Dow Jones futures rose slightly Monday morning, along with S&P 500 futures and Nasdaq futures. Earnings season is waning somewhat, but inflation and other economic data are on tap this week. Elon Musk and Donald Trump will have an online conversation Monday night.
The stock market rebounded from the Aug. 5 global sell-off, though the key indexes also suffered weekly losses. A rally attempt is underway, but needs to stage a follow-through day.
Nvidia continues to struggle. But several AI stocks are showing strength, including Meta Platforms, Palantir Technologies, ServiceNow, Samsara, Arista Networks and Nvidia chipmaker Taiwan Semiconductor.
Meanwhile, a number of stocks moved above their 50-day moving averages last week, including Eli Lilly, CAVA, TradeDesk, On Holding and Costco Wholesale. All arguably flashed early entries, though ONON reports early Tuesday.
Nvidia stock, ServiceNow and Eli Lilly are on Leaderboard. CAVA and Costco stock have joined SwingTrader. Palantir stock, Samara, Arista Networks and Service Now are all on the IBD 50 list. Palantir and Arista stock are on the IBD Big Cap 20. Samsara was Friday's IBD Stock Of The Day.
Before the open, software maker Monday.com reported strong earnings and guidance. MNDY stock jumped, signaling a move above the 50-day line and flashing at least early entries.
Dow Jones Futures Today
Dow Jones futures advanced 0.2% vs. fair value. S&P 500 futures climbed 0.25% and Nasdaq 100 futures rose 0.25%.
Crude oil futures rose 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Elon Musk, Donald Trump Event
Former President Donald Trump will have a conversation with Tesla CEO Elon Musk on Musk's X platform, starting at 8 p.m. ET Monday night.
The conversation, among many other topics, will likely include a discussion about Trump's electric vehicle policies. Trump has advocated eliminating EV subsidies and mandates, as well as encouraging China EV makers such as Tesla rival BYD, to set up factories in the U.S. Expect a discussion about Bitcoin and cryptocurrencies as well.
Stock Market Rally
The stock market started last week with a terrible Monday open, as yen-carry-trade unwinding and an Nvidia AI chip delay joined recession fears to trigger a global rout as massive volatility spikes.
But the indexes came off lows Monday and began a stock market rally attempt on Tuesday, as the yen stabilized while stronger U.S. economic data calmed nerves.
The Dow Jones Industrial Average fell 0.6% in last week's stock market trading. The S&P 500 index lost a fraction. The Nasdaq composite dipped 0.2%. The small-cap Russell 2000 retreated 1.35%.
The Dow Jones recovered to close just above its 50-day line, while the Russell 2000 continues to hit resistance there. The S&P 500 and Nasdaq haven't cleared their 10-day lines yet, let alone the 21-day or 50-day averages.
The stock market still hasn't confirmed its rally attempt with a follow-through day. That could happen any time this coming week. Remember, not all confirmed rallies succeed.
On Friday, the major indexes paused, but the number of stocks moving above their 50-day lines, including Cava, Eli Lilly and Costco, was an encouraging sign. Those join a number of stocks from a variety of sectors setting up or flashing early entries.
U.S. crude oil futures jumped 4.5% to $76.84 a barrel last week, snapping a four-week losing streak.
Treasury Yields Rebound, Key Data Due
The 10-year Treasury yield jumped 15 basis points to 3.94%. The 10-year yield dived to 3.67% briefly on Monday and topped 4% intraday Thursday.
Markets have priced in a rate cut for the Sept. 18 meeting, but it's a tossup between 25 0r 50 basis points.
In the coming week, investors will get the July producer price index on Tuesday and the consumer price index on Wednesday. On Thursday, get ready for the July retail sales and industrial production reports, weekly jobless claims, August regional manufacturing reports from the Philly Fed and New York Fed and the August Housing Market Index.
These economic reports could provide the catalyst for a follow-through day — if one hasn't already occurred — or send the indexes back toward recent lows.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 2.2% last week. The iShares Expanded Tech-Software Sector ETF climbed 2.8%, with ServiceNow, Palantir and Samsara all members. The VanEck Vectors Semiconductor ETF gained 2.9%. Nvidia is the No. 1 holding in SMH, with Taiwan Semiconductor stock No. 2.
SPDR S&P Metals & Mining ETF declined 0.8% last week. The Global X U.S. Infrastructure Development ETF dipped 0.1%. SPDR S&P Homebuilders ETF retreated 2.9%. The Energy Select SPDR ETF gained 1.1% and the Health Care Select Sector SPDR Fund sank 0.6%, with Lilly stock a major component.
The Industrial Select Sector SPDR Fund climbed 1.25%.
The Financial Select SPDR ETF advanced 0.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF edged up 0.6% last week and ARK Genomics ETF fell 1.4%. Tesla stock is still a big holding at Ark Invest. TSLA stock fell 3.7% last week to 200, falling below the 200-day line and essentially wiping out its huge recent run. Shares did come well off lows.
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AI Stocks To Watch
Palantir stock skyrocketed 21.3% last week 30.02, hitting a three-year high. Shares roared back from a brief Monday plunge to its 200-day line. Strong Palantir earnings and guidance, plus a new alliance with Microsoft, provided positive catalysts. PLTR stock is extended from the 50-day line and a prior 27.50 buy point, but worth watching.
Meta stock jumped 6.1% to 517.77, decisively reclaiming the 50-day line. Investors could use a prior buy point of 514.01 as an entry, or the Aug. 1 post-earnings high of 527.17. Meta stock needs another week for a new base
ServiceNow stock rose 2.65% for the week to 811.59 after testing its 50-day line on Monday. Shares broke out past an 806.52 handle buy point and an alternate entry of 815.32 on July 25 following earnings, but soon fell back with the market. Shares regained the handle buy point on Friday.
Samsara stock leapt 8% to 38.24 for the week. On Monday, shares dived below the 50-day and 200-day lines briefly, but closed fractionally higher. IOT stock has a 39.21 cup-with-handle buy point. The Internet of Things play is volatile, and tends to have wild moves following earnings. But Q2 earnings aren't expected until early September.
Arista stock rallied 5.2% to 335.87 for the week, rebounding from Monday's intraday tumble. Shares are above their 50-day line. It may be the only AI hardware stock that's above that key level. ANET stock has a messy chart, even more so that Meta, but could have a new base after one more week.
Taiwan Semiconductor stock plunged to its 40-week line Monday morning but ultimately surged 11.55% to 167.17, nearly back to its 50-day line. On Friday, Taiwan Semiconductor reported July sales jumped nearly 45% vs. a year earlier, fueled by AI chips for Nvidia and others.
Microsoft, Nvidia AWOL. Meet The New Big 'Daddy' On Wall Street.
Nvidia Stock
But can AI stocks thrive if the 800-pound gorilla, Nvidia, is struggling?
Nvidia stock came well off Monday's lows and is back above the 100 level and a prior base. Shares still fell 2.35% to 104.75 for the week, hitting resistance at the 10-day line, according to MarketSurge. It was the fourth straight weekly decline for NVDA stock.
Concerns about AI spending fatigue remain, while reports that Blackwell, Nvidia's next-generation AI chip, faces production delays have weighed on NVDA.
What To Do Now
Investors could have made some pilot buys late in the week, taking advantage of the early movers. Just keep in mind that if the market falters, many of the promising names right now will likely struggle.
Investors should still largely be in cash, awaiting a FTD. When that happens, whether it's Monday or next year, you can exposure gradually as the market and your positions draw you in. If you're adding 10% a day, it doesn't take that long to be nearly fully invested.
For now, focus on those watchlists. Have a broad list of stocks showing promising action, while focusing on a smaller list of top potential targets.
Be ready to act, but also ready not to act.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
