line. Capital One decreased slightly as earnings missed due to increased loss provisions and charge-offs. T-Mobile also saw a drop as an EPS miss outweighed subscriber growth. Visa stock saw a decline after exceeding expectations but missing on payment volume and projecting higher expenses. FICO stock experienced a substantial drop as a result of an earnings and revenue miss. American Express (AXP) is set to report Friday morning. AXP stock is currently extended from a buy point but is within range of a 10-week line pullback.
Stock Market Rally
The stock market rally made gains following the GDP report and other data implying a soft economic landing, despite the sell-offs for Tesla and Humana. The Dow Jones Industrial Average rose by 0.6% in Thursday’s stock market trading, even with significant drags from Boeing (BA) and UnitedHealth (UNH). The S&P 500 index increased by 0.5%, with Tesla and Humana being the worst performers. The Nasdaq rose by 0.2%, after briefly dipping into negative territory. Market breadth was notably strong, with the small-cap Russell 2000 climbing by 0.7%. The Invesco S&P 500 Equal Weight ETF (RSP) jumped by 1%, doubling the S&P 500’s performance. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) gained 0.4% compared to the Nasdaq 100’s 0.1% uptick. However, recent Nasdaq gains have occurred on lighter volume, with the risk of a pullback heightened as a result. On a positive note, even a few days of sideways movement or a slight pullback would allow key moving averages to catch up. U.S. crude oil prices rose 3% to 77.36 a barrel, marking the highest level since late November. The 10-year Treasury yield dropped 5 basis points to 4.13%, just below the 50-day line.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose by 0.3%, with ADBE stock being a significant holding for IGV. The VanEck Vectors Semiconductor ETF (SMH) stayed flat. Intel and LRCX stock are major components for SMH. Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell by 1%, while ARK Genomics ETF (ARKG) increased by 0.9%. Tesla stock is a major holding across Ark Invest ETFs. SPDR S&P Metals & Mining ETF (XME) dropped by 0.8%. U.S. Global Jets ETF (JETS) climbed by 3.1%. SPDR S&P Homebuilders ETF (XHB) rebounded by 2%. The Energy Select SPDR ETF (XLE) gained 2.25%. The Health Care Select Sector SPDR Fund (XLV) dipped by 0.15%, with Humana and other health insurers impacting this ETF. The Industrial Select Sector SPDR Fund (XLI) increased by almost 1%. CAT stock is a big XLI stock. The Financial Select SPDR ETF (XLF) added 0.5%.
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Stocks In Buy Zones
Expedia stock rose by 2.5% to 152.30, rebounding from the 21-day and 10-week lines and testing a short trendline at least. EXPE stock is actionable now and is on track to establish a flat base with a 155.84 buy point after Friday’s close. Other travel stocks also generally performed well. Adobe stock increased by 2.65% to 622.58, moving in heavy volume toward a 633.89 flat base buy point, according to MarketSmith analysis. ADBE stock extended a 50-day line bounce, surpassing Monday’s high of 620.96 and offering an early entry. Caterpillar stock gained 3.5% to 300.77, returning above a 293.88 consolidation buy point initially cleared at the end of December. CAT stock saw a surge as a result of strong results from United Rentals (URI), which increased nearly 13% on Thursday. Caterpillar earnings are expected on February 5. New Oriental Education stock increased by 6.5% to 81.05, adding to Wednesday’s 5.8% gain on strong earnings and guidance. On Thursday, EDU stock closed above a trendline entry and a 78.19 short-term high, offering early entries. The Chinese for-profit education firm has an 83.73 consolidation buy point.
Tesla Stock
Tesla had already experienced a sell-off in 2024, falling below all its moving averages heading into the Q4 results on Wednesday night. However, the disappointing results and a challenging earnings call triggered several concerning signs for the Tesla stock chart. Shares dropped by 12.1% to 182.63, breaking below late October lows to reach their lowest levels since May. The volume was the highest since last June. Furthermore, the relative strength line, which tracks a stock’s performance vs. the S&P 500, reached a one-year low.
Ark Invest’s Ark Innovation ETF (ARKK) purchased 148,246 Tesla shares on Thursday, while Ark Next Generation Internet ETF (ARKW) added 29,624 shares. The 177,870 Tesla shares that Cathie Wood bought were worth $32.48 million as of Thursday’s close. Cathie Wood’s Ark often buys stocks following significant drops. With no significant potential positive catalysts until at least 2026, and Elon Musk even lowering ambitious expectations such as in-house Dojo chips, the Tesla growth story is over for the foreseeable future — a year after Tesla earnings growth concluded. While TSLA stock is facing downward pressure, its price/earnings ratio continues to remain high at 66.
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What To Do Now
The stock market rally may be due for a pause as investors brace themselves for the upcoming peak earnings season next week. After Taiwan Semiconductor (TSM) and ASML (ASML) raised earnings expectations, Tesla, Humana, and potentially Intel showed their downside. Even ServiceNow (NOW), which had strong results and guidance, experienced a slight reversal after several months of growth. It’s not an ideal time to significantly increase exposure. Incremental purchases could be considered, but it’s important to have exit strategies in place. Depending on your time horizon, consider taking partial profits on winners and be prompt in cutting losses. This would marginally reduce overall exposure, a proactive step amid some technical headwinds and earnings uncertainty. Nonetheless, many stocks are setting up and could present buying opportunities in the coming days, including some names that may have retraced since Monday morning. This holds especially true if the market rally maintains stability amid the intense earnings period. Therefore, it is crucial to keep your watchlists updated. Reading The Big Picture every day can keep you aligned with the market’s direction, leading stocks, and sectors. Follow Ed Carson on Threads at @edcarson1971, X/Twitter at @IBD_ECarson and Bluesky at @edcarson.bsky.social for stock market updates and more. YOU MAY ALSO LIKE: Why This IBD Tool Simplifies The Search For Top Stocks Best Growth Stocks To Buy And Watch IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
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