Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures, after a big week for the Nasdaq and leading stocks.
X
Apple (AAPL), Amazon.com (AMZN), Novo Nordisk (NGO), Eli Lilly (LLY), Super microcomputer (SMCI) and modern micro devices (AMD) will all report in the coming week. The latest meeting of the US Federal Reserve and the monthly labor market report are also on the agenda.
The stock market rallied sharply last week, fueled by profits from big companies, even amid an alarming inflation report. The Nasdaq and leading stocks stood out. as the tech titans delivered strong growth and pledged big AI spending.
AI chip maker Nvidia (NVDA), Broadcom (AVGO) and Astera Labs (ALAB) flashed along with buy signals AppLovin (APP), UCK (KLAC), Cava group (CAVA) and Embraer (ERJ).
Several other stocks issued buy signals with earnings due in the coming week, including Hubbell (HUB), Wing stop (WING), Texas Roadhouse (TXRH) and Generic (GNRC)
Investors should pay attention to the changing nature of the market. But be a little cautious given the revived bullish movement. The major indices are all below their 50-day moving averages. The strong earnings calendar could still influence the market and sectors, with Super Micro and AMD key to AI hardware gaming. Apple is a latecomer, but still a huge tech titan with a huge iPhone ecosystem. Any AI hints could help or hurt a whole range of stocks.
The Fed meeting and important economic data could also derail the initial market recovery.
Stocks of Nvidia, Novo Nordisk, Generac, KLA and Cava are on the IBD leaderboard, while shares of Eli Lilly are on the leaderboard’s watchlist. Nvidia shares are on SwingTrader. KLA stock is one of the IBD Long-Term Leaders. Wingstop, Hubbell and Texas Roadhouse are in the IBD 50. Broadcom, Hubbell and Super Micro stocks are in the IBD Big Cap 20. Cava was the IBD Stock of the Day on Friday.
Dow Jones futures today
Dow Jones futures open at 6:00 p.m. ET on Sunday, as do S&P 500 futures and Nasdaq 100 futures.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
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Stock market rally
The stock market rally was a strong week, particularly the Nasdaq and leading names. The Dow Jones Industrial Average rose 0.7% in trading last week. The S&P 500 index rose 2.7%. The Nasdaq Composite rose 4.2%. The Russell 2000 small-cap index rose 2.8%.
The upswing at the start of the week wasn’t really a surprise after a long losing streak. On Thursday morning, the rally attempt appeared to be in trouble as there was a sell-off on hot inflation data Metaplatforms (META) falls due to leadership. But the major indexes pared losses, in part because Meta’s selloff on heavy AI spending boosted Nvidia, Broadcom and AI hardware.
The rally accelerated on Friday, driven by strong earnings and spending plans Microsoft (MSFT) and Google parent company alphabet (GOOGL).
The Nasdaq’s 2% rise on Friday resulted from slightly lower volume than Thursday. However, a large number of leading stocks had buy signals or extended price movements.
Major indices could face resistance at the 50-day line, with the S&P 500 and Nasdaq near key levels. Investors can expect an extensive calendar of earnings and economic news in the coming week.
The 10-year Treasury yield rose 5.5 basis points to 4.67%, up 48 basis points in just four weeks. On Thursday, the 10-year Treasury yield reached nearly 4.74%, its highest level since Nov. 1.
Markets are now seeing the Fed’s first rate cut in September, and that’s not a lock. Investors are broadly divided over whether there will be one or two cuts in 2024, with the likelihood of no action at all.
The Fed meeting statement and Fed Chairman Jerome Powell, along with April’s jobs report and other key data, should influence Treasury yields and rate cut chances.
U.S. crude oil futures rose 2% to $83.85 a barrel.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gained 3.3%. The VanEck Vectors Semiconductor ETF (SMH) rose 9.25%. Nvidia is No. 1, with Broadcom stock also a key component.
The SPDR S&P Metals & Mining ETF (XME) fell 0.1% last week. The Global X US Infrastructure Development ETF (PAVE) rose 2.3%. The SPDR S&P Homebuilders ETF (XHB) gained 3.6%. The Energy Select SPDR ETF (XLE) rose 0.8% and the Health Care Select Sector SPDR Fund (XLV) gained 0.7%, with Eli Lilly stock a notable holding.
The Industrial Select Sector SPDR Fund (XLI) gained 1.8%. The Financial Select SPDR ETF (XLF) gained 1.1%.
Plan the market with IBD’s ETF market strategy
Nvidia and AI chip stocks signal quick buy signals
Nvidia shares rose 15.2% to 876.90 last week. Friday’s 6.1% gain pushed NVDA stock back above the 50-day line and just above a descending trend line, providing an early entry. Nvidia stock has a buy point of 974.
Nvidia was scheduled to appear on CBS’s “60 Minutes” on Sunday evening with an interview with CEO Jensen Huang.
Broadcom shares gained 11.6% last week and 3.8% on Friday, rising above the 50-day line to 1,344.05. This could offer an aggressive entry. AVGO stock has a buy point of 1,403.98 based on a double bottom.
Astera Labs shares rose 31.8% this week to 85, a record close. Friday’s 18.7% rise pushed the March AI chip IPO above resistance at around 75 and offered an entry. But shares now appear to be extended. ALAB stock has an official IPO base buy point of 95.21. Astera’s winnings are due on May 7th.
Demand for AI chips surged due to high spending by tech titans.
Super Micro and AMD’s results on Tuesday evening could influence the group, as could Amazon’s comments on AI spending. Shares of SMCI and AMD are still well below their 50-day lines, although Super Micro had a strong week. Amazon shares recovered above the 50-day mark.
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Other stocks are clearing buy points
KLA shares rose 12.4% this week to 706.26. On Friday, the chip maker rose nearly 5% after strong gains, breaking the 50-day mark and breaking a trend line. This offered an early start. KLAC stock has a 729.15 buy point with a flat base.
Cava shares rose 16.7% to 69.61, reclaimed the 50-day line on Thursday and then rose rapidly on Friday. The relative strength line hit a new high, signaling Cava’s outperformance versus the S&P 500. On Friday morning, the Mediterranean restaurant broke a trend line and offered an aggressive entry. But the Cava inventory was expanded by the close of trading. Investors could be waiting for a decline or the formation of a suitable base.
AppLovin rose 10.5% to 73.82 last week, rebounding from the 50-day/10-week line for the first time since a breakout in late January. Friday’s 6.7% gain pushed APP shares back above the 21-day line and breaking a short trend line.
Embaer shares rebounded last week after gracefully retreating to the 10-week line over the past four weeks. it rose 9.25% to 25.98. This presented a buying opportunity in the Brazilian aircraft manufacturer. It now has a new flat base with a buy point of 27.25, according to MarketSurge analysis.
Eli Lilly, Novo Nordisk
Eli Lilly reports early Tuesday, while Novo Nordisk is available ahead of Thursday’s opening. Expect strong growth thanks to booming demand for weight loss drugs. Investors will be watching for clues on manufacturing as well as progress on next-generation obesity rates.
Shares of Eli Lilly and Novo Nordisk are in flat bases, but Lilly has fallen below the 50-day line while Novo is hovering right around that key level.
What now
Friday is a good example of why investors need to stay engaged and have their watchlists ready.
As the Nasdaq soared, a bevy of stocks broke buy points. Although many are still within reach, it’s helpful to buy as close to entry as possible. In some cases, such as Cava and Astera Labs, shares quickly expanded by not taking advantage of Friday morning.
Friday was a day to think about shopping. However, strong earnings and economic news next week, as well as 50-day line tests for the S&P 500 and Nasdaq, provide reasons not to aggressively increase exposure.
As the market recovers and your holdings continue to make progress, you can increase your exposure as more stocks trigger entries.
Therefore, make sure that your watchlists are up to date. Stocks that looked damaged Thursday morning could be trading or on the rise. And while the names Nvidia and AI stand out again, the market leadership is broad.
Your watchlists and portfolio should reflect this.
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