Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is on tap Thursday morning.

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The stock market rally gave off morning highs, turning negative before bouncing back late. The Nasdaq, Dow Jones and Russell 2000 all at key levels Treasury yields continued ti slide. The September producer price index came in a little hot, but there were details that bode well for the Fed’s favorite inflation gauge, the core PCE index, later this month.

Fed minutes released Wednesday from the September meeting signaled the central bank plans to keep policy “restrictive,” which was no surprise. But in the past several days, policymakers — including hawkish members — have signaled that the surge in Treasury yields has reduced the need for further Fed rate hikes.

Adobe (ADBE), DraftKings (DKNG), Nvidia (NVDA), Sterling Infrastructure (STRL) and Novo Nordisk (NVO)

NVO stock and Eli Lilly (LLY) continue to rally on good news for their weight-loss drugs, with Novo. But that good news continues to crush medical product stocks

Delta Air Lines (DAL) will report earnings early Thursday. DAL stock and other carriers have sold off hard on rising fuel costs and concerns about waning travel demand. The Israel-Hamas fighting also is a concern, with Delta and other major airlines suspending flights to Tel Aviv.

Nvidia stock and Eli Lilly are on IBD Leaderboard, with DKNG stock on the Leaderboard watchlist. NVO stock is on are on SwingTrader. Nvidia, DraftKings, Adobe, Novo Nordisk and LLY stock are on the IBD 50. Adobe stock and Nvidia are on the IBD Big Cap 20. DraftKings was Wednesday’s IBD Stock Of The Day.

In other news, the United Auto Workers expanded its strike to a Ford Motor (F) truck plant in Kentucky on Wednesday evening. The surprise move shuts production at Ford’s largest plant worldwide. Ford stock fell slightly.

Dow Jones Futures Today

Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.3%.

The 10-year Treasury yield bond fell slightly to 4.57%.

The CPI inflation report at 8:30 a.m. ET will certainly swing Dow futures and Treasury yields.

Crude oil futures edged lower. The Energy Information Administration will release weekly crude and gasoline production, inventory and demand data Thursday morning.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

CPI Inflation Report

Economists expect the September consumer price index to rise 0.3%, after jumping 0.6% in August on soaring gasoline prices. Gas prices have been cooling in the past few weeks, a trend that should continue.

Year over year, the CPI inflation rate should slow to 3.6% from 3.7%.

Core CPI is seen rising 0.3%, the same as August’s monthly gain. The core CPI inflation rate is forecast to cool to 4.1% from 4.3%.

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Stock Market Rally

The stock market rally erased early gains but bounced back to close near session highs with the Nasdaq leading.

The Dow Jones Industrial Average rose 0.2% in Wednesday’s stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite advanced 0.7%. The small-cap Russell 2000 fell 0.15%.

For a second straight day, the Nasdaq hit resistance at the 50-day line, but this time recovered to close slightly above that level. The Dow Jones finished a few points below its 200-day while the Russell turned back at the 21-day line.

Market breadth was mixed, with winners leading on the NYSE but lagging on the Nasdaq.

Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.2%, slightly below its 21-day line. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW), downplaying the impact of megacaps like Nvidia, also edged up 0.2% to just below its 50-day

Some more stocks flashed buy signals Wednesday.

U.S. crude oil prices fell 2.9% to $83.49 a barrel. Gasoline futures sank 2.1% to $2.21, near 2023 lows.

The 10-year Treasury yield fell 6 basis points to just below 4.6%, down 19 basis points in the last two sessions. The two-year yield rose 2 basis points to 5%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.6%, with ADBE stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) jumped 1.1%, with NVDA stock the No. 1 component.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 0.7% and ARK Genomics ETF (ARKG) 1.2%. DKNG stock is a top-10 Ark Invest holding.

SPDR S&P Metals & Mining ETF (XME) edged up 0.15% and the Global X U.S. Infrastructure Development ETF (PAVE) advanced 0.95%. U.S. Global Jets ETF (JETS) lost a fraction. SPDR S&P Homebuilders ETF (XHB) stepped up 1.2%. The Energy Select SPDR ETF (XLE) fell 1.3%. The Health Care Select Sector SPDR Fund (XLV) declined 0.4%. LLY stock is an XLV member, but so are a number of hard-hit medical product firms.

The Industrial Select Sector SPDR Fund (XLI) rose 0.6%.

The Financial Select SPDR ETF (XLF) gained 0.15%.

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Novo Nordisk

NVO stock surged 6.3% to 98.84, a day after modestly moving off its 50-day line. It’s still actionable from the 50-day line, but getting close to being extended. Late Thursday, the Danish drug giant halted a phase 3 trial early, signaling that weight loss wonder drug Ozempic also treats chronic kidney disease.

Eli Lilly, which has its own weight-loss drug, jumped 4.5% to 605.28, hitting a new high as part of big surge from the 50-day line.

Meanwhile, dialysis firms sold off hard. DaVita (DVA) plunged 17%. Other medical products firms in the diabetes and cardiovascular spaces tumbled, continued their sharp retreats on the prospect of a fundamental, long-term decline in demand.

Adobe Stock

Adobe stock popped 3.2% to 549.91, extending Tuesday’s move just above the 50-day line within a flat base. The official buy point is 570.24, but the relative strength line is already a new high. Analysts had positive comments after Adobe unveiled new AI tools on Tuesday, including a new version of Firefly.

Nvidia Stock

Nvidia stock rose 2.2% to 468.06, continuing to advance from the 50-day line, but the rebound has come in light volume. On Tuesday, shares just closed above a 457.89 early entry. NVDA stock has a 502.66 buy point from a flat base, according to MarketSmith, its first real consolidation since January.

Sterling Infrastructure Stock

STRL stock climbed 2.6% to 78.54, extending Tuesday’s move above the 50-day line. That’s offering a buying opportunity. At the end of this week, Sterling Infrastructure is set to have a cup base with an 84 buy point. The consolidation came after a strong run from early May, including a big earnings gap-up in early August.

DraftKings Stock

DKNG stock flirted with a trendline entry Wednesday, but backed off the intraday high of 31.10, ending up 1.55% to 30.74. A move above Wednesday’s high would offer an early entry. Investors also could use the Sept. 11 high of 32.65 as an early entry, which would be above all the trading in the consolidation. The official buy point is 34.49.

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What To Do Now

Investors could have added a little more exposure Wednesday. The Nasdaq continues to advance, but hasn’t decisively cleared its 50-day line. Perhaps Thursday’s CPI inflation report can be that positive catalyst, but it could trigger selling as well.

A clear Nasdaq move above the 50-day line wouldn’t be an all-clear signal to ramp up exposure aggressively. The S&P 500 also could quickly hit resistance at the 50-day, while all the indexes face key hurdles along the way.

But if the market and your positions make progress, you can gradually add exposure along the way. So have your watchlists ready.

On the downside, the Nasdaq falling decisively below the 50-day and beyond would be worrisome. So have your exit strategies ready.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.

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