Dow Jones futures will open Sunday night along with S&P 500 futures and Nasdaq futures.
The stock market had a mixed week. Meanwhile, the S&P 500, especially the Nasdaq, rose, ending a three-week losing streak.But major indices suffered an ugly reversal on Thursday despite the crash Nvidia (NVDA) earnings and guidance. Stocks rebounded on Friday despite hawkish Fed Chairman Jerome Powell, but many major stocks are still hurt.
The market rally attempts are still ongoing, but investors should remain cautious in the current environment, especially in tech stocks.
NVIDIA’s shares have risen strongly this week, but are facing a significant test after falling sharply from their highs on Thursday morning. Meanwhile, other chip and artificial intelligence areas suffered heavy losses.
Tesla (TSLA) surged last week and reached an important level.
Other stocks to watch: meta platform (meta), the parent company of Google alphabet (Google) as well as the Dow Jones Giants visa (V.), caterpillar (Cat) and salesforce.com (CRM). Salesforce makes another big week headline for software revenue.
A video embedded in this article discusses major market moves, revealing Nvidia, CAT stocks, and Marsh & McLennan (MMC).
dow jones futures today
Dow Jones futures open Sunday at 6:00 pm ET along with S&P 500 and Nasdaq 100 futures.
Note that overnight trading, such as Dow futures, does not necessarily translate into actual trading on the next regular stock market.
stock market rally attempt
The stock market’s rally attempt started the week well, but fell back on Thursday, with all major indices hitting resistance at their 50-day moving averages. Stocks rose Friday despite Fed Chairman Jerome Powell’s hawkish Jackson Hole speech.
The Dow Jones Industrial Average fell 0.45% in last week’s stock market trading. The S&P 500 Index rose 0.8% and the Nasdaq Composite Index rose 2.3%.
Small-cap Russell 2000 fell 0.35%.
The 10-year U.S. Treasury yield fell one basis point to 4.24%. The 10-year Treasury yield hit an intraday high of 4.36% on Tuesday, the highest in 15 years, but fell to 4.19% on Wednesday.
Two-year bond yields, which are more closely tied to the Fed’s policy outlook, rose 12 basis points to 5.05%. The market is now leaning towards another rate hike by the Fed by November 1st.
U.S. crude futures fell 1% over the week to $79.83 a barrel. Copper futures rose 1.65%, ending its first decline in three weeks.
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) rose 1.1% last week. iShares Augmented Technology Software Sector ETF (IGV) rose 3%, led by CRM stocks. VanEck Vectors Semiconductor ETF (SMH) rose 2%. Nvidia shares are SMH’s number one holding.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) was up 1.5% last week, while the ARK Genomics ETF (Argu) rose 0.8%. Tesla shares are the number one holding of all Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 1.6% last week. Global X US Infrastructure Development ETF (pave) increased by 0.5%. US Global Jets ETF (Jets) fell 1.7%. SPDR S&P Homebuilders ETF (XHB) fell 0.3%. Energy Select SPDR ETF (XLE) fell 1.4%, while the Healthcare Select Sector SPDR Fund (XLV) fell 0.1%. Industrial Select Sector SPDR Fund (XLI) rose 0.3%, making CAT the top holding.
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NVDA shares surged towards the end of the year, retracing the 50-day line and flashing a buy signal. Nvidia’s earnings shatter the view as the AI chip leader again leads a significant uptick.
But after soaring to an all-time high of 502.66 on Thursday’s opening, Nvidia shares ended essentially flat. Shares fell 2.4% to 460.18 on Friday, but found support at the 21-day line just above the 50-day line.
All told, NVDA shares are up 6.3% this week.
Maintaining these levels is important for Nvidia, but perhaps even more so for other AI areas and the general market. If the fastest-growing AI leader struggles, do other growth stocks stand a chance?
Tesla shares surged 10.7% to 238.59 last week, ending a three-week losing streak. The EV giant is currently at the 21-day moving average. A move above the currently falling 50-day line could provide an early entry into a new benchmark with an official buy point of 299.20. However, a reversal from the 21-day and 50-day lines could present a short-selling opportunity.
Buzz is building for an upgraded Model 3 and the upcoming Tesla Cybertruck. However, with Elon Musk hinting at Cybertruck production issues, there are still many unknowns about these vehicles.
Meanwhile, Tesla continued to ramp up discounts in key markets, even as it moderated production in the third quarter. Finally, the U.S. Highway Traffic Safety Administration says it’s nearing the end of its investigation into Tesla’s Autopilot driver-assistance system and “fully autonomous driving,” but NHTSA regulators are taking serious action against EV giants. It is unclear whether action will be taken.
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Other stocks to watch
Google shares surged 0.1% to 129.88 last week after briefly hitting a 52-week high. GOOGL shares are in the buy range from the buy point at 127.10 cups with handles, but investors may want to wait for a better move than the past few weeks.
The meta stock rose 0.8% to 285.50, but hit resistance at the 50 days/10 weeks line. META shares are currently 4.2% below the 10-week line. That’s a sell signal, but the stock hasn’t completely broken past last week’s lows. A decisive move above the 50-day line and trendline allows for early entry, but the meta may take longer.
Visa shares rose 1.85% to 242.57 over the past week. The stock received another 245.37 buy points from a flat base that formed just above another flat base. Base-on-base patterns are especially bullish in volatile or weak markets. Investors may use the August 10 high of 243.95 as a slightly early entry.
Caterpillar shares fell 0.45% to 272.56, just below the 21st line. Stocks have been solid this month, with a small but gradual pullback following a solid breakout. CAT shares may find new ground and possibly find support at the 10-week line.
CRM shares rose 2.3% last week to 209.47, but the 21-day line below the 50-day line is hitting resistance. A decisive move beyond the 50-day line will then generate early entries to new base locations. Salesforce is due to release its earnings on Wednesday night.
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market rise analysis
Thursday’s sharp reversal from the 50-day moving average dealt a serious blow to the market’s attempt to move higher. Friday’s rally was still great, but low volumes continued the uptrend.
Things look a little better on the weekly chart. The Nasdaq showed a solid gain, although it was away from the highs. The S&P 500 edged higher and the Dow Jones fell slightly.
All that can be said, however, is that the direction of the market remains uncertain.
The stock market rally attempt will stand until the S&P 500 and Nasdaq break below their Aug. 18 lows. Therefore, investors should continue to monitor follow-through dates. Ideally, the FTD would also include regaining the 50-day line following a major reversal from Thursday’s key levels.
Market width has weakened significantly in recent weeks.
As the width narrows, so does the leadership. Most tech growth projects look damaged and need at least a little repair time. Major earnings from Nvidia stock and Salesforce.com, broadcom (AVGO) will be key this week.
Home builders are on the brink of bankruptcy.
Insurance brokers are doing well. So do some construction, infrastructure and industrial businesses, as well as discounters and healthcare workers.
Energy is the most promising sector at the moment, but it has stalled for now with oil prices.
Earnings reports and Friday’s September jobs report will be key headlines next week. However, the stock market can still be affected by the bond market.
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what to do now
Investors should have significantly reduced their exposure in recent weeks, but there aren’t many reasons or opportunities to buy new.
This is Show Me Market. Investors should be in wait-and-see mode until the market rally attempt proves its real strength.
Depending on what happens next, a rally to the 50-day line could portend a buying or short selling opportunity.
Investors should therefore prepare buy and shortlists, as well as a broader list of stocks that hold key levels and show relative strength.
If the market falls below recent lows, it would suggest investors need to further reduce their exposure and fully cash out.
In other words, be proactive, stay flexible, and be prepared.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
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