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Dow Jones futures rose Friday morning, along with S&P 500 futures and Nasdaq futures, after a huge market sell-off sent the Dow Jones, S&P 500 and Nasdaq composite to their worst levels since late 2020.
X
But futures slashed gains after Fed chief Jerome Powell said policymakers are “acutely focused” on bringing inflation back down to their 2% target.
Adobe (ADBE) fell on earnings guidance, while U.S. Steel (X) rallied on preliminary second-quarter earnings.
U.S.-listed Chinese stocks were big premarket winners. Hopes for economic improvement in China, and a favorable ruling for Ant Group, a digital financial giant closely tied to Alibaba (BABA) and its founder Jack Ma, boosted the stocks.
BABA stock surged before the open, along with fellow e-commerce giants JD.com (JD) and Pinduoduo (PDD). The iShares MSCI China ETF (MCHI) rallied 3.9%. The KraneShares CSI China Internet ETF (KWEB) jumped 6.4%.
China electric-vehicle startups Nio (NIO), Xpeng (XPEV) and Li Auto (LI) all rallied in premarket trade as well. China EV and battery giant BYD (BYDDF) was not yet active, but is close to record highs.
Tesla (TSLA) reversed fractionally lower before the open. The EV giant raised Model Y prices in China, a day after hefty U.S. price hikes on most of its EVs. TSLA stock dived 8.5% on Thursday to just above its 11-month low set on May 24.
Fellow megacap stocks Apple (AAPL), Microsoft (MSFT) and Facebook-parent Meta Platforms (META) have all undercut recent 52-week lows, along with the major indexes.
MSFT stock is on IBD Long-Term Leaders. LI stock is on the IBD 50.
Dow Jones Futures Today
Nasdaq 100 futures rose 0.2% after being up more than 1% before Fed chief Powell. S&P 500 futures rose 0.2%. Dow Jones futures advanced 0.2% vs. fair value. Losses by ADBE stock weighed against both the S&P 500 and Nasdaq 100.
The 10-year Treasury yield tumbled to 3.21% from 3.31% on Thursday. The 2-year yield fell to 3.1% from 3.16%.
U.S. crude oil prices fell 2%.
Bitcoin traded just below $21,000, after setting an 18-month low of $20,087.90 earlier this week.
Premarket 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
China Stocks
U.S.-listed Chinese stocks were big premarket winners.
China’s central bank has accepted Ant Group’s application to become a financial holding company, Reuters reported, citing unnamed sources. That could be a step toward the long-sought after initial public offering of the digital financial giant. China’s last-minute halt to the Ant IPO in late 2020 marked the beginning of the nation’s tech crackdown.
BABA stock jumped 10%, moving toward another test of resistance at its 200-day line, after reclaiming its 50-day line a few weeks ago.
JD.com stock leapt 9%, also advancing toward its 200-day line. The stock advanced despite Chief Executive Xin Lijun on Friday telling Bloomberg overnight that consumers are curbing discretionary spending, even after Shanghai ended lockdowns on June 1. But he did see a recovery over the second half of the year.
PDD stock popped 6%, set for another test of its 200-day line. Pinduoduo is China’s No. 3 e-commerce firm after Alibaba and JD.com.
China EV Stocks Climb
As for EV stocks, Nio stock climbed 4% and Xpeng 6%. Both have held support at their 50-day lines, but have some distance to get back above their 200-day lines. This week Nio unveiled its latest EV, the ES7 SUV. It’ll be Nio’s third new EV this year for a lineup of five vehicles.
Li Auto stock rose 6% to 33.70, with the EV maker on track for its sixth weekly gain. Shares are in a deep, long consolidation with a 37.55 buy point. A handle, the longer the better, would be constructive. The relative strength line for LI stock is at a 52-week high.
Li Auto will unveil a second hybrid sport-utility vehicle, the L9, next week, with deliveries starting in the third quarter.
BYD stock, which trades over the counter in the U.S., is not yet trading. Shares have retreated this week after nearing record highs. BYD stock has a 41.24 buy point from a deep cup base, according to MarketSmith analysis. But it’s working on a handle, which should appear on a weekly chart after Friday, with a 39.81 buy point. The RS line for BYD stock has just pulled back from a record high.
BYD, which wasn’t greatly affected by the Covid lockdowns, will release several new models in the next several weeks. It’ll begin Australia deliveries in the third quarter.
Five Best Chinese Stocks To Watch Now
Adobe Earnings
Adobe earnings rose 11% in the second quarter, while revenue rose 14%, both modestly topping analyst views. But the software giant guided low on full-year results. ADBE stock fell 4% before the open. Adobe stock hit a two-year low on Thursday.
Dow Jones Futures: U.S. Steel Earnings Guidance
U.S. Steel guided up on second-quarter earnings late Thursday. That followed strong preliminary results on the June-ended quarter from Nucor (NUE) and Steel Dynamics (STLD) earlier in the week.
U.S. Steel stock popped 8% before the open, but that would only cut big weekly losses. Nucor and STLD stock also are down for the week amid the broad market sell-off. If the economy does go into recession, steel demand and pricing would likely weaken substantially.
Tesla Stock
Tesla stock fell less than 1% before the open. On Thursday, shares dived 8.5% to 639.30. TSLA stock nearly undercut its May 24 low of 620.57.
Dow Jones Futures: Megacap Techs
Apple stock was little changed before the open after being up 1% earlier. So were Microsoft stock and META stock. All slid to 52-week lows on Thursday.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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