After a day of market activity, various stocks and indices showed interesting trends. Dow Jones futures edged higher after hours, accompanied by S&P 500 futures and Nasdaq futures. The CPI inflation report is set to be released early Wednesday, which could potentially impact the market further.

Unraveling the Dynamics of After-Hours Market and Key Stocks

Stock Market Rally and Key Indices

The stock market rally witnessed slim-to-modest losses on Tuesday but remained near record highs. The Dow Jones Industrial Average fell 0.35%, the S&P 500 index gave up 0.4%, and the Nasdaq composite slipped 0.25%. The small-cap Russell 2000 retreated 0.4%. The Dow Jones and Russell 2000 are testing their 21-day lines, while the Nasdaq, no longer extended, is still above all its moving averages. The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.6% and has been in a downtrend for four straight sessions. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) lost 0.8%. U.S. crude oil prices edged up 0.3% to $68.59 a barrel, and the 10-year Treasury yield rose two basis points to 4.22%, continuing Monday's bounce but still down sharply from mid-November.

Key Stocks and Their Performances

Alphabet stock, the parent company of Google, jumped 5.6% to 185.17, clearing a 182.49 cup-with-handle buy point. Its relative strength line topped a short-term high but is still well off highs. Shares surged as Google touted its new Willow quantum computing chip.Tesla stock rose 2.9% to 400.99, nearing the November 2021 record intraday high of 414.50. Morgan Stanley's Adam Jonas raised his TSLA stock price target, and Tesla EV registrations in China powered higher, offsetting weakness in the U.S. and Europe.Palantir stock reversed lower for a second session, down 2.2% to 70.89. Shares fell 5.1% on Monday after hitting a record 80.91 intraday. It remains the No. 1 S&P 500 performer in 2024, up 313%.AppLovin stock sank 6.3% to 321.06 and is moving toward the 21-day moving average for the first time in months. It dived 14.7% on Monday after missing the cut for joining the S&P 500 index, but is still up nearly 706% for the year.Nvidia stock fell 2.7% to 135.07, closing below the 50-day for the first time since September 20. Shares had briefly topped the 21-day and 140.76 buy point. It's possible that Nvidia stock will form a new, shallow base next to the prior consolidation, but the AI giant is not far from flashing sell signals.Taiwan Semiconductor stock fell 3.6% to 191.94, just holding the 50-day. Shares could be working on a handle to a shallow cup base. Early Tuesday, the chipmaker reported November revenue jumped 34% in local currency vs. a year earlier.Broadcom stock retreated 4% to 171.81, back below the 50-day line. AVGO stock has a 185.05 buy point from a double-bottom base next to another consolidation. Investors could use Monday's high of 180.79 as an early entry. Broadcom reports fiscal Q4 earnings on Thursday night.

What to Do in the Current Market

The stock market rally remains near record highs. However, growth names like Nvidia, Palantir, and AppLovin are struggling in the short term, except for a few exceptions like Tesla. It's a time to be cautious. If making new buys, be ready to exit quickly. But investors should still be heavily invested and keep looking for setups and potential entries, especially if the market pauses. If the selling in hot stocks continues or broadens to the wider market, be ready to curb exposure. Reading The Big Picture every day helps stay in sync with the market direction and leading stocks and sectors.Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

Stock futures find themselves in a relatively flat position on Tuesday night as investors prepare themselves for the impending arrival of crucial inflation data. This anticipation has led to a state of "waiting mode" in the market, with traders closely observing the upcoming November consumer price index reading. The Dow Jones Industrial Average futures have seen a modest rise of 18 points, hovering near the flatline. Meanwhile, the S&P 500 futures and Nasdaq 100 futures have each ticked higher by 0.1%, adding a touch of upward momentum to the market.

Anticipating the Inflation Data

Traders are eagerly awaiting the November consumer price index (CPI) reading due in the morning. Economists polled by Dow Jones expect this inflation gauge, which tracks a basket of goods and services, to show a 0.3% increase from October and a 2.7% rise compared to a year ago. Excluding volatile food and energy prices, the core CPI is projected to increase by 0.3% on a monthly basis and 3.3% from 12 months earlier. This data is set to provide valuable insights into the current state of inflation and its potential impact on the economy.Furthermore, the producer price index report is expected later in the week. These two major economic data releases are among the last significant ones anticipated before the Federal Reserve's policy meeting next week. According to CME's FedWatch Tool, fed funds futures are pricing in a more than 85% likelihood that the central bank will lower interest rates at that gathering. This expectation has added an element of uncertainty to the market, as traders try to gauge the future direction of monetary policy.Tuesday night's market action follows a losing day on Wall Street. The S&P 500 and Nasdaq Composite experienced their second consecutive down day, while the Dow had its fourth negative session in a row. This suggests that the market is still grappling with the uncertainties surrounding inflation and its potential effects on corporate earnings.Investment strategist Ross Mayfield at Baird believes that Tuesday's moves indicate that the market is in a state of waiting ahead of the CPI print. He also noted that market participants may have some concerns about what the inflation data might reveal. "You're just kind of seeing unnecessary consolidation of this momentum trade," Mayfield said. "Even though we think we're still in a bull market, there obviously needs to be periods of consolidation to kind of catch your breath."In addition to the inflation data, investors will also be watching for monthly federal budget data expected on Wednesday. On the corporate earnings front, they will closely monitor Adobe's results, which are slated for release after the bell.

Stock Movements in Extended Trading

Here are some stocks that showed significant movements in extended trading:General Motors - The shares of this automotive giant popped nearly 3% after General Motors announced that it would no longer fund robotaxi development by self-driving car company Cruise. This decision has sparked interest among investors and led to a surge in the company's stock price.GE Vernova - The energy equipment company saw a 3% slide after providing full-year revenue guidance for both the 2024 and 2025 fiscal years that was weaker than expected by analysts polled by FactSet. This guidance has raised concerns among investors and led to a sell-off in the company's stock.For a more comprehensive list of stocks in motion, please refer here.

Market Outlook and Implications

The current situation in the stock market highlights the importance of closely monitoring economic data and central bank policies. The upcoming CPI data and the Fed's policy decision next week are likely to have a significant impact on market sentiment and investor behavior. If the inflation data comes in as expected or better than expected, it could provide a boost to the market and lead to a rally. On the other hand, if the data shows higher-than-expected inflation, it could trigger a sell-off and lead to a more cautious approach from investors.Investors need to remain vigilant and adapt their strategies accordingly. While the market is still in a bullish trend, periods of consolidation and uncertainty are inevitable. By staying informed and making well-informed decisions, investors can navigate these challenging times and potentially capitalize on opportunities as they arise.In conclusion, the stock market is currently in a state of flux, with investors waiting for key economic data and central bank actions. The upcoming weeks will be crucial in determining the future direction of the market, and investors will need to stay focused and agile to make the most of the opportunities that lie ahead.