Stocks Fall On AI Retreat, Powell Comments. Hinge, Rocket Lab, Bloom Energy In Focus.

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0:16Good afternoon, everyone, and welcome to Stock Market Today. My name is Ken Shreve. On today's show, we'll talk about a little bit of selling in the stock market today, not so much on the Dow Jones Industrial Average and in small caps, but selling was mostly concentrated on on the NASDAQ composite. We had Fed Chairman Jerome Powell give a little speech in Rhode Island today. So we'll get into all of that. But let me bring on our esteemed news editor, Ed Carson, who, as usual, has got three stocks to watch for today. Yeah, I'd like to take a look at Hinge, Rocket Lab, and Bloom Energy. You know what?

0:50I realized I did not even do my NASDAQ chart here. So let me see if I can... And I'll just speak about Fed Chief Powell for a moment. He basically talked about, yeah, an answer to a question, said, yeah, equity values are sort of high. He didn't sound especially concerned, you know, but that did seem to trigger some selling. There's also some selling in AI-related names. And so I just – that was something that was out there. But maybe investors were looking for a reason to take profits in some highly valued NASDAQ stocks. All right. Well, I appreciate that. Let's start by talking about the NASDAQ composite.

1:27Three straight up days. We see the NASDAQ. Looks like volume is going to be a little bit higher than what we saw on Monday. But, Ed, NASDAQ was down nine-tenths of a percent, almost one percent. So pretty tough days for NVIDIA and Amazon. Where else was the weakness today in tech land? There were some other losses like Astero Labs and some other things. It was just sort of mixed. Shopify had a bad day. You know, there's some names. Other things still did fine. They bounced back nicely. So it wasn't like all across the board, but there was definitely some selling there. NVIDIA, you know, had sort of lead gains yesterday.

2:02And a lot of those hardware names fell back today after the open eye boom, you know, boost yesterday. Very good. Well, let's take a look at the S &P 500. Didn't fall as much as the NASDAQ. But we can see the S &P 500 down about a half a percent. and then selling fairly muted in the Dow Jones industrial average today. Even, like I said, Amazon and NVIDIA, which are now members of the Blue Chip Index, Dow Jones was only down about one-tenth of one percent, had a nice gain from Boeing. And then let's take a look at IWM. This is small caps. The IWM was up as much as one percent early in the day. It ended slightly lower.

2:50And so the market got a little bit jittery over what Jerome, Fed Chairman Jerome Powell said in Rhode Island today. What was the gist of where the market, what did the market not like about what he said? Well, most of what he said was pretty standard, you know, but then in an answer to a question, he said that, yeah, OK, equity prices are fairly highly valued. But he just didn't sound like somebody who was that worried about it. I mean, I think everybody would acknowledge stock prices are pretty high, and especially some of these AI names. It doesn't mean that they can't. They didn't sound particularly worried.

3:20You could argue that maybe today was sort of constructive because the NASDAQ was getting just a little extended by some measure. I just mean, I don't want to go crazy. Yesterday, it closed 6.2 percent above the 50-day line. Normally, when we say it's above 5 percent, it's starting to get a little extended. Risks of a pullback. Today, it fell back to about 5 percent. Again, it wasn't like a screaming, oh, no, we're all going to, you know, it's all super top signal or anything. It was just something to note because the higher it gets extended, the more likely a pullback is and that it could be bigger.

3:52So maybe today was constructive. I mean, you know, it just sort of there was a little bit of a give back. You know, it's hard to get too excited when all the major indexes hit new highs except for the NASDAQ. And it was only because it was only like a point away from it. So it's, you know, we're all right there at record highs. Yeah, yeah. And, you know, we mentioned higher volume on the NASDAQ. Not that much higher. You can see volume is probably just going to creep up a little bit higher than what we saw on Monday. So this would be probably put on the distribution date count. We've only had two higher volume declines on the NASDAQ.

4:25So still looking at a market that is not under distribution here. Let's take a look at market breadth because breadth was slightly negative. Not too much, though, maybe three to two negative on the NASDAQ, close to that on the S &P or on the New York Stock Exchange. RSP still moving sideways here near all time highs above its 50 day moving average. This is the equal weighted version of the S &P 500. And then QQEW, you know, the NASDAQ 100 is filled with a lot of large cap tech names. QQEW looking very similar to RSP, just kind of moving sideways and floating near highs here. Ten-year Treasury yield under a little bit of pressure today after finding support near that 4 % level.

5:24And let's take a look at how leading growth stocks did in the market today. Yeah, the NASDAQ was down about 1%. We see the FFTY innovator IBD50 ends a four-session winning streak, Ed, but down 1.6%, but still holding above its 10-day moving average here. Yeah, there were some big losers in FFTY. There's also some big, there's some decent winners too. I mean, but I guess I'd also know just like this was getting a little extended. I mean, you know, it was like 11 % above the 50-day line. The last couple of times the FFTY topped out was when we got to about 11, 12%. So it was just sort of just nice to see maybe that come off a little bit today.

6:07Just a little bit, just so we don't get so in like, and also just to cool people's heads, just to remind people, I think investors should be thinking, and we'll look at one stock that might give a reason to do that, but with highly extended stocks that are way above their moving averages, consider taking partial profits, or at least at the very least, you have to know how are you going to scale out of a stock that is really surging. You have to find your style, but you should know how you want to exit some of these names. Yeah, especially if you're sitting on some big gainers since that follow-through day.

6:40All the way back in April, that's when all the big market leadership started to emerge. So having an exit plan is important. And that's been something we've been mentioning in the big picture in recent days. Nothing wrong with trimming some of your big winners. You're probably still finding a lot of your big winners that are holding above their 10-day and 21-day line, just like the FFTY ETF here. But yeah, just doing a little trimming, Not such a bad idea here. SMH still just has been a monster performer here. We mentioned weakness in NVIDIA, but this one is closed just modestly lower. Actually performed better than the NASDAQ today.

7:28Yeah, looking very strong. Yep. And then IGV. This is our software ETF filled with several enterprise software names. So still seeing a lot of underlying strength in this market. It's rare where we're seeing the NASDAQ down 1 % on a given day. But in light of where that index has come from, fairly orderly decline today. Still seeing some financials doing well in the market here with XLF. And you can kind of see how market leadership has really broadened out nicely here. This looks like an outside day, typically not a good sign, you know, but it did really make a nice gain early in the session.

8:18Did reverse lower for a loss of a half a percent. Two big-weighted stocks here, I believe, are JP Morgan and Goldman and XLF. Yeah. Berkshire is a big one, too, which owns a lot of banks, too. Yeah. Berkshire is also a big holding there. And then the industrial ETF, still seeing a lot of strength in the Dow XLI, setting up for what looks like a pretty tight base here. And maybe this could yield a breakout. We'll see. Yeah, the only thing about both of these is that the relative strength line has lagged. So clearly there's been a tech and AI leading, but other areas are still doing well. It's nice that the lagging areas are still doing pretty well.

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9:38Well, the session did serve up some breakouts today, not a huge amount, but let's start by taking a look at Hinge Health, H-N-G-E. Tried to break out with conviction over the 60 level, maybe got pulled down a little bit by the broad market, but we'll see how this breakout plays out. What are you seeing here in Hinge Health, Ed? Yeah, first I'd have to disclose that I have a position in this. I sort of see a base here. I mean, because of the way it was, it's basically a base, you know, with a high of 62. And I sort of treated the 60 area as that looks like a handle. I bought it off the 21-day line a couple of days ago.

10:20But there's a trend line if you do from the top of the handle, really, and it's pretty much this, you know, downtrend from the top of the base, which also sort of almost works, you know. And so it did, it's right around that downtrend. So it could still be actionable. Yeah, it's disappointing it came off its highs, you know, but a lot of stocks did. I mean, a lot of stocks reverse lower. So, you know, I like the volume that it's had the last few days as it's tried to make a move here. Definitely, you know, this is an IPO. It's elevated versus the 50 day line. There's a lot of, you know, it's not profitable yet.

10:53There's a lot of, you know, or there's a lot of things that could, this could easily sell off very quickly. and uh so i mean i mean this is not like oh yeah this is a this is a this is a no-brainer it's like you you know not at all but i just like the way it's looking it's trading relatively tightly the last few weeks uh you know after that horrible bar in the in the middle of that base it's bounced back pretty nicely so again it's just i'm just trying to find some things there's not a ton of new buys a lot of stocks are extended but you know it made a base paused again moved up You know, it's made nice progress.

11:27The 10-week line is coming up to it. So I think it's interesting. The first, it was weird stuff in the adjust. There was a lot of compensation in that first report. And so the stock market, the stock rallied off of that. So, you know, you don't get too worried about that jaw-dropping loss in the latest quarter. The revenue growth is what to look at, I think, here. Yeah, most definitely. This is a company that came public in May, I believe. The expected range was supposed to be 28 to 32 and actually priced at 32 at the high end and currently trading at 59.60. So it's been a very successful debut for Hinge Health.

12:03This is basically an online physical therapy platform. They also do a lot of work with musculoskeletal work as well. But seeing a lot of nice top-line growth in recent quarters, like you mentioned, Ed. All right, let's move on and take a look at Rocket Lab. This is another stock that tends to swing wildly, but Rocket Lab is in a good setup here. Let's first start by looking at the daily chart here.

12:41There we go. So maybe some erratic price action, but a nice move today. Looks like it moved back above a prior buy point. This is so tough. This is one of these stocks that's so tough because it's made some moves. And then just as it really gets into these actionable areas, it has had some really big sell-offs, a couple of really big ones, including one last week that it came, breaks out, goes up, and then boom. It has found support at the 21-day, 10-week line fairly consistently. and so that's a positive but it makes it tough is this one to buy off the 21 day line but it would have been hard to buy off the 21 day line it's just not so strength here i mean look this could easily the market rallies this could easily go go go but you know it would would it would it surprise anybody if this falls eight percent tomorrow and goes down to the 50 line not not really i don't think that would be very much in character so uh i i like the look of it but at the same time, this is not a buy and hold situation.

13:43Got it. Got it. Yeah. And Rocket Lab, not profitable yet, but you can see a really, really strong record of top line growth here and huge increases in fund ownership in recent quarters. At the end of Q2, 539 funds in this name. That's pretty much almost double what it was a few quarters ago. So and you can see the weekly chart here, a little breakout back in this area and then just showing good, solid support right at the 10-week moving average here. Relative strength line up near new highs. So this is still a stock to watch, still seems to be attracting a fair amount of buyers. Let's finish by taking a look at A-Lab.

14:33This is an AI stock growing very quickly. Actually, Bloom Energy. Earlier, I had wanted to look at – Oh, I'm sorry. I talked about looking at this one, but I think Bloom – Sure. And that's BE, which is a stock that came under quite a bit of pressure today. Let's see how it held up here. bloom energy down uh down 10 after five up sessions in a row and just a tremendous breakout over that uh 29 level this was all the way back in july so probably a stock that's ready to take a breather here like a lot of other stocks for that matter yeah and this is where like well where do you take profits and you can take them on the way up on the way down you know after i made that last move off the 10-day line maybe about you know two or three weeks ago it really got extended from even the 10-day line.

15:25And even today, it fell 10%. And even at the lows of the day, it didn't hit the 10-day line. So that's one of the issues. I'll sell at the 10-day line. We're all selling at the 21-day line. Well, how far do you have to go when it gets that extended? Where is the sell signal? So that's why, personally, I try to take some off in these situations a little bit on the way up, even though I know it might continue to rise because there's a good chance if it's that extended, it's going to roll over and I'm going to end up selling about where I was sold early on anyway, that to me, it makes it easier to hold a core position, but also feel comfortable to sell if it really does break lower.

15:59It's like, okay, I got it. I got out a pretty good price, but you have to find out what works for you. If some people say, no, no, I don't want to sell until it goes over and that's fine. But I don't know how that, and Ken, I don't know if you want to weigh in, but it just seems like that's the kind of thing you have to figure out what works for you. It's definitely an art versus a science on these kinds of things. Oh yeah, no, absolutely. For those that bought at this breakout, obviously this is not a hard stock to hold at all. So I would say that people that got in on this name down at this level could certainly afford to wait for a test of the 10-week moving average.

16:39If you got in a little bit later, maybe it's going to be a break of the 10-day line. Maybe it's a break of the 21-day line. But you can see after multiple up weeks in a row, yes, on the one hand, this stock is showing us that it has the potential to be a big market leader. So if you're still holding the stock for a gain, you really do want to give this a little room because all the volume that came in on Bloom Energy during this weekly win streak has been quite impressive. And that has fueled its highest possible A-plus accumulation distribution rating. So clearly a stock under accumulation here, probably ready to form a base.

17:18And if it can hold gains and continue to show strength, you know, we'll probably most likely see an alternate entry here. Just be careful not to chase it. Could we also take a look at Micron after the close? Sure, yeah. Because they had earnings. Thank you very much. Yeah, we have Micron on leaderboard. And this is a stock that I own personally along with leaderboard. And it is making a nice move in after markets. It reminds me a little bit of Broadcom because we had Broadcom on leaderboard. It had rallied sharply ahead of earnings, and then it continued higher after earnings. Micron was quite extended ahead of earnings.

17:58It's given back some of those after market gains, but up 1.5%. Have you had a chance to go through the numbers here yet? Just the skimmed. I mean, yeah, who knows where this will go. So, I mean, I could imagine this one being down a lot or up a lot, you know, like when we actually get through tomorrow, but easily beat views. And they had raised guidance about a month ago. So they're beating raised views. And they also guided higher. And there was expectations that they would guide higher for fiscal 2026. So strong growth. It'll be interesting to see what they have to say on comments. If there's anything there that will say, aha, no, it's really they have a great opportunity or no, no, they're saying this about pricing.

18:36So we'll have to wait to see. But this is important for AI, general chips, data storage, just a lot of things, chip equipment names that supply a lot of things to Micron. So this could be a big mover, not just for Micron itself, but for a lot of other names in the market. This may not be a bellwether like NVIDIA, but it is a bellwether, no doubt about it. And you've got two other really strong performers in this group. We have Western Digital, WDC has been a huge price performer in the data storage group, and also STX, Seagate Technology. So the data storage group, along with Micron, filled with strong performers.

19:25All right. Well, that will do it for today's show. And Ed, always great to have you on. Appreciate your insight as usual. All right. And that'll do it for today. Don't forget, Rachel Fox has got your back tomorrow on IBD Live. You can go to investors.com slash IBD Live for more information about our morning stock market show. I'll be in the host seat on Thursday. So be sure to join us if you haven't checked it out yet. Investors.com slash IBD Live. I'll be back here tomorrow with Ed for another Stock Market Today video. So we'll see you back here tomorrow. Thanks.

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