The stock market began a holiday-shortened trading week on a tough note yesterday, with the S&P 500 and Nasdaq tumbling on Tuesday. In fact, the S&P 500 had its worst session of the year on Tuesday. As we look toward the rest of the week, there are concerns that the selling pressure could accelerate. That has us looking at some hot stocks for tomorrow.
Earnings continue to dominate the tape, but so does the Fed and so do the economic reports.
While we’re working on a short week, volatility is picking up as the S&P 500 quietly works on its third-straight weekly decline. Although investors have enjoyed a strong start to the year, things are getting very real, very fast.
That’s as the dollar continues to rise, as do interest rates. And now, inflation isn’t slowing as quickly as many had hoped.
So, let’s look at a few hot stocks for Thursday, Feb. 23.
Hot Stocks for Tomorrow: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) will be in focus tonight as well as on Thursday morning. That’s because the company will report earnings after the close on Wednesday, Feb. 22.
Not only is Nvidia one of the closest followed semiconductor stocks out there, it’s also one of the most closely watched tech stocks in general. With a $500 billion market capitalization, it’s not hard to see why.
NVDA stock has been enjoying a robust rally. From the October low to this month’s high, shares have climbed more than 112%. Even from the 2023 low, shares have exploded higher by more than 64%.
What management has to say about the semiconductor space will likely play a big role in how NVDA stock trades for the next three to six months — and possibly longer. It will also likely have an impact on Advanced Micro Devices (NASDAQ:AMD).
The Chart: On the upside, bulls want to see Nvidia regain $215, putting $230 or higher in play. On the downside, they want to see it hold the $185 to $190 area and the 10-week moving average.
Lucid Group (LCID)
At one point, Lucid Group (NASDAQ:LCID) was being referred to as the next Tesla (NASDAQ:TSLA). So far, that hasn’t really panned out, although the company does turn out a pretty good product and is one of the few up-and-coming electric vehicle (EV) stocks that seems to have longevity.
In any regard, Lucid will report earnings after market close today, so it will be on many traders’ radars on Thursday.
Investors will not be focused on the bottom line so much as they will be focused on deliveries, production and revenue growth. In that sense, they will want a positive outlook for fiscal 2023.
They will also likely want some sort of comment in regards to the buyout speculation we’ve seen over the last month. While LCID stock has faded from the highs on that rumor in late January, I’m sure there’s still some hope baked into the share price.
The Chart: The ideal trade would fling LCID stock back over last week’s high of $11.27. In doing so, it would also put shares back above the 10-day and 21-day moving averages. If it can do that and hold above $11.27, it opens the door to $12.50, then the 200-day moving average.
On the other hand, let’s see if LCID can hold $8.50 on the downside and thus, the 78.6% retracement and 50-day moving average.
Hot Stocks for Tomorrow: SPDR S&P 500 ETF Trust (SPY)
Last but not least, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) will be on watch on Thursday. That’s because the Federal Reserve will release its Federal Open Market Committee (FOMC) results on Wednesday afternoon.
At 2:00 p.m. Eastern, the Fed minutes will release and detail the group’s most recent discussions. Given January’s stronger-than-expected jobs report and the higher-than-expected CPI and PPI reports, investors are growing nervous about the potential for more rate increases.
Fed funds futures are beginning to price in a 50 basis point increase at the Fed’s next meeting (although the base case is still a 25 basis point increase). The market is also beginning to take the Fed’s “higher for longer” commentary more seriously.
In any regard, the market has been under pressure lately, now working on its third weekly decline. Wednesday’s Fed meeting has the potential to ease the recent pain — or to drastically increase it.
The Chart: On the downside, bulls are hoping that $396.50 holds, which is the 50% retracement and 50-day moving average. If it fails, it could summon the $390 to $391 level before finding support. On the upside, let’s see if SPY can gain any traction over $400. If so, last week’s low could be in play near $404.
On the date of publication, Bret Kenwell held a long position in TSLA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.