Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The U.S. stock market rebounded on Wednesday after Tuesday’s sell-off, with major indexes closing off their session highs. Investor sentiment appeared to be buoyed by the Supreme Court’s expressed skepticism regarding President Donald Trump’s tariff authority during oral arguments, alongside mixed signals from economic reports and a series of corporate earnings announcements.
Market Performance and Economic Indicators
The Dow Jones Industrial Average rose 0.5% in Wednesday’s trading, while the S&P 500 climbed 0.4%, and the Nasdaq composite advanced 0.65%. The small-cap Russell 2000 notably jumped 1.5%. All major indexes found support around their 21-day moving averages, with the Russell 2000 bouncing from its 50-day line before encountering resistance at its 21-day average.
Economic data released Wednesday indicated modest growth, with the ADP Employment Report and the ISM services index contributing to the market’s backdrop. Concurrently, U.S. crude oil prices fell 1.6% to $59.60 a barrel, and the 10-year Treasury yield increased seven basis points to 4.16%, positioning itself above its 50-day line.
Key Earnings and After-Hours Trading
After the market close on Wednesday, several prominent companies reported earnings, leading to varied reactions in after-hours trading. AppLovin and SiTime shares saw solid gains, with both eyeing potential early entry points. ARM Holdings stock showed modest movement back towards a buy point, and IonQ shares bounced, though remaining some distance from its 50-day moving average.
Conversely, DoorDash shares experienced a significant decline following an earnings miss, occurring after the stock had already broken key support levels. Robinhood fell modestly, trading near an early entry point, while Qualcomm stock also declined solidly after a recent pause.
Stocks Nearing Buy Points
Several individual stocks were observed near potential buy points during Wednesday’s session. These included Broadcom, Twilio, JPMorgan Chase, Mercury Systems, and Intuitive Surgical. Twilio, in particular, was highlighted as a stock of interest.
ETF Performance
Among exchange-traded funds, the Innovator IBD 50 ETF rallied 1.6%, and the VanEck Vectors Semiconductor ETF popped 1.9%. The iShares Expanded Tech-Software Sector ETF dipped 0.2%, while ARK Innovation ETF gained 1.7% and ARK Genomics ETF climbed 0.8%. Broader sector ETFs also saw gains, with SPDR S&P Metals & Mining ETF advancing 0.8%, Energy Select SPDR ETF climbing 0.25%, Health Care Select Sector SPDR Fund up 0.4%, Industrial Select Sector SPDR Fund advancing 0.4%, and Financial Select SPDR ETF climbing 0.3%.
Market Summary
Wednesday’s market action presented a mixed picture, with indexes finding necessary support but failing to sustain earlier highs, especially following Tuesday’s heavy selling. The current earnings season and recent market volatility have created a challenging environment for new investments, with many stocks testing or undercutting previous buy points before attempting to rebound.
