Dow Falls As Oil Jumps, But These Sectors Rally; HF Sinclair, Dell, Axsome In Focus

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0:59Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, July 8th. My name is Ken Shreve. And, boy, another interesting day for the stock market. More drama from the Iran-U.S. war. We had oil prices spiking this morning and bond yields were higher after President Trump was not happy with the situation in Iran this morning, threatening more strikes against Iran. We'll talk about everything that was going on at the open. NASDAQ was down 1.1 percent early. It did a very good job of pairing losses. S &P 500 came to within five points of its 50-day moving average. It also closed off low, so a lot of headlines in the early going.

1:57But before we get into all of that, let me bring in our news editor, Ed Carson, who has got three stocks to watch as usual. Ed, good afternoon. Good afternoon. I'd like to take a look at refining stock HF Sinclair, Dell Technologies, and Axum Therapeutics. Okay, let's take a look at those stocks. Yeah, we had a lot of interesting headlines at the open. So let's go ahead and just take a look at what happened in the market today. I mentioned the NASDAQ was down pretty sharply in the early going here. We had President Trump not happy with Iran in the early going. NASDAQ was down 1.1 % in the early going.

2:44It did reverse higher, ended with a gain of 0.2%. Semiconductor stocks did bounce back pretty impressively. NVIDIA had a really nice day. That was one of the best gainers in the NASDAQ 100. Let's take a look at the S &P 500, which I mentioned came pretty close to a test of its 50-day moving average, came to within five points of its 50-day line. That also closed nicely off lows, actually managed to close above all of its short-term moving averages. It was down just three-tenths of 1%. Really, the selling today was focused in the Dow Jones Industrial Average, which reversed lower yesterday. That is now testing its 10-day moving average.

3:36The Dow Jones was down a little over 1 % today. The Dow Jones laggards in the blue chip index today. American Express took a pretty good hit today. Boeing was another big decliner. But I mentioned NVIDIA. Let's just take a quick look at NVIDIA. That was a nice gain for NVIDIA today. Nice move back above the 200 level. And then let's take a look at the Russell 2000 because that also was under some selling pressure today. Russell 2000 actually went below its 21-day exponential moving average today, small caps, under some pressure here, down nine-tenths of a percent. So, Ed, obviously, chip stocks under a lot of pressure today.

4:25They did bounce back a little bit. So that did help lift the NASDAQ composite back above a short-term moving average here, but still below the 50-day moving average, still below that 26 ,000 level. So still on a downtrend here and still got some resistance to punch through here, but not such a bad recovery for the NASDAQ today. It's not. At the same time, I think that, I mean, and you can also say, well, it's starting to get a little tighter. I mean, some of the swings were still in this range, but some of the ups and downs, little said the S &P looks somewhat similar, like within a range, but a little tighter.

5:00On the other hand, we're still in a range. And, you know, the thing is, the reason why we say trade in an uptrend, I don't want to be too, I say this sometimes, because you will tend to trend up. And right now, you can't really say that. And while the NASDAQ and S &P, they look OK, they're tightening up. On the other hand, that's partly because, well, software has been rallying when chips are down and chips are rallying when software is down. So it smooths some of those out. But some of the sectors have had some big swings and we've seen sector rotation. And today we had the real world economy stocks fall, which we'll get into a little bit.

5:33So it just makes it tough. It's hard to find a trend with the market. It's hard to find a trend with stock sectors or individual stocks. So, you know, I think investors should be very cautious about new buys. There are some buy signals out there in various sectors. There always are, it seems like. But, you know, it's just tough. If the trend isn't really there and there's a lot of volatility, there's just a good chance that, especially if you buy on strength, that the next day it'll be down. I mean, that's the problem. With an uptrend, you go up, you expect to go up again. But in a shopping market, you go up, you sort of expect, well, aren't we going to go down again?

6:07and that just makes it very difficult to make money on. Maybe in a week we'll all know. We'll all know that, oh, it went up to$30 ,000 or we fell to$24 ,000 or something, but we don't know that right now. Yeah, yeah. Well, we woke up to a sea of red this morning. It looked like it was going to be kind of tough sledding in the early going here. the situation between the U.S. and Iran was not looking pretty good. President Trump saying he's not really sure he wants to make a deal with Iran at this point. Iran firing missiles at commercial vessels, and that prompted some retaliatory strikes from the U.S.

6:53in recent recent days. And, you know, it could have been a lot worse today. But somehow the market is still optimistic that this 60-day ceasefire is still going to hold here. What do you make of the situation today? That's what it's been the whole time. The market has been convinced that there would be a deal. I mean, crude oil came tumbling down well before the interim deal. I mean, was sort of this weird ceasefire. It's worked. I mean, it's worked. And I think the market, President Trump has alternated between very bellicose rhetoric and then switching off, sometimes in the same day, talking about a peace deal.

7:33So, you know, if it carries on, I mean, oil could go up a lot higher. Oil went up and actually oil came off its highs. It hit resist, you know, the USO sort of tracks that. Oil was up more than 7 % at one point. It ended up more than 4%, a big gain, a big gain over the last few days. But you can see how much USO has fallen. I mean, so if we really went back to a shooting war, I mean, we could go way up above 150. I mean, if we want, you know, if we got to say, you know, if we started talking about ground troops and stuff like that. So I think the market is pricing a little more risk, but still believes that there's going to be a deal.

8:09I mean, that seems to be the thought. I mean, it doesn't mean it's going to be true, you know, I mean, but that's what the market is still betting, even though, yeah, they're hedging their bets a little bit, you know, with prices coming up. But But yeah, oil came off highs. I will say that gasoline and diesel went up a lot more. Well, gasoline rose more and diesel rose a lot more, in part because Russia is going to halt exports of diesel. And that's partly because Ukraine has been knocking out so many refineries that they need to keep the diesel at home for their own use. So diesel went up 10 percent today.

8:41So that's one reason why refiners did so well, which we'll get into. But yeah, tough thing for energy. We'll see. It still seems like markets are still relatively optimistic about everything. Yeah. Well, last check, oil trading around$73.50 a barrel in electronic trading. Like you said, it was up around 4.5%, but it was up a lot more than that earlier in the day. We had, you know, earlier it looked like bond yields were spiking. It looked like oil prices were spiking, and that was not a good mix for stocks. But it ended up that 10-year Treasury yield, not too much movement today. It was up about three or four basis points all day.

9:24It got up close to 4.6%, closed a little bit off highs today. We did have the Fed minutes released at 2 p.m. Eastern time today from the meeting last month. Not much new there, Ed. Fed members are still divided about whether or not how aggressive they should be with rate hikes. Not much new in the minutes today. Yeah. And the thing is, it's going to be so dependent on what happens. I mean, it was oil prices that have been pushing up treasury yields again in recent days. And so that's what drove it. It just is so much in flux. If oil is in a couple of months, is that a hundred bucks? Well, we're probably going to get a rate hike.

10:02If it comes back down, back to where we've been a week or two ago or even lower. Well, you know, I think a lot of people would say probably not. But so it's hard, you know, what the Fed thought about last June, there's just so much going on. It's even, you know, this is where when Fed Chief Warsh says, I'm not a big fan of forward guidance, this sort of explains it. It's like, what are things going to be like in two months? What is the guidance worth? I don't know. Yeah, yeah. Well, some of your industry groups that are sensitive to oil prices were under some pressure today. Of course, your cruise line operators were under pressure.

10:38Sure. Airline stocks were under pressure, too, but we have Delta Airlines reporting earnings on Friday, going to be really kicking off earnings season. Delta Airlines under some pressure today, down one and a half percent. But we wanted to take a look at Jets. This is an ETF that tracks the airlines. Jets had a pretty orderly pullback today, Ed, down to its 21-day moving average. It was down 2.2 percent, but held support at the 21-day line. And it looks like it's retesting a prior buy area. So as far as a pullback goes, this one looked pretty good today. Yeah. I mean, when you consider the refined products, I don't know what kerosene or jet fuel was, but probably even more than oil prices, given what the other ones did.

11:25So, yeah, all in all, pretty positive. It could have been a lot worse. But, yeah, so. Hi, this is Alex Osula, host of the WSJ's What's News podcast. We bring you the biggest news of the day, from business and finance to global and political developments that move markets. If you're looking for more insights and tools to understand the latest headlines, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash what's news to subscribe now. Delta earnings are going to be really important, but yeah, nice action today all in all. Delta is the top holding of JETS 2, so we'll see what Delta has to say.

12:08Friday morning, transports have been getting a little bit of a bid as money has rotated here. The transportation average ETF, IYT, that also came down and tested its 21-day moving average. That has still holding in a buy zone after a recent breakout over that 83 level today. So just a look at IYT. Nice pullback to the 21-day line. Financials under some pressure today, Ed, as well. We have this regional bank, ETFKRE, in the leaderboard model portfolio. It has been trending pretty well headed into today. It was a little disconcerting to see volume pick up the pace today and pretty sharp drop down to the 21-day line.

13:00Volume did pick up the pace. What do you make of the weakness in financials today? Yeah, I'm not quite sure. Treasury yields rose pretty evenly on the two-year and the 10-year, so it's not like the spread narrowed. Maybe just concerns about Fed rate hikes, concerns about the economy from higher oil prices that could have impact. but this is you know it's it's this is where it wants to find support there's a lot of these banks and of course all the giants will be reporting next week but a few of the super regionals as well so it'll be a big week coming up i was uh just kind of looking over the earnings calendar for for next week and it really is amazing uh the number of money centers that are reporting next week.

13:43I mean, just Tuesday, Tuesday alone, we've got before the open Citigroup, Goldman, JP Morgan, Bank of America, and Wells Fargo, just Tuesday before the open. So it's very busy next week. And then for tech stocks, we've got ASML, Taiwan Semiconductor, and also Netflix. So pretty busy week, pretty busy week next week. So financials under some pressure today, as well and also wanted to take a look at xhb this is the home building etf that was under pressure that got knocked all the way down to its 50-day moving average today so home builders look like they were ready to get going but they have been under pressure for several days in a row now higher higher treasury ultimate it's just it's pretty much as simple as that i think Yep.

14:39So, yeah. And then the defense ETF, ITA, lots of lots of movement in the ETA in the ETF space today. This also under some pressure. This recently broke out, also testing its 50 day moving average today. And then the two ETFs that we talk about a lot, the SMH that we talked about, semiconductor stocks, a big reason why the NASDAQ was able to pair that 1.1 % intraday decline and actually reverse slightly higher. SMH reversed higher above its 50-day moving average today. That ended a little bit higher. I think it was a 2 % gain for SMH today. Again, NVIDIA, strong day, and Broadcom also nicely higher.

15:29And then the software ETF IGV, that lagged after reversing lower, but held support pretty close to its 50-day moving average. Still seeing some outperformance from some software names, so an area that is still seeing some outperformance, although it did lag a little bit today. All right. Well, we want to take a look at some individual stocks here, starting with the outperformance in oil and gas today. Specifically, oil and gas is a big sector, but we saw some particularly good performance among the refiners. So let's start with D-I-N-O. That's the gas station I go to here in Southern California, the Green Dinosaur, H.F.

16:16Sinclair. Sure. Beautiful breakout for H.F. Sinclair today. D.I.N.O. Yeah. The only concern is like, you know, because it's like it's sort of getting extended from the 50 day line already and it's already at sort of the edge of the buy zone. Yeah. Probably people would have wanted if they could have snapped into this early. Probably was the way to go. It did. The relative strength line looks great. You know, that's something that that's come on quite a bit, hitting a new high. So a lot of positive action here. you know yeah refiners that the margin they they love the spread between crude prices and then the refined prices and gasoline and especially diesel much bigger jumps in oil prices just it's just going to feed to the bottom line for these things you can see that the growth is really ramped up on the profit side and even now on the sales side because the price gain is so much that's how what's happening here is that even though probably volumes aren't going to change that much.

17:10I mean, but just a huge thing. These things are cyclical. There was a big profit increase last year, big one this year. You know, you never know where it's going to go off of this, but nice action here. And this group was really moving today. The first quarter earnings are right down here at the bottom. You can see first quarter earnings were up 356 % year over year. Second quarter earnings going to be coming out fairly soon. Second quarter profit expected to be up 136%, which should be a little bit of a slowdown from the huge growth seen in Q1. But look at the revenue growth Ed was just saying.

17:51It is expected to accelerate, pick up the pace from Q1 up 32%. In terms of the breakout, yeah, this one is already close to being extended. This blue shaded box here is just highlighting the 5 % buy zone. So HF Sinclair already near the top of that 5 % buy zone from that 74-72 pivot. So strong breakout, but we'll see if it is going to hold in this 5 % buy zone, maybe get a little low volume pullback. But this has been a longtime leader in the refining group, but nice breakout for HF Sinclair today. All right, let's take a look at a big tech leader, and that is Dell, which is still selling a lot of PCs, but their big growth phase right now is in AI servers and just really growing like gangbusters in the AI server space, D-E-L-L.

18:47This is a stock that tried to break out over a little trend line today, and it came up a little bit short, but still a name that we're looking at because it is really holding gains well after that earnings gap and kind of just holding support right at the 21-day line here, showing a lot of relative strength. This had an interesting day. One, if you first go to the weekly, you know, in addition, yeah, there's that trend line is also the 4444. But on the weekly, this is going to have a base after this week. So that will have a new buy point. And I sort of feel like 444 is almost effectively the actual one because there was a sort of weird up and down.

19:30Didn't have much trading, sort of a draw the line kind of breakout. But the trend line or sideways. Anyways, intraday it was interesting because this one, while most stocks, most AI stocks sort of came on later, like they rebounded late in the day, Dell came on very early if you did a five-minute chart. Yeah, it was a five-minute. Yeah, and it just moved out very quickly, but then gave up all of its gains. Look at that. And then rebounded somewhat again. This was the open right here. Yeah, so real powerful move. But within about 10, 15 minutes, it was reversing lower, gave up all the gains, but then came back.

20:10So that was a little tricky. So it could have caught some people there, though, if you did that, you know, it didn't close too far off of that. But, you know, this is generally held up better than most. And it hasn't, despite the volatility today, it hasn't been that volatile compared to a lot of names. You know, it's ATR is 7.7, but that's honestly smaller than a lot of names. And it hasn't made these huge breaks and huge swings up in it. It doesn't feel like that the last few weeks. It's basing after a big, big run. The RS line is still near a new high. You know, this is great. Surging, basing, the RS line is still pretty close to highs.

20:50It's pretty close to ideal. If it got back up to the trend line, maybe back to 444 would be another way. that would seem very, very actionable right now. Yeah. And if you wonder why a stock like Dell can can trade so beautifully and hold on to gains, I mean, it just really doesn't take much to understand the fundamentals here. I mean, this this company, if you look at, you know, look at what they did in the fourth quarter, earnings up 20 percent, revenue up 11 percent. Three months later, their earnings up 45%, nice acceleration. Look at the revenue up 40 % versus three months ago, revenue was up 11%.

21:29Look at what they did for the June quarter here, up 214%. I mean, the acceleration is just unbelievable. And this growth is expected to continue for the foreseeable future. So this AI story, growth story that a lot of different companies and a lot of different areas of AI is very real. So Dell is really, really benefiting and price performance has been really incredible. And you can see the stock on the weekly chart, how well it has trended in recent months. Beautiful breakout here and just really trading tightly and holding onto these gains and a nice base setting up here as well. All right, let's take a look at a biotech stock.

22:21And biotech stocks continue to work quite nicely. Take a look at Axome, A-X-S-M, Axome Therapeutics. So it sort of found support just above the 10-week line. I think it rebounded from the 21-day line earlier this week. It pulled back a little bit today. Biotechs weren't really gaining today. This wasn't a day for biotechs. But it sort of feels like yesterday's high would be a place you could enter fairly close to the 21-day line and 10-week line. It's got a mini consolidation. It certainly isn't long enough by any means to be a base. But the growth is very strong on this one. It's supposed to be even stronger next year.

23:04But you can see real improvement, just a really impressive top-line and bottom-line growth that's happening. It's just sort of shifting towards profitability. Actually, you know, actually, I'm sorry. It's supposed to shift to profitability next year. I meant to clarify that. The top line has been great. The losses have been narrowing, but that shift to profitability is happening. So it's been consolidating very nicely and trading up after a breakout a couple months ago. So this one, again, trading fairly tightly, ATR below 4%. That's not tiny, but especially with the volatility we've seen in the market, I think that's pretty tame.

23:40and makes it much easier to manage risk. You know, you can get up and get a cup of coffee, and this probably, barring a news headline, isn't going to swing 7%, which honestly, if I go and make coffee with some of these stocks that I've owned or looked at, it's like, yeah, they can go up or down 7 % just with the market swings, not even, you know, not any news. You can go to bed and sleep for four or five hours straight, too, owning a biotech like this. Yeah, exactly. So, but it's, you know, so this one has been doing very well. And so the fundamentals and technicals acting well, it'd be great if it formed a new base.

24:19Hey, I got no problem with that. That'd be even better. But if it makes a move here, I think that that would be actionable. Pretty amazing. A stock that has been losing money. It's totally, you know, common to see biotechs not making money. But this is going to, they're going to turn their first big profit in 2027. Look at the revenue growth, even though they were losing money. They have been generating a lot of revenue in recent quarters. So pretty, pretty compelling story here. And another example of a stock after a breakout, this green line here is the 21 day exponential moving average. And a lot of leading stocks, whether they're biotechs or, you know, chip stocks or whatever, Leading stocks and leading groups tend to use this green line here, the 21-day line, as a support level during uptrends.

25:11And that's what Axome has been doing. Then we go to the weekly chart here and see that this has been a nice leader in the biotech group for some time. And on the weekly chart here, coming down, and this red line here is basically the 50-day moving average on the weekly chart. So we just call it the 10-week moving average and a key support level on the weekly chart here. So another outstanding performer in the biotech sector. We certainly have seen a lot of leadership on that front. Absolutely. Okay. Well, that is going to do it for today. Ed, thanks so much for bringing the three stocks as usual.

25:57I think I'm going to see you back here same time, same channel. See you then. All right. Take care. That's going to do it for today. And Rachel was in the host chair this morning for IBD Live. We'll get a double dose of her tomorrow as well for the Thursday edition of IBD Live. I believe it's going to be the same Thursday crew. They have you covered. So be sure to go to investors.com forward slash IBD live. If you haven't checked out our morning stock market show, we get underway every morning at 920 a.m. Eastern time. We go for a good solid hour, hour and a half every morning talking about the market news, sector trends, individual stocks.

26:46You can check out a two week trial at investors.com slash IBD live. And so we hope to see you there. Again, Ed and I will be back here tomorrow for another Stock Market Today video. Hope you have a great afternoon, everyone. We'll see you back here tomorrow. Take care.

27:18Hey, this is Telus Demos. And I'm Miriam Gottfried. We're reporters at The Wall Street Journal and the hosts of WSJ's Take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now. This show is for informational and educational purposes only, and nothing should be construed as a recommendation to buy, hold, or sell any securities.

27:55Any securities and investment strategies discussed may not be suitable for all investors. Make sure to consider consulting with your financial advisor before making investment decisions. Fusion powers the sun and stars. General Fusion is working to bring the zero-carbon abundant energy source to Earth. As global electricity demand surges, Fusion has the potential to deliver clean, scalable power for a growing world. Proudly NASDAQ listed, General Fusion is the first publicly traded pure-play fusion energy company in the world. With its magnetized target fusion technology and operational demonstration machine, General Fusion is advancing toward commercialization, targeting a first-of-a-kind fusion plant around 2035.

28:32Learn more at generalfusion.com.