Dow Jones futures rose slightly Monday morning, along with S&P 500 futures and Nasdaq futures, after a big week for the Nasdaq and leading stocks.
Apple, Amazon.com, Novo Nordisk, Eli Lilly, Super Micro Computer and Advanced Micro Devices all report this week. The latest Federal Reserve meeting and monthly jobs report are also on the slate.
The stock market rebounded strongly last week, fueled by big-cap earnings even amid an alarming inflation report. The Nasdaq and leading stocks were the standouts. as tech titans delivered strong growth and pledged heavy AI spending.
AI chipmakers Nvidia, Broadcom and Astera Labs flashed buy signals, along with AppLovin, KLA, Cava Group and Embraer.
Several other stocks flashed buy signals that have earnings this week, including Hubbell, Wingstop, Texas Roadhouse and Generac
Investors should note the market's character change in the market. But the major indexes are all below their 50-day moving averages. The heavy earnings calendar could still swing the market and sectors, with Super Micro and AMD key for AI hardware plays. Apple is a laggard, but it's still an enormous tech titan with a huge iPhone ecosystem. Any AI hints could help or hurt a slew of stocks.
The Fed meeting and key economic data also could derail the nascent market rally.
Tesla stock jumped early Monday, set to gap above resistance at its 10-week moving average. Tesla CEO Elon Musk made an unannounced visit to China on Sunday, reportedly winning tentative approval to introduce Full Self-Driving in the country.
Nvidia, Novo Nordisk, Generac, KLA and Cava stock are on IBD Leaderboard, with Eli Lilly stock on the Leaderboard watchlist. Nvidia stock is on SwingTrader. KLA stock is on IBD Long-Term Leaders. Wingstop, Hubbell and Texas Roadhouse are on the IBD 50. Broadcom, Hubbell and Super Micro stock are on the IBD Big Cap 20. Cava was Friday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures advanced 0.25% and Nasdaq 100 futures climbed 0.4%, with TSLA stock helping.
The 10-year Treasury yield fell to 4.62%.
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 had a strong week, especially the Nasdaq and leading names. The Dow Jones Industrial Average advanced 0.7% in last week's stock market trading. The S&P 500 index leapt 2.7%. The Nasdaq composite surged 4.2%. The small-cap Russell 2000 popped 2.8%.
The bounce to start the week wasn't a real surprise after a long string of losses. On Thursday morning, the rally attempt appeared to be in trouble, selling off on hot inflation data and Meta Platforms tumbling on guidance. But the major indexes slashed losses, in part because Meta's sell-off on heavy AI spending buoyed Nvidia, Broadcom and AI hardware.
On Friday, the rally revved higher, fueled by strong earnings and spending plans from Microsoft and Google parent Alphabet.
The Nasdaq soared 2% on Friday, but volume was slightly lower vs. Thursday, so that didn't qualify as a follow-through day. However, a large number of leading stocks flashed buy signals or extended moves.
The major indexes could face resistance at the 50-day line, with the S&P 500 and Nasdaq nearly at the key level. A heavy calendar of earnings and economic news awaits investors in the coming week.
The 10-year Treasury yield rose 5.5 basis points for the week to 4.67%, up 48 basis points in just four weeks. On Thursday, the 10-year Treasury yield nearly hit 4.74%, the highest since Nov. 1.
Markets now see the first Fed rate cut in September, and that's no lock. Investors are roughly split on whether there will be one or two cuts in 2024, with a decent chance of no action at all.
The Fed meeting statement and Fed chief Jerome Powell, along with the April jobs report and other key data, should swing Treasury yields and rate-cut odds.
U.S. crude oil futures rose 2% to $83.85 a barrel.
Fed Meeting Due: Here Are The Rate-Cut Odds
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF gained 3.3% last week. The VanEck Vectors Semiconductor ETF roared 9.25%. Nvidia is the No. 1 holding with Broadcom stock also a key component.
The SPDR S&P Metals & Mining ETF dipped 0.1% last week. The Global X U.S. Infrastructure Development ETF climbed 2.3%. The SPDR S&P Homebuilders ETF gained 3.6%. The Energy Select SPDR ETF advanced 0.8%, and the Health Care Select Sector SPDR Fund added 0.7%, with Eli Lilly stock a notable holding.
The Industrial Select Sector SPDR Fund stepped up 1.8%. The Financial Select SPDR ETF gained 1.1%.
Reflecting more-speculative story stocks, ARK Innovation ETF jumped 4.9% and ARK Genomics ETF dipped 0.6%. Tesla is the No. 1 holding across Ark Invest's ETFs.
Time The Market With IBD's ETF Market Strategy
Nvidia, AI Chip Stocks Flash Buy Signals
Nvidia stock jumped 15.2% last week to 876.90. Friday's 6.1% gain pushed NVDA stock back above the 50-day line and just above a downward-sloping trendline, offering an early entry. Nvidia stock has a 974 buy point.
Broadcom stock gained 11.6% last week and 3.8% on Friday, moving above the 50-day line to 1,344.05. That could offer an aggressive entry. AVGO stock has a 1,403.98 buy point from a double-bottom base.
Astera Labs stock skyrocketed 31.8% for the week to 85, matching a record close. Friday's 18.7% spike pushed the March AI chip IPO above resistance around 75, offering an entry. But shares now seem extended. ALAB stock has an official IPO base buy point of 95.21. Astera earnings are due May 7.
AI chip plays surged on tech titans' heavy spending.
Super Micro and AMD results on Tuesday night could swing the group, along with Amazon comments on AI spending. SMCI stock and AMD are still well below their 50-day lines, though Super Micro had a strong week. Amazon stock rebounded back above the 50-day.
AI Investing And 4 More Predictions For The Next Decade
Other Stocks Clearing Buy Points
KLA stock jumped 12.4% to 706.26 for the week. On Friday, the chip equipment maker popped nearly 5% following strong earnings, clearing the 50-day and breaking a trendline. That offered an early entry. KLAC stock has 729.15 buy point from a flat base.
Cava stock surged 16.7% to 69.61, reclaiming the 50-day line on Thursday and then racing higher on Friday. The relative strength line hit a new high, signaling Cava's outperformance vs. the S&P 500. On Friday morning, the Mediterranean-themed eatery cleared a trendline, offering an aggressive entry. But by the close, Cava stock was extended. Investors could wait for a pullback or a for a proper base to form.
AppLovin jumped 10.5% to 73.82 in the past week, rebounding from the 50-day/10-week lines for the first time since a late-January breakout. Friday's 6.7% gain sent APP stock rebounding above the 21-day line and breaking a short trendline.
Embaer stock, after pulling back gracefully over the prior four weeks to the 10-week line, rebounded this past week; it's up 9.25% to 25.98. That offered a buying opportunity in the Brazilian jet maker. It now has a new flat base with a 27.25 buy point, according to MarketSurge analysis.
Eli Lilly, Novo Nordisk
Eli Lilly reports early Tuesday while Novo Nordisk is on tap before Thursday's open. Expect strong growth thanks to booming demand for the weight-loss drugs. Investors will be looking for guidance on production as well as progress on next-generation obesity figures.
Eli Lilly and Novo Nordisk stock are in flat bases, but Lilly has fallen below the 50-day line while Novo is right around that key level.
What To Do Now
Friday is good example of why investors need to stay engaged and have their watchlists ready.
With the Nasdaq roaring higher, a bevy of stocks ran past buy points. While many are still in range, it's helpful to buy as close to the entry as possible. In some cases, such as Cava and Astera Labs, if you didn't take advantage Friday morning, the stocks quickly became extended.
Friday was a day to consider making some buys. However, the heavy earnings and economic news this coming week, along with 50-day line tests for the S&P 500 and Nasdaq, provide reasons not to ramp up exposure aggressively.
If the market rally and your holdings continue to make progress, you can add exposure as more stocks trigger entries.
So make sure your watchlists are up to date. Stocks that looked damaged on Thursday morning may be actionable or setting up. And while Nvidia and AI names are standing out again, market leadership is broad.
Your watchlists and portfolio should reflect that.
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