S&P 500 Runs To Highs; Nucor, Hewlett-Packard Enterprise, Caterpillar In Focus

0:00Look, when people start to gamify investing, right? So when you think about people being rewarded with balloons and fireworks for trading, which we know is the more you trade, the worse offer you're going to be in the long run. I'm Joe Davis.

0:12Ed Carson:And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard.

0:31Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today. It's Alyssa Korman, Ed Carson here, and a notable day of power for the stock market. And as always, some notable stocks to talk about and a lot of earnings to cover after the close. Ed, great to see you. Great to see you. Yeah, big day on Wall Street. I want to take a look at Nucor, Hewlett Packard Enterprise, and Caterpillar. Okay, we will take a look at those stocks. But first, a closer look at the major indexes, a big breakout for the S &P 500 with that index up 1.8 % on the day. The Dow with a similar gain here up 1.7%, a couple of days in a row of some notable upside action.

1:18Ed Carson:Ed and the Russell 2000 up about 1.9 % after clearing a trend line yesterday that we noted. And the NASDAQ led today with the tech heavy index up some 2.6%, clearing a couple of key notable technical levels. Yeah, really a lot of strength. I mean, the only negative was NASDAQ volume was below average. So this wasn't what we would call a fall-through day. But I think if you look at the totality, the NASDAQ making this clear move over the 50-day line and short-term highs. The four-day advance, I think, was 8.8%, which I believe is the best four-day advance since April of 2025. So, you know, this was not – you can just sort of eyeball it.

2:07You know, there's been some four-day gains out there, but there was a big move here. You combine that with the S &P and Dow hitting new highs, RSP hitting new highs with the equal weight, IWM for the Russell 2000 hitting a closing high. And it was pretty clear this is not the other rallies. Like if you look at the NASDAQ, go back to the June and July two-day, three-day rallies are modest. This is four days. Not that that's a magic number, but four days and much more power. and while there's still a lot of repair like ai stocks a lot of those names are still below their 50 day line or just around that that level there's there were more stocks showing strength it just seems different than other times when we've tried to bounce this one feels like uh something more meaningful doesn't mean it has to be i mean you know the next few days are earnings and the jobs report that could all sink it but looks like something different i think investors need to take that and maybe look into add exposure, at least incrementally, get going on that process of adding exposure.

3:10Ed Carson:Yeah, absolutely. And then just a note on the volume you were talking about versus the average. And for something like a follow-through day, we get a lot of questions on this. We do focus on the volume versus the prior session, because sometimes you can get below average volume that's higher than the prior session. So one of those little technicalities there. So on the homepage of investors.com, as well as on leaderboard and market surge, we do look at that volume comparison versus the prior day, whereas a lot of our charts are looking at the volume versus that 50-day moving average. So just a little note there, but I love what you covered, Ed, in terms of all of those key levels that we have been talking about.

4:00Ed Carson:And we are checking off some boxes on our trend change checklist, getting above the 21-day, getting above the 50-day, a couple of days now with the low above those levels. We'll continue to see if that progresses. Round number of 26 ,000. And I love also that marked high that we took out. So I feel like that now would be a level that we would want to ideally stay above. And if not, at least that$26 ,000 in the 50-day line. But let's see if those shorter-term moving averages can start to turn up and stack in the proper direction. But a very impressive snapback here after a shakeout. And Ed, just really quickly before we move on, some traders out there might be lamenting selling at this undercut.

4:57But I think that risk management is so important,

5:03Ed Carson:right? That instead of just blindly continuing to hold, I mean, when markets top, this is how they start to top, right? So you don't know how much lower you can go. But I think where the real mistake would be is not shifting gears back, right? So I don't think it was wrong to raise cash. But if traders here are caught off guard by what we're seeing over the last couple of days, I think that's where we really need to be thinking, okay, what's my strategy? Because I think that's the bigger thing here, the bigger mistake to avoid. Yeah. And yeah, because you can always catch back and oh, you lose a few percentage points as opposed to, oh, wait till it drops.

5:48What's a tunity liner? And then what? And then when this becomes, well, now I really have to wait. No, no, it just gets worse. And something that you bring up often, you don't have to do all at once. It's sort of like if you see traffic ahead, you start tapping on the brakes a little bit. You just sort of like, you know, you don't, as opposed to going 80 miles an hour and then just slamming on the brakes. If you do that, yes, maybe you would have sold some on that last day. And that happens. Okay. That happens. but that's what it's like you know that's why we talk about scaling out in parts so you don't end up selling on the last day because it can be hard to handle there were definitely opportunities and reasons to sell on and and a lot of on the ai stocks a lot of them are still not back and and and even if ai stocks do come back it doesn't mean your stock comes back i mean selling stocks that were breaking down you may have an opportunity to buy something else now maybe that price is a higher, but it's in a better market.

6:40So yeah, it's just that you have to do risk management. Now there's more positive signals. And now, again, don't go zero to 100. Be adding exposure incrementally. If the market keeps on telling you, if this is a rally that has any legs, if it goes for a couple of months or longer, then waiting a day or two, you don't have to get everything all at once. Just do it methodically. And you can add exposure pretty quickly, even if without doing it recklessly. Isn't home where we all want to be? Reba here for Realtor.com, the pros number one most trusted app. Finding a home is like dating. You're searching for the one.

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7:37Ed Carson:And then, Ed, what are your thoughts on some of the catalysts at play here? We've been talking a lot about the cross currents or the various variables the market has been thinking about. What are your thoughts on this shift? Of course, there are just technical things that we're looking at, but what are your thoughts on that aspect of this rally? I mean, clearly oil coming down is a positive and that also brings down treasury yields, which is sort of related. So those are two things because there's like and there's something there was some positive earnings. There were some reports about maybe banning Chinese gear.

8:15And so that helped you, you know, other, you know, optical and networking gears and stuff. but it's also like look last week the market i mean the market had sold off on google earnings and then amazon then it took off on honestly on amazon earnings that had a lot of similar things only not as good to be quite frank i mean just if you look at some of the guidance i think but whatever the market is now happy with these things it seemed like the market was selling everything and every day and there was other things going on maybe capitulation selling hedge funds, Asia, whatever. I mean, you know, who knows?

8:50But it just seemed like there was a mindset, oh, now we're happy with the hyperscalers again. And because it just seemed like nothing they could do would make anybody happy. And all these stocks were just selling off, selling off. It just seems like a vibe shift. Oh, now we like this now. You know, oh, okay. And that's just sometimes how it is. It's like, and it's why you don't want to, it's like, you don't try to reason with an elephant going after you. You get out of the way or maybe you get on it when it's going up. So yeah, those seem to be some of the catalysts, but a lot of it just seems like a vibe shift.

9:21We now like some of the things that was hitting the market a few days ago.

9:27Ed Carson:Exactly. I mean, you were pointing out so correctly how it seemed like for the hyperscalers, the spending concern, it's like, well, if they spend more, it's unsustainable, but if they're not keeping up with the spending, And then what does that mean for the AI build out? So, yeah, it does seem like I get the vibe, better vibes. Yeah. Over there. All right. Good stuff. Let's proceed and talk about some various areas of the market. We'll just go quickly through these, Ed. So let's start with the chips repairing, but more repair work needed. Yeah, more need. Needs to get over the 50-day line. A lot of AI stocks like this.

10:10Some stronger, some weaker.

10:12Ed Carson:But hey, good participation, right? Yeah, absolutely. So, yeah, good to see that participating. Because that was also, I think, the concern over the last couple of days is we weren't really seeing, you know, quite the same level of participation there on the rally. But today, for sure, chips with a big gain at 5.6%. IGV, the software sector, continuing to improve here. So also good to see for the bulls. Software up 4.7 % today, continuing the move back above the 200-day line. Here's the Transports, IYT, a nice move. Transports. And a lot of these groups that we're going to look at here are showing this kind of, they weren't like the leaders today necessarily, but some bullish moves and definitely stocks in these areas that have been acting well, maybe, you know, some of them being actionable in these various groups that we're going to look at.

11:00Ed Carson:All right. You can continue to zip through and I'll just punch these up at here's industrials. Industrials. I mean, some of this is AI related. Some of this is aerospace related because there's some aerospace also did well. But yeah, there's just so you want to be looking beyond. Don't I wouldn't say everybody pile in certainly not in AI yet, but even just to tech generally, there's a lot of things that are working out there and you don't know how things are going to go. So this is nice. ITA, not necessarily the most attractive pattern, but you can see getting some clear resistance. XBI doing well, it's interesting.

11:32This was doing well, found support right where you'd like to, breaking a trend like, whereas XLV, if we want to use that as sort of a proxy for defensive or defensive growth, a lot of, and not just in medical, but also otherwise, there's just some of the drug makers, some of the insurers and beyond medical, they're just sort of fading a little bit. And that's just not terrible. And they might be fine, but there's a risk on mentality. And so this was always the concern. If you go defensive, there's the risk that, well, when you go back on offense, you've got the wrong personnel, as it were, out on the field.

12:06Ed Carson:Yeah, exactly. This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination-focused dining, and cultural enrichment on board and on shore. And every Viking voyage is all-inclusive with no children and no casinos. Discover more at viking.com. Okay, we ready to get to some stocks, Ed? Absolutely. Okay, let's go to Nucor. Tigger in UE breaking out up 4.9 % on the day. So this steel producer turning in a breakout from a cup with maybe a quasi-handle. Yeah, there was a handle. There was a tiny one that would have showed up if it didn't break out today, but could have bought it there, bought it, all those things.

13:01Yeah, this was nice because it sort of popped on earnings, then it ran up almost to highs, and then paused just a little bit. And that was just nice. And it's also nice given where the market is because it would have been tougher to buy. It was hard to buy anything. Okay, yes, maybe the market was starting to rally, but man, on day one of a rally attempt, it's hard to get that enthusiastic, even in areas that were working well, because we had sector rotation, and you saw it sort of popped up, and then it hit resistance. So you didn't know, you know, that was happening to a lot of stocks. You'd buy things, and then they'd fall off.

13:31Okay, but now it's paused. Now it's moving just when you'd like it to, honestly. So that was nice. This was the stock of the day. Relative strength line, you know, I don't know if on a weekly, it's pretty close to a high, you know. It'd be nice if we were at a high, but this has been acting well. Yeah, so nice action here. And the growth is really strong. Accelerating on the revenue side, you know, has been high double-digit or triple-digit earnings growth, a lot to like.

14:00Ed Carson:Triple-digit earnings growth, I agree. And the relative strength has been strong for a while. And this is a non-tech area. So also good to keep that in mind for the portfolio. Let's also take a look at HPE. Now, this is a tech stock that has held up well amid a lot of damage in the tech and AI space. It did have that kind of funky reaction to earnings in that late May, early June timeframe there. Filled a lot of the gap, but held above the 50-day line. So maybe this was a case of a stock that just got too overheated in the short term when a lot of the AI and chip stocks were doing that. But I think impressive to see how it held up over the following couple of months.

14:53Ed Carson:This 50 area, pretty key resistance, level to clear. It did that today, Ed. Yeah, I think that sort of says it all. And one thing is that this peak basically right when the market peaked. So the euphoria was at its highest. So you can imagine if earnings had been a week later, that it wouldn't have gapped up like that. You know what I mean? But there's sort of a draw the line breakout that you could do here. There aren't many AI stocks. So if you want to play AI stocks, this is one of a handful that was clearly, I think, moving above a buy area today. I mean, you know, you can find a few others, but not too many.

15:26Most of them are, you know, or they have earnings coming up. So this one I see. I will say the Super Micro has earnings next week, and that's a competitor. So there's always that risk, you know, how that is. But HPE doesn't have earnings for a while. Just show to action here. I would, again, I wouldn't pile everything into AI for sure. But, yeah, nice action here. There's definitely been a pickup. There's, you know, pickup and growth, you know, is out there. So nice, nice performance here. Mm-hmm.

15:58Ed Carson:And an RS line blue dot on the weekly. So we see that when the relative strength line, which is measuring a stock's price performance versus the S &P 500, when that's hitting a new high as the stock is basing or as it's breaking out. But I definitely wouldn't wait for this to get to new highs before taking action. It seems like this is where you would want to take action for sure. Yeah. Okay. Let's continue forward and Ed, get your take on the next stock we want to highlight. Caterpillar. Earnings are out and we'll take a closer look at the daily chart here up 5.6 % on the day. But I think this is a great case of where it pays to actually look at the chart and not just the percent gain, right?

16:52Ed Carson:Because the chart adds so much to the story. It hit resistance at a flattening 50-day line. so that's not positive action there even though you would think oh the stock up five five point six percent earnings growth accelerating what's not to like well it looks like to me caterpillar needs a little more work to shape up here not quite a butterfly yet that's for sure yeah it was like yeah if if you know maybe in a day or two it does punch higher and then you reevaluate Oh, it goes through there and it goes through the 50-day line decisively. I mean, that sometimes happens because it was a nice percentage gain if you think about it.

17:34So it wasn't, you know, but yeah. And this is also about earnings. You want to wait. And this also just goes for any AI, any of these stocks that are coming up to their 50-day lines that happened before. What happens, you know, when they do that? You know, there's stocks that were coming up or above their 50-day lines. Well, what happens, especially with a bunch of earnings coming out? will they hold and really move forward, you know, above and decisively provide some buying opportunities or will they reverse lower? I mean, those could end up almost be shorting opportunities. There's again, reason why we care about these moving averages because they don't always succeed.

18:07I mean, the thing about a test is that you can fail. And so again, there's always a do over, you know, you, maybe it'll come back in two days, but yeah, again, I like the fundamentals. There's a lot of positives about it. This would certainly could come back, but yeah, I want to watch out. Don't buy right at the open. Make sure that the stock is really, especially at these key levels, make sure that it actually gets above there. Yeah.

18:33Ed Carson:I think that's a really great reminder as we are still in the thick of earnings season. We've seen, I mean, the market today and in Monday session two kind of gapped up and continued to run, but you're not going to see that with every gap up and every earnings move. So being a little patient at the open, or if you really do want to be aggressive, go small, right? Or incremental. And if the stock continues to work, then you can continue to add to the position. But yeah, we really want to be careful of those fades. And we'll be looking at more earnings reactions here momentarily. Ed, so where do you want to start?

19:20Let's start with SpaceX. And honestly, they beat views. It was a small unexpected loss, strong revenue. It's down. I don't know why. I'll be honest. We'll just have to see. It made a nice two-day move. There's so many things going on. We're covering this on live blog and there'll be conference call. There's just a lot of things. But it's down right now. That's all. You know, I don't really have much more to say about that. AMD. Yeah, it's down 5 % there.

19:48Ed Carson:And then AMD, we'll check in on that one, also down 5%. And right at that 50-day line, you know, it's like, and so is that, can that hold that? We'll see. They beat views guided higher. Initially, this popped. This was initially up after hours. And so we'll see. Maybe it'll be up again. So there didn't seem to be anything wrong with this report, but it's run up a lot in the last few days. So we'll see. Okay. And then continuing forward, we have ANET, Arisa Networks. This had a great couple of days heading into the report, and look at that, up 13 % after hours, Ed. Yeah, it was already getting to be sort of extended, depending on how you look at it.

20:23Now it's going a lot. Looks really strong. This was one of the ones that really moved out first. It was just hard to do anything with it heading into earnings, But nice move here.

20:33Ed Carson:And yeah, this has shown that it can make moves in the past and outperform. And we were seeing that outperformance over the last couple of weeks, but kind of a messy pattern. So that kept me away, even though it was in a really strong industry group. But yeah, 12 % move, not too shabby on earnings. Here's a lab in the Semiconductor Fabless group, up 4%. it was able to get back above that 50-day line today. Let's see what's holding. This can swing a lot. It was up more than 10 % a few minutes ago. But yeah, this is at a very key level. A lot of attention comes to this name. Just trying to think about some other names that are moving a lot, or like Travere, TVTX.

21:20This one's making a nice move, going to bounce off the 50-day, 10-week line, maybe get up toward a breakout. So that's nice action there. Hinge Health. You know, this is, this I think missed on EPS, or this was a mixed result. So we'll see. It's going to come back, maybe test the 50-day line. Qualys QLYS. And that is a, you know, that one's, we haven't talked about this too much, but it's another cybersecurity name that's showing strength. And it's going to clear this area. I don't know exactly what you make out of it, but there's a lot of them that have an actor on it. So it's nice to see that.

21:55Yeah. And then this one isn't the best looking one, but this group has a lot of earnings coming up. Flywire, F-L-Y-W. And again, it was making a move, then it's done that. But, you know, it's still a positive sign for the payment stocks. And there's tons. There's tons tomorrow morning. And obviously, these things could swing all around before the open. But a lot of earnings and a lot in the AI and biotech space over the next couple of days. Amgen didn't seem to be moving much, but right at a buy point. So that'll be just even a modest move can make a big difference for that stock.

22:31Ed Carson:Yeah, I would say of the ones that you mentioned, Ed, and I know there's a ton, it seems like the one that's in position to be the most actionable or, you know, the best looking setup coupled with the best reaction, at least as of now, after hours would be the TVTX in that revenue biotech industry group that we have now. So we'll have to see. We know that overnight action doesn't necessarily always translate to the regular session the following day, but we'll keep this one on our radar. I know we've got that SpaceX Live blog and your futures column to look forward to. I know you'll be on the hunt to cover the most compelling earnings reactions.

23:16Yeah, absolutely. So a lot going on. So keep paying attention, readers. sign.