Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures, with Nvidia in focus this coming week. Warren Buffett's Berkshire Hathaway reported fourth-quarter earnings.
The stock market rally suffered a big setback in the past week. The S&P 500 hit record highs on Wednesday, but the major indexes ultimately suffered solid to sharp losses, with the Dow Jones, Nasdaq and Russell 2000 breaking key support on Friday. The heaviest damage was in highly valued growth stocks, such as Palantir Technologies and AppLovin.
Two of those huge losers, Axon Enterprise and Cava Group, are on tap this week. So are software giants Salesforce.com and Snowflake, with SNOW stock near a buy point.
But the main event will be Nvidia earnings. Nvidia stock has been trading sideways since mid-2024, but is not far from a buy point.
A Tesla bounce faded, with shares extending a weekly losing streak. Tesla stock is back near 2025 lows.
Berkshire Earnings
Berkshire's operating earnings surged 71% to $14.53 billion. The conglomerate bought back no stock in Q4 and just $2.9 billion for 2024, the lowest since 2018. Cash holdings swelled to a fresh record of $334.2 billion.
Warren Buffett also released release his annual shareholder letter.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
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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Stock Market Rally
The stock market rally saw declines on the major indexes ramp up Friday as fresh economic data signaled slower growth but also rising inflation pressure. Growth stocks with high price-to-earnings ratios were the biggest weekly losers.
The Dow Jones Industrial Average slumped 2.5% in last week's stock market trading, breaking below the 50-day line as Walmart, UnitedHealth and Amazon.com weighed on blue chips. The S&P 500 index fell 1.7% to test its 50-day line after hitting a record high on Wednesday. The Nasdaq composite slumped 2.5%, below its 21-day and 50-day lines. The small-cap Russell 2000, which had been hitting 50-day resistance for the past month, plunged 3.7% to close below its 200-day line for the first time since late 2023.
The Invesco S&P 500 Equal Weight ETF fell 0.7%, fading late in the week, to test its 50-day line.
The First Trust Nasdaq 100 Equal Weighted Index ETF gave up 1.7% for the week, retreating from record highs earlier in the week to finish back in a recent consolidation, right around its rising 21-day line.
Meanwhile, highly valued and speculative growth plays suffered several days of heavy losses. The FFTY and ARK ETFs cited below reflect that weakness.
Palantir stock tumbled 14.9% for the week, to just below its 21-day line. Axon stock crashed 24.9%, wrecking a breakout in spectacular fashion. Cava stock dived nearly 18% to a six-month low. AppLovin stock gave up almost 19%, back into the top of a prior base. Reddit plunged 15.3% after selling off 12.8% in the prior week. These stocks all had huge runs over the past year, and may need to take a break.
China stocks are acting well, though many are extended now.
The 10-year Treasury yield declined six basis points to 4.42%, back near 2025 lows.
U.S. crude oil futures fell 0.4% to $70.40 a barrel last week.
Best Growth Stocks To Buy And Watch: IBD Watchlists
ETFs
Among growth ETFs, the Innovator IBD 50 ETF plunged 12.15% last week, tumbling from a two-year high Tuesday morning to undercut its 50-day line. The iShares Expanded Tech-Software Sector ETF sold off 5.9%, with CRM stock a notable holding. The VanEck Vectors Semiconductor ETF shed 1.1%, up solidly for the week until Friday's 3.1% skid. Nvidia stock is the No. 1 holding in SMH.
ARK Innovation ETF dived 10.15%, plunging from Tuesday's multiyear high to undercut its 50-day line by the end of the week. ARK Genomics ETF skidded 8.5%. Tesla stock is the largest holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF sank 3.9% last week. The Energy Select SPDR ETF climbed 1% and the Health Care Select Sector SPDR Fund advanced 1.1%.
The Industrial Select Sector SPDR Fund and Financial Select SPDR ETF both shed 2%.
Nvidia's Next Growth Story? Investors Have Been Waiting
Nvidia Earnings
Nvidia earnings are due Wednesday night with investors focused on Blackwell AI chip production and demand. There are concerns over whether demand for Nvidia's chips will remain hot in the wake of China's DeepSeek, suggesting less need for high-powered processors, as well as competition with custom AI chips from Broadcom and others.
Nvidia stock sank 3.2% to 134.40 for the week, declining 4.1% on Friday to drop just below the 50-day line.
Nvidia stock crashed Jan. 26 on the DeepSeek sell-off in AI hardware stocks, with a slow recovery. Shares have an ugly double-bottom base with a 148.97 buy point. A 143.44 handle entry is on track for Monday. Investors already could use 143.44 as a trendline buy point, though buying just before quarterly results is risky.
Nvidia earnings and guidance will be key for Broadcom, Taiwan Semiconductor and many other AI chip and hardware plays next week.
Tesla Stock
Tesla stock fell 5.1% to 337.80 for the week, with almost all of that on Friday. While that was modest compared to many other high P-E names, TSLA stock has fallen for five straight weeks. It's now down 31% from the Dec. 18 peak of 488.54. Shares aren't far from 2025 lows.
In addition to doubts about Tesla's latest self-driving targets, CEO Elon Musk risks further damaging the EV giant's brand with his increasingly political focus.
Tesla stock's woes are in contrast to China EV rivals BYD, XPeng and Li Auto. BYD and XPeng are greatly extended, while Li Auto cleared an early entry Friday.
Tesla Struggles As Rival Skyrockets On Self-Driving Push
What To Do Now
The stock market rally is hitting resistance at record highs for the S&P 500 and Nasdaq, while small caps are struggling. For growth investors, the sell-off in highly valued names is key. Palantir, AppLovin, Axon and other names may need to take a break and build new bases.
Investors should have reduced exposure over the past few days, especially in high-octane names. How much depends on how your positions are faring. If you were heavily loaded in stocks such as Axon and Cava, you might be largely in cash now. Others might still be solidly invested, taking some profits.
But be ready to take further action. Have exit strategies in place.
Don't neglect your watchlists. It wouldn't take much for the S&P 500 to be at record highs.
Nvidia earnings could have a huge impact on AI stocks and the broader market.
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