Dow Jones futures will begin trading Sunday night, along with S&P 500 futures and Nasdaq futures, after Israel thwarted a drone and missile attack on Iran on Saturday.
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An Israeli military spokesperson said more than 200 Iranian drones and missiles were intercepted and the attack caused minor damage to a military base.
The Iranian government had vowed to avenge Israel’s April 1 attack on its consulate in Damascus, which killed a senior general. Iran told the United Nations that the issue “can be considered closed.” This carefully wired attack appears to have been an attempt to signal a strong response while minimizing the risk of broader escalation.
President Biden said he would seek a “diplomatic response” to the crisis.
How will Dow futures react? Bitcoin fell sharply on Saturday, dropping from about $67,000 to a low of $60,908. It is now over $64,000. On Friday, Bitcoin price fell 5.1% to $66,870.29.
Friday’s stock market rally was sold off by concerns about an Iranian attack. The Nasdaq fell despite setting a record at Thursday’s closing price. Nvidia (NVDA) and other mega-cap stocks and AI stocks rebounded. The S&P 500, Dow Jones, and Russell 2000 suffered even bigger losses for the week.
of CBOE Volatility IndexA measure of market fear soared Friday to its highest level since late October on concerns about Iran.
Dow Jones futures today
Dow Jones futures will open at 6pm ET, along with S&P 500 futures and Nasdaq 100 futures.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
Nvidia leads 5 stocks near buy points
Other news
late friday, tesla (TSLA) We have reduced the price of our Full Self-Driving subscription from $199 to $99 per month. According to online chatter over the weekend, Tesla has stopped deliveries of the Cybertruck.
salesforce.com (CRM) is in the final stages of negotiations to acquire the data management software maker Informatica (Infa), the Wall Street Journal reported Friday night.
Important revenue looms
goldman sachs (G.S.) and charles schwab (Shuu) to report early Monday morning. Goldman stock fell below its 50-day line on Friday, but Schwab maintains it in a buy zone.
Major chip equipment manufacturer ASML (ASML) and Nvidia chip maker taiwan semiconductor (TSM) could be the two most important gains of the week. Their results and guidance will have major implications for the chip space, including Nvidia. broadcom (AVGO), ram research (LRCX), applied materials (Amat) and KLA Co., Ltd. (KLAC).
All of these chip stocks have the potential for new locations and entry.
Nvidia stock is on IBD LeaderboardSwingTrader and IBD50. KLA stock is on IBD’s long-term leaders list. Nvidia, ASML, and Broadcom stock prices IBD big cap 20.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
Stock market gains had a tough week with a hot CPI inflation report and Middle East unrest, with Friday’s decline canceling out Thursday’s bullish signal.
The Nasdaq, which hit a record high on Thursday, fell 1.6% in stock market trading on Friday, ending the week with a loss of 0.45%. Although the composite index fell below the 21-day line, it ended slightly above the 50-day and 10-week lines. It is also still trading ahead of the big reversal date on April 4th.
The S&P 500 index fell 1.55% for the week, its lowest decline in 21 days. The benchmark index finished slightly above its 50-day line but below its 10-week line.
The Dow Jones Industrial Average fell 2.4% to its lowest since late January, and the small-cap Russell 2000 index fell 2.9% to its lowest since late February. Both are clearly less than 50 days.
Invesco S&P 500 Equal Weight ETF (RSP) fell 2.6% and fell below its 50-day line on Friday. The First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) fell 1.7%, below its 50-day line, its worst level since late February.
Crude oil fell 1.4% on the week to $85.66 a barrel, down from Friday’s intraday high of $87.67. Gold rose 1.3% to $2,356.20 an ounce, also well below Friday’s high.
The 10-year Treasury yield rose 12 basis points (bp) to 4.5%, from Thursday’s peak of 4.59%, its highest level in five months. Investors see a slim chance that the Fed will cut rates in June, and are only leaning towards a cut in July.
Stock market fear gauge soars
The CBOE Volatility Index rose 16.1% on Friday, its highest level since late October. Excessive fear could portend at least a short-term bottom. However, the market’s level of fear is still far from its October peak, let alone the all-time high of coronavirus infections.
Another sentiment gauge, especially Bulls vs Bears Readingwas close to overly bullish levels heading into last week.
If tensions in the Middle East ease, stock prices could rebound sharply. Various indicators that suggest the market is oversold also support that hopeful view.
However, if the conflict between Iran and Israel escalates, it could create greater uncertainty and cause stock prices to decline significantly.
ETF
Among growth ETFs, iShares Expanded Technology Software Sector ETF (IGV) fell 1.7% for the week. VanEck Vectors Semiconductor ETF (SMH) fell 0.9%. Nvidia and Taiwan Semiconductor are his largest SMH holdings, and ASML, Lam Research, KLA and AMAT stocks are also members.
Timing the Market with IBD’s ETF Market Strategy
ASML, Taiwan’s quasi-revenue
Dutch chip equipment giant ASML reported on Wednesday morning, and Taiwan Semiconductor is expected to make an announcement early on Thursday.
Analysts expect ASML’s profits to fall in the first quarter but recover in the second half. Taiwan Semi’s earnings are expected to be flat, but the unofficial target could be higher after the foundry giant reported better-than-expected first-quarter sales on April 10.
Taiwan Semi is benefiting from strong demand for AI and other advanced chips. TSMC’s guidance on earnings and capital spending will be key for the industry.
ASML stock fell 1.8% last week to 961.84, just around the 50-day and 10-week lines. Currently, the buy point is 1,056.34 on a flat basis. Investors can take advantage of the trendline entry near 1000 to initiate a position from the 10-week or April 1 high of 1002.66.
TSM stock rose 0.85% this week to 142.56. The stock has been consolidating for several weeks, but it needs another week to establish a proper footing. If Taiwan Cicada stock makes a profit and moves higher, investors could use the April 10 high of 148.43 as an entry point.
chip stock
Nvidia stock rose 0.2% on the week to 881.86. Stocks rebounded from the 10-week line from Wednesday to Thursday, but fell back on Friday and remained at the 21-day line. NVDA stock currently has a flat base with a buy point of 974. Investors could use Thursday’s high of 907.39 as an early entry.
Broadcom has an integrated foundation with handle purchase points. Lam Research and KLA have a flat base. market surge. Applied Materials has a de facto flat base and a tight three-week pattern.
what to do now
Thursday’s strong moves raised expectations that the market, especially leader stocks such as Nasdaq and Nvidia, would continue to rise.
Instead, there was a major setback on Friday in anticipation of an Iranian-Israeli attack. U.S. Treasury yields fell on Friday, but their weekly gains and further support for Fed rate cuts are a broader headwind.
Whatever the reason, this is still a flat market for the Nasdaq, and they are difficult to deal with. The Dow and Russell 2000, and perhaps the S&P 500, are increasingly showing signs of a pullback or new correction.
Investors need to reevaluate the past Friday and the past week. If you took a new position from Wednesday to Thursday, you may need to reduce your position or exit completely.
It’s still time to work on your watchlist. If the drumbeat of war fades and the reaction to future earnings is positive, you should be prepared. However, you also need to be prepared to scale out more aggressively.
As earnings season begins, know when your company’s holdings will be announced and when your key rivals, customers and suppliers will be in action.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
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