Dow Jones Futures: Stock Market Rally Reverses Higher; Tesla Austin’s ‘Cyber

Dow Jones futures tilted lower overnight, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) is holding a “Cyber Rodeo” at its Austin plant Thursday night, with Model Y deliveries expected to begin.

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The stock market rally tested key support levels Thursday morning as Treasury yields continued to climb amid continued hawkish Federal Reserve statements. But the major indexes rebounded to close slightly higher.

Investors should be paying attention to sectors that are working but be cautious about new purchases overall. Exxon Mobil (XOM), Lockheed Martin (LMT), Horizon Therapeutics (HZNP), Dollar General (DG) and O’Reilly Auto (ORLY) are five stocks in leading sectors that are in or near buy points.

Tesla stock is on IBD Leaderboard. Tesla and HZNP stock are on the IBD 50. XOM stock is on the Big Cap 20, a list dominated by energy and commodity plays right now. ORLY stock was Thursday’s IBD Stock Of The Day.

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures and Nasdaq 100 futures edged lower.

The 10-year Treasury yield fell 1 basis point to 2.64%.

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 actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally sold off in the morning but then rebounded for slim gains.

The Dow Jones Industrial Average rose 0.25% in Thursday’s stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite edged up less than 0.1%. The small-cap Russell 2000 fell 0.4%.

U.S. crude oil prices dipped 0.2% to $96.03 a barrel. Natural gas prices jumped to their highest close since December 2008.

The 10-year Treasury yield rose four basis points to 2.65%, a fresh three-year high and widening the yield curve slightly.

St. Louis Fed President James Bullard, one of the more hawkish policymakers, said the fed funds rate, currently at 0.25%-0.5%, should be at 3.5% to fight high inflation. The Federal Reserve is likely to raise rates by 50 basis points at each of the next three policy meetings, with balance sheet reductions kicking off after the early May event.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.6%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 0.9%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.45%. The VanEck Vectors Semiconductor ETF (SMH) closed just above break-even.

SPDR S&P Metals & Mining ETF (XME) rallied 2.2% and the Global X U.S. Infrastructure Development ETF (PAVE) tilted higher. U.S. Global Jets ETF (JETS) descended 1.4%. SPDR S&P Homebuilders ETF (XHB) slipped 0.5%. The Energy Select SPDR ETF (XLE) rose 1.1%, with XOM stock a major component. The Financial Select SPDR ETF (XLF) dipped 0.1%. The Health Care Select Sector SPDR Fund (XLV) gained 1.9%

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 1.2% and ARK Genomics ETF (ARKG) sank 0.7%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.

Five Best Chinese Stocks To Watch Now

Exxon Stock

Exxon stock rose 1.7% to 85.05, continuing to consolidate around its 21-day line and just above its 10-week line. Investors could buy XOM stock here or if it tops the March 25 high of 85.49. The oil major should have a proper base after the end of next week.

Several other energy stocks are holding up, including Exxon peers Chevron (CVX) and Shell (SHEL) as well as coal producer Arch Resources (ARCH) and the North Shore Global Uranium ETF (URNM).

Lockheed Stock

Lockheed stock advanced 2.4% to 465.51, clearing a short-term high as it works on a short consolidation. But LMT stock is 4.9% above its 21-day line and 10.1% over its 50-day. Shares could form a new base by the end of next week. A longer pause would let the major averages catch up.

Lockheed stock broke out in late February as Russia’s Ukraine invasion began. Shares raced higher for a few days as investors bet on higher defense spending in the short and long term, especially in Europe and especially on weaponry.

Northrop Grumman (NOC), General Dynamics (GD) and Raytheon Technologies (RTX) are also consolidating, with RTX stock already boasting a flat base.

Horizon Stock

Horizon stock popped 3.2% to 112.39, breaking above a 110.13 handle buy point in a consolidation going back to late October. That 110 area was short-term resistance at the end of last year.

Several biotechs and drug stocks have been showing strength. Vertex Pharmaceuticals (VRTX), Regeneron (REGN) and Eli Lilly (LLY) are now extended, while Pfizer (PFE) is flashing a possible trendline entry. More broadly, medicals are doing well, with health insurers hitting new highs and device makers building the right side of bases.

Dollar General Stock

Dollar General stock rose 1.1% to 241.69, hitting a record high and climbing within a buy zone. On Wednesday, DG stock jumped 4.2% to…