Futures Rise Ahead Of Key Data; Hot AI Stock Crashes On Earnings

The Dow Jones Industrial Average fell Thursday after key economic data, with the release of ADP’s employment report and the Labor Department’s weekly jobless claims. Meanwhile, hot AI stock C3.ai (AI) crashed as much as 24% after its first-quarter earnings report.


ADP’s employment report showed May jobs growth of 278,000, much stronger than the expected 160,000 figure, but still down slightly from April’s 296,000 number. ADP’s report is a precursor to Friday’s jobs data from the Labor Department.

Meanwhile, initial jobless claims rose to 232,000, slightly below the 235,000 forecast vs. 229,000 in the previous week.

Further, the PMI manufacturing index came in at 48.4, slightly below the 48.5 estimate. Finally, the May ISM manufacturing index fell to 46.9, below the 47.0 estimate compared to April’s 47.1 reading,

C3.ai, which preannounced some fiscal fourth-quarter results in mid-May, issued a full-year fiscal 2024 revenue outlook that missed analyst estimates. The stock had rallied more than 20% this week, but is poised to lose most of it.

Other key earnings movers include Chewy (CHWY), CrowdStrike (CRWD), NetApp (NTAP), Nordstrom (JWN), Okta (OKTA), Salesforce (CRM) and Veeva Systems (VEEV).

Chewy shares jumped 20%, while CrowdStrike reported April-quarter profit and revenue that topped analyst estimates. CRWD stock tumbled 8.5% as growth in a key metric, annual recurring revenue, slowed.

NetApp rallied more than 6% in early trade, as Nordstrom stock moved up 9.3%.

CRM stock sold off almost 8%, while Veeva shares surged 13%. Also, Okta plunged 19% in early morning trade.

Stock Market Today

Lucid Motors (LCID) skidded 13% after announcing a $3 billion stock offering and a separate private placement. Electric-vehicle giant Tesla (TSLA) traded almost 2% lower Thursday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after today’s stock market open.

Arista Networks (ANET), IBD Leaderboard stock ASML (ASML), Cloudflare (NET) and Taiwan Semiconductor (TSM) — as well as Dow Jones stocks Boeing (BA), Cisco Systems (CSCO) and Salesforce (CRM) — are among the best stocks to buy and watch in the stock market uptrend.

Arista was a recent IBD Stock Of The Day, while ASML and Salesforce are IBD Leaderboard stocks. And Cisco was featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Thursday’s opening bell, the Dow Jones Industrial Average fell 0.3%, while the S&P 500 rose 0.1%. The tech-heavy Nasdaq composite gained 0.2% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 0.1%, while the SPDR S&P 500 ETF (SPY) fell 0.15% early Thursday.

The 10-year U.S. Treasury yield on Thursday traded down to 3.58%. On Wednesday, the 10-year yield fell sharply for a second straight day.

U.S. oil prices dropped Thursday morning, extending this week’s losses. West Texas Intermediate futures lost 0.5% Thursday, sending West Texas intermediate futures below $68 a barrel.

Stock Market Action

On Wednesday, the Dow Jones Industrial Average lost 0.4%, while the S&P 500 dropped 0.6%. The Nasdaq composite also lost 0.6%, easing from its 2023 highs.

Wednesday’s Big Picture column commented, “So, for tech investors, after a tawdry 2022, the first five months ought to feel a whole lot nicer. But in this tale of two equity markets, blue chips outside the tech realm have truly been mixed.”

Now is an important time to read IBD’s The Big Picture column after the recent bullish change in the market’s outlook.

Five Best Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Cisco, Boeing, Salesforce

Dow Jones networking giant Cisco Systems is building a cup base with a 52.66 buy point. Keep an eye out for a potential handle, which would show an earlier entry. CSCO stock declined 1% Wednesday, snapping a three-day win streak. CSCO stock fell 0.4% Thursday.

Dow Jones aerospace giant Boeing climbed 0.5% Wednesday, closing back above its 50-day line. Shares are still forming a flat base with a 221.43 buy point, according to IBD MarketSmith pattern recognition. BA stock moved up 0.6% early Thursday.

Salesforce rallied past alternative entries at 194.01 and 200.10 in recent weeks, according to Leaderboard analysis. Meanwhile, its relative strength line hit a new high Wednesday, a bullish signal. Shares reached the 20% profit zone from a 178.94 cup-with-handle entry, so investors would be justified to take some profits ahead of the company’s first-quarter results late Wednesday.

CRM stock tumbled more than 6% Thursday morning. Late Wednesday, Salesforce reported April-quarter earnings and revenue that topped analyst estimates as operating margins improved amid cost-cutting spurred by activist investors. Its revenue outlook only edged by views.

4 Top Growth Stocks To Watch In The Stock Market Rally

Best Stocks To Buy And Watch: Arista, ASML, Cloudflare, TSMC

Networking giant Arista Networks fell sharply below its 171.54 buy point during Wednesday’s 4.6% drop, according to IBD MarketSmith pattern recognition. ANET stock gained 0.5% Thursday morning.

IBD Leaderboard stock ASML remains just out of buy range past a 683.28 buy point in a cup with handle despite Wednesday’s 0.7% fall. ASML rose 0.6% Thursday.

Cybersecurity leader Cloudflare broke out Wednesday past a 66.30 buy point in a double bottom. Shares closed in the 5% buy area, which runs up to 69.62. NET stock moved down 1.7% Thursday, heading lower in sync after earnings from CrowdStrike and Okta.

Chip foundry Taiwan Semiconductor dropped 3.3% Wednesday, falling back into buy range past a double-bottom’s 95.92 buy point. The 5% buy area runs up to 100.72. TSM stock climbed 1% Thursday morning.

Learn How To Time The Market With IBD’s ETF Market Strategy

Best Stocks To Buy And Watch In Stock Market Rally

These are four best stocks to buy and watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Buy Point
ASML (ASML) 683.28 Cup with handle
Salesforce (CRM) 200.10 Consolidation
Boeing (BA) 221.43 Flat base
Arista Networks (ANET) 171.54 Cup base
Source: IBD Data As Of May 31, 2023

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla Stock

Tesla stock rallied 1.4% Wednesday, moving closer to a cup base’s 207.89 buy point. The stock is above its long-term 200-day line for the first time since Sept. 21. Shares closed Wednesday 35% off their 52-week high.

TSLA stock looked to add Wednesday’s gains, but turned lower Thursday morning, falling 1.7%.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares edged lower Wednesday, snapping a four-day win streak after hitting a new 52-week high at 179.35. The stock continues to hold sharply above a 157.48 buy point and is out of the buy range that ran up to 165.35. AAPL stock fell 0.1% in morning trade Thursday.

Microsoft shares reversed from new highs, falling nearly 0.9% Wednesday. They traded as high as 335.94. Shares have reached the 20%-25% profit zone from a 276.86 flat-base buy point, so investors could take at least some profits here. On Thursday morning, MSFT stock was down 0.8%.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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