Dow Jones Futures Signal Market Rally Isn’t Finished After Key Support Broken

Dow Jones futures rose early Wednesday morning, along with S&P 500 futures and Nasdaq futures. The stock market rally came under further pressure Tuesday, with the major indexes all falling below their 50-day moving averages and leading stocks struggling.

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A surprising jump in job openings raised expectations for big Fed rate hikes, triggering Tuesday’s market retreat. Crude oil and natural gas prices plunged, sending energy stocks tumbling, with other commodity plays also retreating. Antero Resources (AR), Steel Dynamics (STLD) and CF Industries (CF) all tumbled below buy points or early entries. Hot chip names such as Photronics (PLAB) have sold off hard.

Investors should be looking to reduce exposure and cut losses.

Enphase Energy (ENPH) is holding up well, but is testing a key level. Pinduoduo (PDD) is holding near a buy point after Monday’s earnings gap, but is somewhat on its own in terms of Chinese internets. Celsius (CELH) is finding support at its 21-day line.

Meanwhile, Apple (AAPL) undercut its 200-day moving average. Tesla (TSLA), which had hit resistance around the 200-day line, is now heading toward its 50-day line.

After the close, CrowdStrike (CRWD) reported better-than-expected second-quarter earnings and revenue, with the cybersecurity firm also guiding modestly higher. CRWD stock edged lower in overnight trade. Shares dipped 0.5% to 62.83 in Tuesday’s regular session, just above the 50-day line. CrowdStrike stock is well below its sliding 200-day line.

CELH stock and Steel Dynamics are on IBD Leaderboard. Tesla stock, CF Industries, Celsius and Enphase Energy are all on the IBD 50. CF Industries and ENPH stock are on the IBD Big Cap 20. Enphase is Tuesday’s IBD Stock Of The Day.

The video embedded in the article discussed Tuesday’s market action and analyzed AR stock, Steel Dynamics and Pinduoduo.

Dow Jones Futures Today

Dow Jones futures climbed 0.5% vs. fair value, while S&P 500 futures advanced 0.5% and Nasdaq futures rose 0.7%.

Crude oil futures rose slightly.

A China manufacturing index rose 0.4 point in August to 49.4, slightly better than expected. That’s still below the break-even 50 level.

ISM’s U.S. manufacturing index is due Thursday morning.

Remember that overnight 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

Stock Market Rally

The stock market rally briefly tried to find its footing, but then broke through key support levels on strong economic data. The major indexes did close off session lows.

Job openings unexpectedly rose in July, the Labor Department reported Tuesday, after a big upward revision to June. That signals heavy, unfilled demand for labor. That will keep wage-price spiral fears high, even as gasoline prices tumble and goods prices retreat. On Friday, the Labor Department will release the August jobs report.

The Dow Jones Industrial Average fell 1% in Tuesday’s stock market trading. The S&P 500 index and Nasdaq composite lost 1.1%. The small-cap Russell 2000 gave up 1.4%.

U.S. crude oil prices tumbled 5.5% to…