Early Friday morning, Dow Jones futures fell alongside S&P 500 and Nasdaq futures. The Nasdaq Composite and S&P 500 rose Thursday, but the stock market rally was mixed and weak.
X
Megacap was strong. Amazon.com (AMZN) took the lead when Amazon Web Services announced a new artificial intelligence effort. AMZN stock surged to a nine-month high after the company’s AWS cloud division announced a $100 million investment in generative AI to help customers. Loop Capital expects slowing AWS growth to hit “bottom” soon.The sentiment could also be good news for cloud rivals microsoft (MSFTMore), the parent company of Google alphabet (Google), both had solid sessions.
MongoDB (MDBs), super microcomputer (SMCI) and Ram Research (LRCX) showed a bullish rally on Thursday. The trio made aggressive entries despite hitting intraday highs.
Many software and chips played solid action on Thursday.
C3.ai (AI) and Samsara (IoT), held two AI stock plays, and an Investor Day event. AI shares fell 4.1% Thursday, testing the 21st line. IOT shares rose 1.2% after falling for four days. However, it is unclear whether the Investor Day event had a significant impact on either stock. C3.ai and IOT stocks could be volatile on Friday depending on analyst reaction.
Bank stocks were noticeably weaker. Packwest Bancorp (PACW) to JP Morgan Chase (JPM). While there were no clear triggers or clear signs of a return to deposit flight, banks face long-term problems that could constrain profitability over the long term.
Don’t overthink it. Thursday was likely to have seen a mix of modest rebounds amid modest pullbacks, driven by a solid tech-led rally in the stock market.
Added MDB stock IBD Leaderboard Thursday and IBD Big Cap 20. LRCX stock has joined SwingTrader. MongoDB and IOT inventory is IBD50. Lam Research was Thursday’s IBD Stock of the Day.
dow jones futures today
Dow Jones futures fell 0.3% against fair value. 3M (hmm) A major settlement was reached over chemicals in drinking water. S&P 500 futures were down 0.5% and Nasdaq 100 futures were down 0.7%.
Futures fell as Asian markets plunged overnight.
The 10-year U.S. Treasury yield fell to 3.75%.
Crude oil futures fell more than 1%.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
IBD experts analyze hot stocks during the stock market rally on IBD Live.
stock market rise
The rally in the stock market was mixed as tech giants and AI-related activity rebounded. The Dow Jones Industrial Average closed a few minutes lower in Thursday’s stock market trading. The S&P 500 index rose 0.4%. The Nasdaq Composite rose 0.95%. Small-cap Russell 2000 fell 0.8%.
Amazon stock surged 4.3% to 130.15.
apple (AAPL), Microsoft, Google, Tesla (TSLA), taiwan semiconductor (TSM) and salesforce.com (CRM) were all up 1.5%, just over 2%.
US oil prices fell 4.2% to $69.51 a barrel. The 10-year U.S. Treasury yield climbed 8 basis points to 3.8%.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) increased by 0.4%. iShares Augmented Technology Software Sector ETF (IGV) increased by 0.55%. VanEck Vectors Semiconductor ETF (SMH) increased by 0.55%. LRCX stock is a notable stock he holds by SMH.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) break-even point and ARK Genomics ETF (Argu) fell 1%.
SPDR S&P Metals & Mining ETF (XME) and the Global X US Infrastructure Development ETF (pave) both fell 0.6%. US Global Jets ETF (Jets) maintained altitude. SPDR S&P Homebuilders ETF (XHB) fell 0.5%. Energy Select SPDR ETF (XLE) retreated 1.3% and the Healthcare Select Sector SPDR Fund (XLV) rose 0.7%.
Financial Select SPDR ETF (XLF) fell 0.8%. JPM shares fell 1.9% near the 50-day line after testing the buy point on Wednesday. SPDR S&P Regional Banking ETF (KRE) fell 3.2%, falling below the 50-day line. PACW shares fell 5.9%.
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MDB shares climbed 4.1% to 388.36 on Thursday, breaking through the trendline of a three-week tight pattern that could become a tight flag high with higher volume. This suggested an early entry around 385 or perhaps 389. This is after the first test of the recent range low since the significant earnings gap on June 2nd. MongoDB stock rose to 396.84. The database software maker announced an expanded relationship with Google Cloud and several AI initiatives. MongoDB also works with Amazon Web Services and others.
SMCI shares climbed 3% to 226.46, rising from the 21-day moving average in strong trading. Aggressive traders could use a move above Wednesday’s high of 227 as an early entry. However, the stock hit 10-day resistance, well below its high of 241.97 and closed just below the aggressive buy point.
LRCX stock rose 2.3% to 619.87 after initially breaking the 21-day line and the 600 level. Investors could use the move above Wednesday’s high of 615.80 as an entry point. The stock retreated from intraday highs of 624.48 near the short-term trendline. LRCX shares have been trading tight for three weeks at the official buy point of 644.60, similar to MongoDB. Some of the other chip gear giants rebounded from the 21st line.
market rise analysis
The stock market rally ended its recent decline on Thursday with a slight rally. The Nasdaq and S&P 500 both bounced off the 10-day line, led by Amazon and other growth giants.
So, will the Nasdaq pullback be over in three days? If that happens, it will soon be extended again, raising hopes for a further pullback. The Nasdaq closed Thursday 7.8% above the 50-day line and the Nasdaq 100 9.1% above.
The range was noticeably weaker considering the strong rally in the Nasdaq. Losers beat winners 2-1 on the New York Stock Exchange and 8-5 on the Nasdaq.
On Thursday, the Dow Jones and Russell 2000 tested the 21st line.
Invesco S&P 500 Equal Weight ETF (RSP) fell 0.4%, just above 21 days, even as the S&P 500 posted a modest gain. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.25%, well below the Nasdaq 100’s 1.2%.
High-profile tech stocks such as MDB and SMCI have rebounded from support levels. We want to see when the Nasdaq is rising. Hope these stocks resist selling pressure if the Nasdaq falls again.
Several stocks are consolidated around traditional buy points. monday.com (Mundi) and parker hannifin (pH).
Timing the Market with IBD’s ETF Market Strategy
what to do now
If you’re an aggressive trader, you might have bought MongoDB, Lam Research, SMCI stocks, or a few other rebounding stocks on Thursday. Adding a few shares to an existing stock is much less risky than starting a new position. Many of these leaders could retreat if the Nasdaq resumes its decline. If there is a pullback near the intraday high, it will not take long for the price to go under the surface.
The swing trader mindset makes sense in the case of new or additional purchases, making moves to cut losses quickly and take partial profits early to secure some profits. If the stock price continues to rise, you can hold the remaining stock as a position trade.
Whether or not you pull the trigger now, you will definitely want to watch the big winners and look for stocks that are holding or bouncing off support. Keep your watchlists up to date in different areas. It’s still important to take advantage of early entries and buy close to those entries.
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