Dow Jones futures edged lower Tuesday morning, while S&P 500 and Nasdaq futures fell slightly after the Labor Day weekend. Treasury yields rose.
The stock market rally had a strong week, even with the indexes pausing after Wednesday. Falling Treasury yields fueled market gains for much of the week, though yields rebounded Friday.
It's a confirmed market uptrend, with leading stocks acting well. Investors should be taking part with discipline.
The Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Nvidia, Amazon.com, Tesla and Meta Platforms have lived up to their title in 2023.
Nvidia stock, the clear leader of the AI market rally, is in range. So are Apple stock, Amazon and Google. Meta, Microsoft and Tesla stock are hitting key resistance, but could offer entries soon.
NVDA stock and Meta are on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. AMZN stock is on SwingTrader. Nvidia stock is on the IBD 50. Google stock and Nvidia are on the IBD Big Cap 20.
The video embedded in this article reviewed the game-changing week and analyzed Baker Hughes, Samsara and Tesla stock.
Airbnb, Blackstone Join S&P 500
Airbnb and Blackstone rose solidly in premarket trading on news that they'll join the S&P 500 before the open on Sept. 18 as part of a quarterly rebalance for the S&P Indices. ABNB stock is set to retake the 50-day line while BX stock could break out.
Dow Jones Futures Today
Dow Jones futures lost about 0.1% vs. fair value. S&P 500 futures declined 0.2%. Nasdaq 100 futures fell 0.3%.
The 10-year Treasury yield rose several basis points to 4.23%.
A China services index fell more than expected in August to a 2023 low, though still signaling slight growth. A eurozone services gauge contracted at the worst pace in 30 months, or the worst in 10 years excluding the Covid pandemic.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally roared higher earlier in the week, then held those gains as the major indexes reclaimed their 50-day lines.
The Dow Jones Industrial Average climbed 1.4% in last week's stock market trading. The S&P 500 index popped 2.5%. The Nasdaq composite jumped 3.25%. The small-cap Russell 2000 leapt 3.6%.
The 10-year Treasury yield declined nearly 7 basis points for the week to 4.17%, but that's with Friday's 8-basis-point gain. Still, the benchmark yield is down from the 15-year high of 4.36% set Aug. 22.
U.S. crude oil futures surged 7.2% to $85.55 a barrel, ending the week at its highest close of the year. Copper futures climbed 1.3% for the week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF bounced 5.2% last week, while the Innovator IBD Breakout Opportunities ETF popped 4.7%. The iShares Expanded Tech-Software Sector ETF gained 4.6%, with MSFT stock a huge holding. The VanEck Vectors Semiconductor ETF leapt 4.8%. Nvidia stock is the largest SMH component.
SPDR S&P Metals & Mining ETF jumped 5.5% last week. The Global X U.S. Infrastructure Development ETF advanced 3.6%, right at record highs. U.S. Global Jets ETF ascended 1.6%. SPDR S&P Homebuilders ETF shot up 6.2%. The Energy Select SPDR ETF popped 3.6% to a seven-month high. The Health Care Select Sector SPDR Fund edged up 0.1%, but well off weekly highs. The Industrial Select Sector SPDR Fund climbed 2.1%.
The Financial Select SPDR ETF rose 2.1% and the SPDR S&P Regional Banking ETF leapt 4.6%.
Reflecting more-speculative story stocks, ARK Innovation ETF ran up 6.5% last week and ARK Genomics ETF soared 6.7%. Tesla stock is the No. 1 holding across Ark Invest's ETFs.
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Magnificent Seven
The megacap stocks dubbed the "Magnificent Seven" have all done well in 2023, propelling the market rally. But there's little doubt that Nvidia is the stock and company of 2023, leading the AI revolution.
NVDA stock rose 5.4% to 485.09 last week, rebounding from its 21-day line to hit a new closing high on Thursday before dipping 1.7% on Friday. Nvidia stock is still in range from a 480.88 buy point, though it's close to extended vs. the 50-day line.
NVDA fell 1% in premarket action.
With Nvidia the clear AI leader in an AI-led market, can investors afford not to be invested in this name?
AMZN stock bounced from the 50-day/10-week line to start the week, then rallied of its 21-day line Thursday, also breaking a short trendline. That offered an early entry. Shares rose 3.65% for the week 138.12. Amazon stock is working on a short consolidation that could turn into its own base. One could view the recent pause as a handle on a yearlong consolidation. Shares edged lower in premarket trade Tuesday.
Apple stock shot up 6.1% to 189.46 last week, reclaiming the 50-day moving average decisively, offering an early entry. AAPL stock has an official buy point of 198.23 from a cup base.
Shares slipped 1% early Tuesday.
Apple's so-so fundamentals are a concern. The Dow tech giant is expected to unveil the Apple iPhone 15 at a Sept. 12 event.
Google stock rose 4.45% last week to 135.66. Shares cleared a short self consolidation just above a prior base. That offered a new, 133.74 buy point. The relative strength line has been trending higher for several weeks. GOOGL lost a fraction in premarket trade.
META stock climbed 3.8% this past week to 296.38, but has been hitting resistance at the 50-day line for the past few days. A decisive move above that level, just below 300, would offer an early entry. Meta stock is working on its first new base since March, but it won't be official for another week. Shares were flat early Tuesday.
MSFT stock fell back from a record high 366.78 on July 18, with some heavy-volume losses around its earnings report. Shares have bounced back modestly, albeit in lighter volume. Microsoft stock rose 1.8% to 328.66 for the week, but hit resistance at its now-falling 50-day line on Friday. A decisive move above that level could offer an early entry, though the sliding relative strength line isn't a great sign. MSFT stock has an official consolidation buy point of 366.78, according to MarketSmith analysis. Microsoft was just below break-even Tuesday.
Tesla stock surged back above its 50-day line on Tuesday, but never decisively cleared that key level. Shares then tumbled 5.1% Friday to its 21-day. Still, TSLA stock rose 2.7% for the week to 245.01. A move above Thursday's high of 261.18 could offer an early entry for the EV giant. Tesla stock has a 299.29 consolidation buy point. TSLA was little changed Tuesday.
Tesla unveiled an upgraded Model 3 in China on Friday, with a higher price coming as somewhat of a surprise. Meanwhile, Tesla also sharply cut Model S and X prices in the U.S., while also cutting FSD price to $12,000 from $15,000.
Those moves undermine the bull case that Tesla price cuts are almost finished, with profit margins set to rebound on the back of the updated Model 3 and upcoming Cybertruck.
Still, the upgraded Model 3 will likely generate strong demand, at least initially.
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Market Rally Analysis
It was a big, bullish week for the stock market rally. The major indexes roared back above their 50-day moving averages in Tuesday's follow-through day, just three trading days after the ugly downside reversal on Aug. 24.
Growth stocks are leading the charge, including Nvidia, but leadership is expanding.
The major indexes were technically mixed on Friday, but they showed resilience given the big bounce in Treasury yields. The Nasdaq only fell fractionally due to a handful of titans, notably Tesla stock, Nvidia and Broadcom.
Market breadth is improving, with winners outpacing losers even on Friday.
The Russell 2000 moved above the 50-day line Friday, with bank stocks bouncing on a less-inverted yield curve. However, the Invesco S&P 500 Equal Weight ETF is struggling at that key level.
Meanwhile, the Dow Jones is testing its 21-day and 50-day lines, though those are holding for now. Still, it's a reminder that it wouldn't take much for the S&P 500 or even the Nasdaq to undercut their 50-day lines.
Growth stocks are still looking strong, energy names moved out late in the week as crude oil prices revved higher again. Meanwhile, the housing sector, industrials, metals, insurance brokers and more are showing strength or setting up.
The Nasdaq and broader stock market rally could keep running, though a pause wouldn't be a surprise. That could let a few stocks build the right side of bases or forge handles.
Earnings season is winding down, with even the economic calendar light this coming week. So headline risks could be subdued.
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What To Do Now
The stock market rally is doing everything to help investors. Tuesday's FTD, coinciding with the indexes reclaiming key levels, was a clear signal to step up exposure.
With the market generally trending up the rest of the week, more buying opportunities have appeared each day. But it hasn't been a flood, reinforcing the idea that investors should pick up exposure gradually day by day.
A lot of stocks are setting up from a variety of sectors. If we're in the start of a new market rally, or a new leg of the 2023 uptrend, this is the time to take advantage.
So spend this long weekend running screens and updating your watchlists.
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