Mon. Jun 5th, 2023

The major stock market indexes remained mixed but climbed to the highs of the day in afternoon trading. The Nasdaq composite remained strong, after Nvidia (NVDA) reported a stellar quarterly earnings report late Wednesday.


The Nasdaq jumped 1.8%. The Dow Jones Industrial Average was 0.2% lower. The S&P 500 gained 0.9%. The iShares Russell 2000 ETF (IWM) slid 0.8%.

While impressive, the Nasdaq’s gains are skewed by rallies in a few Big Tech names such as Nvidia and Google parent Alphabet (GOOGL). The First Trust Nasdaq 100 Equal Weighted ETF (QQEW) crept up 0.4%, indicating poor breadth.

NYSE and Nasdaq volume rose vs. the same time Wednesday.

The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) rallied 2.5%. The Innovator IBD 50 ETF (FFTY) reclaimed 0.3%.

Crude oil sank 3.6% to $71.69 per barrel. Gold futures shaved 1.1% and remained below the psychological $2,000 level. Bitcoin, meanwhile, gained 0.3% to $26,315.

The 10-year U.S. Treasury yield added 8 basis points to 3.79%. The CME FedWatch tool shows nearly 70% odds for no rate hike at the June Fed meeting. The remainder of Fed watchers expect a quarter-point hike.

The weekly jobless claims for the week ended May 20 came in at 229,000 vs. the 248,000 consensus, and slightly higher than the revised 225,000 from the prior week.

Revised first-quarter gross domestic product increased 1.3% on a quarter-over-quarter annualized rate, and above the 1.1% consensus.

Watch on Friday for the April personal income and outlays numbers at 8:30 a.m. ET. The Personal Consumption Expenditures (PCE) part of the report is closely watched by the Federal Reserve and is a factor in its policy decisions.

The consensus shows April PCE rising 0.4%, according to Econoday. Estimates show April personal income rising 0.4% and the monthly PCE Price Index rising 0.3%.

Stock Market Movers: Nvidia Leads The Way

Nvidia catapulted over 26% in huge volume after blowing away fiscal first-quarter earnings and sales estimates. Its data-center sales increased 14% year over year to $4.28 billion.

“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, founder and CEO of Nvidia.

For the current quarter, Nvidia forecast sales of $11 billion, up 64% year over year. That target obliterated Wall Street’s consensus estimate of $7.2 billion.

The specialized chip designer has turned to AI for future growth and the development of tools used to build artificial intelligence applications. Nvidia also has developed its own large language models.

“With the coming wave of generative AI applications, enterprises are seeking secure accelerated tools and services that drive innovation,” Manuvir Das, vice president of enterprise computing at Nvidia, said in a news release.

Nvidia has gained more than $200 billion in market cap today, according to Dow Jones Market Data. That one-day increase is larger than the market caps of more than 20 of the largest companies in the MVIS U.S. Listed Semiconductor 25 Index, which includes Texas Instruments (TXN) and Qualcomm (QCOM).

NVDA dug out from a 52-week low of 108.13 on Oct. 13, to an all-time high today, producing a phenomenal 250%-plus increase in six months.

Other Chip Stocks Ride The Nvidia Wave

IBD 50 chip stock Rambus (RMBS) jumped 11% in heavy volume as it appeared to ride the Nvidia bandwagon. Shares have climbed to the 20% profit target from a 51.98 entry. Shares gained 21% above the buy point since May 16, earning it a Power from Pivot flag on the MarketSmith chart. The flag occurs when a stock advances at least 20% from the entry point in 15 days.

Taiwan Semiconductor (TSM) gapped up over 11% as it broke out of a double-bottom base with a 95.92 buy point on the heels of the Nvidia report. The relative strength line hit a new high, as indicated by the RS Blue Dot on its MarketSmith charts.

Chipmaker Advanced Micro Devices (AMD) popped 10.1% in heavy volume in sympathy with Nvidia.

KLA (KLAC) jumped 5.6% and broke out of a cup base with a 429.56 buy point. Shares are in the buy zone, which goes to 451.04. Shares have been on the rise since the company beat March-quarter earnings and sales views in late April. KLA makes systems used to manufacture semiconductors.

IBD 50 company Axcelis Technologies (ACLS) jumped 7.9%, lifting it above the buy zone of a 136.48 buy point. Axcelis provides spare parts, equipment upgrades and maintenance services to the semiconductor industry. It was a recent IBD 50 Stocks To Watch pick.

Other Stock Market Movers

IBD 50 stock DoubleVerify (DV) gained 2% and broke out of an irregular base with a 32.53 buy point in strong volume. It is in the 5% buy zone to 34.16. Another entry can be identified at 31.41. The company operates a platform to track digital media and analytics.

ELF Beauty (ELF) soared over 18% after a beat on the top and bottom lines for its March-ended quarter. The beauty and skin care company gave full-year adjusted EPS and net sales guidance above analysts projections.

Electronics and appliance retailer Best Buy (BBY) trimmed earlier gains to 1.5% after reporting stronger-than-expected Q1 earnings, but sales that missed estimates.

Snowflake (SNOW) tanked over 16% despite a beat on its April-ended quarterly sales, but it did lower its July quarter and full-year revenue guidance. Shares fell below the 50-day line in heavy volume. The reduced guidance prompted several analysts to cut their price targets on the cloud-based data storage and analytics company.

Dollar Tree (DLTR) tumbled over 10% after reporting a miss on its Q1 adjusted EPS and a beat on sales.

Animal health care stock Zoetis (ZTS) continued dropping and triggered a 7% sell signal from the 176.76 buy point of a flat base. Shares fell further below the 50-day line, which is looking like another sell signal.

The company beat Q1 EPS estimates but missed sales views on May 4, and has been on a downward path since then.

Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.


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