Futures Rise, Carvana Spikes After Stocks Erase Big Fed Gains (2024)

Dow Jones futures rose early Thursday, along with S&P 500 futures and Nasdaq futures in day two reaction to Wednesday's Federal Reserve meeting. Carvana (CVNA) and Qualcomm (QCOM) led earnings reports Wednesday night.


The stock market rally attempt had a wild afternoon. The major indexes rose sharply after the Fed agreed to slow the pace of balance sheet reductions while Fed chief Jerome Powell didn't take a hawkish tone. But in the final hour they slashed gains, closing mixed.

AI stocks had a tough day after Advanced Micro Devices (AMD) and Super Micro Computer (SMCI) sold off after earnings. Nvidia (NVDA) pared sharp losses somewhat, but faded again into the close.

After the close,Qualcomm, DoorDash (DASH), Sprouts Farmers Market (SFM) and Carvana reported.

Novo Nordisk (NVO) headlined earnings early Thursday while Apple (AAPL) reports after Thursday's close.

Nvidia stock and Novo Nordisk are on IBD Leaderboard. Novo Nordisk stock is on the IBD 50. Nvidia and Super Micro stock are on the IBD Big Cap 20.

Fed Meeting

The Federal Reserve left rates steady, with the Fed meeting statement noting "a lack of further progress" in recent months toward the 2% inflation target.

Starting in June, the Fed will reduce the runoff from its balance sheet to $60 billion a month from $95 billion. This slowdown in quantitative tightening is a de facto easing.

Fed chief Powell said it will likely take "longer than previously expected" for inflation to cool. But, allaying fears of a more-hawkish tone, Powell says he still expects inflation to cool before year-end, though his confidence is lower than earlier this year.

The odds of a Fed rate cut by the September meeting are now at 53.8% vs. 45.9% on Tuesday and 69.8% a week earlier. Markets only expect one rate cut by year-end, with a slim chance of no move.

Early Wednesday, the Labor Department reported job openings fell in March to their lowest in three years. Meanwhile, the ISM manufacturing index unexpectedly fell just below the break-even 50 level. But the ISM prices paid gauge rose more than expected.

On Friday, the Labor Department will release the April jobs report.

Dow Jones Futures Today

Dow Jones futures rose 0.5% vs. fair value. S&P 500 climbed 0.7% and Nasdaq 100 futures advanced 0.9%.

The 10-year Treasury rose slightly to 4.61%.

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.

Join IBD experts as they analyze leading stocks and the market on IBD Live

Stock Market Rally

The stock market rally didn't do a whole lot until the 2 p.m. ET Fed announcement. But the major indexes, after initial big gains on Fed chief Powell's news conference, came well off highs to close mixed, slightly worse than before the Fed news.

The Dow Jones Industrial Average rose 0.2% in Wednesday's stock market trading. The S&P 500 index and Nasdaq composite fell 0.3%. The small-cap Russell 2000 advanced 0.25%.

At session highs, the stock market seemed on track for a by-the-book follow-through day to confirm its rally attempt.

But the major indexes never topped their 50-day moving averages and all closed below their 21-day lines.

The stock market could have a day two reaction to the Fed meeting, with Friday's jobs report putting Powell comments in a new light.

Super Micro stock plunged 14%, while AMD lost nearly 9%, after the AI plays gave lackluster guidance. Nvidia, the most important stock and company of the AI boom, rebounded from a 6% intraday loss but still sank 3.9%, below its 50-day line.

TransMedics (TMDX), Powell Industries (POWL), Garmin (GRMN) and Pinterest (PINS) all skyrocketed on earnings.

U.S. crude oil prices tumbled 3.6% to $79 a barrel, off 5.8% so far this week, as domestic stockpiles swelled. Gasoline futures sank 4.2% Wednesday

The 10-year Treasury yield fell 9 basis points to 4.59%.


Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.2%. The VanEck Vectors Semiconductor ETF (SMH) slumped 2.9%. Nvidia stock is the No. 1 stock in SMH, with AMD also a key holding.

SPDR S&P Metals & Mining ETF (XME) closed just above break-even. The SPDR S&P Homebuilders ETF (XHB) fell 0.4%. The Energy Select SPDR ETF (XLE) retreated 1.6% while the Health Care Select Sector SPDR Fund (XLV) climbed 0.2%.

The Industrial Select Sector SPDR Fund (XLI) dipped 0.25%. The Financial Select SPDR ETF (XLF) closed flat.

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Qualcomm earnings and guidance were strong, sending QCOM stock solidly higher overnight. The wireless chip giant dipped 1.1% to 164.03 on Wednesday, slightly below the 50-day. Qualcomm stock has a 175.99 double-bottom buy point.

DoorDash reported a wider-than-expected loss. DASH stock plunged in extended action. The delivery app giant slipped 1.45% to 127.38 on Wednesday. DASH stock had been close to forging a flat base.

Sprouts earnings topped. SFM stock rose solidly overnight back into a buy zone. The natural foods grocer fell 2.6% to 64.29 on Wednesday, below a 65.53 flat-base buy point.

Carvana earnings easily beat views while guidance was strong. CVNA stock skyrocketed 35% in premarket action. The online used-car seller jumped 5% to 87.09 on Wednesday, holding above the 50-day. Carvana stock has been consolidating since late March, but is set to blast above that.

Novo Nordisk earnings beat views early Thursday on booming sales of its weight-loss drugs, with the Danish pharma giant also raising guidance. Shares were little changed before the open. NVO stock edged up 0.7% Wednesday to 129.21, just above the 50-day. Novo has a 138.28 flat-base buy point, but Tuesday's high of 130.46 could serve as an early entry. Rival Eli Lilly (LLY) popped Tuesday on strong earnings and guidance.

Apple earnings are due Thursday night. Expectations are low, while the stock has been trending lower since mid-December. The Dow tech giant rose slightly before the open. AAPL stock edged down 0.6% to 169.30 on Wednesday, falling back from 50-day line resistance. It's still a gigantic company that can move markets. Investors would like to hear hints about AI products but that may have to wait for a later date.

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What To Do Now

The stock market rally had a dispiriting day. In the final hour, the market went from a likely follow-through day to a mixed-to-negative session.

It's a reminder that investors should be waiting for real signs of strength before getting aggressive.

A number of leading stocks are just above or below their 50-day lines, often within bases. It wouldn't take a big move for many of these names to look actionable. But it wouldn't take much for many to look seriously damaged.

So have your watchlists up to date and your exit plan ready.

ReadThe Big Pictureevery 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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Futures Rise, Carvana Spikes After Stocks Erase Big Fed Gains (2024)


Why did Carvana stock jump? ›

Carvana's stock (CVNA) rallied late Wednesday after the company reported the surprise earnings and larger revenue, and the rally gathered steam on Thursday. Carvana, one baffled analyst said Thursday, is perhaps the hardest stock make calls on.

Why is Carvana stock up today? ›

The jump in share price comes after Carvana posted its Q1 2024 results yesterday. The company, which was close to bankruptcy just a few years ago, posted revenue of $3.06 billion for the quarter versus the $2.67 billion that Wall Street expected, reports CNBC.

How high can Carvana stock go? ›

CVNA Stock 12 Month Forecast

Based on 18 Wall Street analysts offering 12 month price targets for Carvana Co in the last 3 months. The average price target is $107.54 with a high forecast of $135.00 and a low forecast of $70.00. The average price target represents a -8.48% change from the last price of $117.50.

What does it mean when the stock market goes up points? ›

For stocks, one point equals one dollar. So when you hear that a stock has lost or gained X number of points, it is the same as saying the stock has lost or gained X number of dollars. Using points to describe share price gains, or declines, is generally done to describe short-term results, such as for the day or week.

Why is Carvana going under? ›

Carvana's debt grew, including the debt-funded ADESA deal, and its stock became the most shorted in the country as fears of bankruptcy and a creditor fight grew. The stock lost nearly all of its value in 2022, causing some to speculate bankruptcy may be ahead.

Has Carvana ever turned a profit? ›

Carvana posts first-ever annual profit after it cuts debt, shares surge.

Why is Carvana skyrocketing? ›

During the pandemic, Carvana's business boomed. Supply chain disruptions led to a chip shortage, affecting new car production and driving up demand for used cars. Carvana seized this opportunity to scale its business, even reaching a stock price of over $375 per share in August 2021.

What is the highest Carvana stock has ever been? ›

The latest closing stock price for Carvana as of May 24, 2024 is 109.15.
  • The all-time high Carvana stock closing price was 370.10 on August 10, 2021.
  • The Carvana 52-week high stock price is 129.00, which is 18.2% above the current share price.

How is Carvana doing in 2024? ›

In Q1 2024, Carvana sold 91,878 retail units (+16% YoY) for total revenue of $3.061 billion (+17% YoY) while reaching new profitability milestones, including: Record Q1 Net Income of $49 million 2 and Net Income margin of 1.6% Record Adjusted EBITDA of $235 million.

Who are Carvana's biggest investors? ›

Largest shareholders include Abrams Bison Investments, Llc, Fmr Llc, CAS Investment Partners, LLC, Goodnow Investment Group, Llc, Clearbridge Investments, LLC, 683 Capital Management, LLC, Sylebra Capital Ltd, Clough Capital Partners L P, BlackRock Inc., and Principal Financial Group Inc . Carvana Co.

How much will Carvana stock cost in 2025? ›

Long-Term Carvana Stock Price Predictions
2025$ 277.60164.38%
2026$ 733.94598.99%
2027$ 1,940.411,748.01%
2028$ 5,130.124,785.82%
2 more rows

How much is 1 point in the stock market? ›

A 1 point change in the Dow Jones Industrial Average (DJIA) means that the sum of the prices of the 30 stocks changed by about $0.147.

Why is the stock market down 700 points? ›

Dow Plunges 700 Points—Worst Day In 14 Months As Disappointing GDP Report Accelerates Stagflation Fears. Derek Saul has covered markets for the Forbes news team since 2021.

What are the trigger points for the stock market? ›

A cross-market trading halt can be triggered at three circuit breaker thresholds—7% (Level 1), 13% (Level 2), and 20% (Level 3). These triggers are set by the markets at point levels that are calculated daily based on the prior day's closing price of the S&P 500 Index.

Is Carvana a good stock to buy right now? ›

Is Carvana stock a Buy, Sell or Hold? Carvana stock has received a consensus rating of hold. The average rating score is and is based on 26 buy ratings, 48 hold ratings, and 14 sell ratings.

How did Carvana grow so fast? ›

Through a constant focus on our customers, technology and innovation, we operate with shared core values, setting a new automotive retail standard for how customers should be treated: with care, honesty and respect,” said Ernie Garcia, Carvana founder and CEO.

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