Dow Jones Futures Fall With Market Rally Still Missing This; Tesla Rises On

Dow Jones futures and S&P 500 futures fell slightly early Thursday, while Nasdaq futures edged lower, with Tesla earnings in focus. The stock market rally added to momentum Wednesday, led by techs and small caps.

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But while the indexes are showing strength, bottom fishing continues to lead the broad-based advance. There remains a relative lack of buying opportunities for now.

Tesla (TSLA) headlined key earnings overnight, with EPS topping but margins declining. Tesla stock rose modestly in active overnight trade.

Steel Dynamics (STLD) and Alcoa (AA) kicked off metal and mining earnings, with steelmaker Nucor (NUE) and copper giant Freeport-McMoRan (FCX) due early Thursday. United Airlines (UAL) touched down with results after the close with American Airlines (AAL) due before Thursday’s open. CSX (CSX) led railroad earnings, with Union Pacific (UNP) out early Thursday.

Alcoa earnings and revenue topped views, with the aluminum giant announcing a $500 million buyback. AA stock was solidly higher before the open.

Steel Dynamics profit and sales topped. STLD stock rose modestly after initially popping overnight.

United Airlines earnings fell well short of views, though revenue was in line. UAL stock fell sharply in extended action. American Airlines earnings and revenue were in line. AAL stock retreated modestly.

CSX stock rose solidly, signaling a move over its falling 50-day line, on strong Q2 results.

From CSX to Tesla stock, none of these stocks are near buy points. But they do provide some indication of sector strength in a difficult economic environment.

Meanwhile, health insurers struggled Wednesday after Elevance Health (ELV), formerly Anthem, warned of high medical costs. UnitedHealth (UNH), Another of those health insurers, is on IBD Leaderboard and the IBD 50.

Dow Jones Futures Today

Dow Jones futures fell 0.4% vs. fair value. S&P 500 futures lost 0.3%. Nasdaq 100 futures tilted lower. Tesla stock is a major Nasdaq component while UAL stock also is in the Nasdaq 100.

September crude futures tumbled more than 4% to nearly $95 a barrel. Gasoline futures plunged 6%.

U.S. natural gas prices fell 3%. Russia did resume natural gas flows through the Nord Stream 1 pipeline, but only at 40% capacity. Still, European natgas prices fell solidly.

Copper futures sank almost 2%.

The European Central Bank is expected to raise interest rates at 8:15 a.m. ET, with a half-point move likely.

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

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Stock Market Rally

The stock market rally extended gains, though they were weighted heavily toward techs and small caps.

The Dow Jones Industrial Average edged up 0.15% in Wednesday’s stock market trading. The S&P 500 index climbed 0.6%. The Nasdaq composite and small-cap Russell 2000 popped 1.6%.

August U.S. crude oil prices fell 1.9% to $102.26 barrel. September crude, now the new front-month contract, sank 0.9% to $99.88 a barrel.

U.S. natural gas prices leapt 10.2% amid renewed concerns that Russian gas supplies won’t return to normal, spurring more demand for U.S. liquefied natural gas. Cheniere Energy (LNG) and Flex LNG (FLNG) both made bullish moves.

The 10-year Treasury yield rose 2 basis points to 3.04%.

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ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.2%, with a number of medical stocks weighing on the FFTY. The Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 3.35%. The VanEck Vectors Semiconductor ETF (SMH) popped 2.35%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) leapt 5.1% and ARK Genomics ETF (ARKG) 3.1%. TSLA stock is a major holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) edged up 0.25%, with NUE stock, Steel Dynamics, Alcoa and Freeport-McMoRan all notable components. The Global X U.S. Infrastructure Development ETF (PAVE) rose 1%. U.S. Global Jets ETF (JETS) ascended 0.5%, with UAL stock and American Airlines big holdings. SPDR S&P Homebuilders ETF (XHB) advanced 0.55%. The Energy Select SPDR ETF (XLE) rallied 1% and the Financial Select SPDR ETF (XLF) inched up 0.4%. The Health Care Select Sector SPDR Fund (XLV) sank 1%.

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Tesla Earnings

Tesla earnings beat adjusted views in a second quarter marred by lengthy Shanghai plant shutdown and slow ramp-up due to Covid lockdowns. Earnings rose 57% vs. a year earlier to $2.27 a share. Revenue climbed 42% to $16.93 billion.

Both were significantly below Q1’s levels. However, analysts had expected Tesla earnings per share of $1.81 on sales of $16.539 billion.

Automotive gross margin fell to 27.9% from 32.9% in Q1 and 28.4% a year earlier.

Regulatory credits, which are essentially…