Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures, while Treasury yields fell, with Wall Street approving of President-elect Donald Trump's pick for Treasury Secretary.
The stock market rally had a strong week, though Google-parent Alphabet and some megacaps muted Nasdaq gains late in the week.
One of those tech titans, Nvidia, wavered after earnings, ending the week flat but still in a buy zone. However, recent IPO Astera Labs is now the clear leader in AI chip stocks.
Leading stocks boomed, with many flying into and often out of buy zones last week, including ALAB stock. TechnipFMC, ACV Auctions, TJX Cos. and Ryan Specialty Holdings are all in traditional buy zones.
Burlington Stores and Dell Technologies also are in buy zones after Friday breakouts. But both report on Tuesday.
So do CrowdStrike, Workday, Abercrombie & Fitch and Nutanix. CrowdStrike is extended. ANF stock is near a trendline entry. Workday is working on a handle buy point. Nutanix is near an alternate handle entry.
Investors can take advantage of new entries, but stay cool. Don't treat the past few weeks as a "new normal" for stock performance.
Nvidia stock is on IBD Leaderboard, with Astera Labs on the Leaderboard watchlist. Astera Labs stock and Nvidia are on the IBD 50.
Elon Musk Says FSD V13 'Coming Soon' As Tesla Cuts China Prices
Trump Picks Bessent For Treasury Secretary
President-elect Trump late Friday named hedge fund chief Scott Bessent to be his Treasury Secretary. He's generally seen as a Wall Street-friendly choice. He'll help push Trump's efforts for tax cuts and deregulation. He'll also be a key player in implementing Trump tariff hikes, with Wall Street hoping that Bessent will seek to implement increases carefully.
Dow Jones Futures Today
Dow Jones futures rose 0.7% vs. fair value. S&P 500 futures climbed 0.5% and Nasdaq 100 futures advanced 0.5%.
The 10-year Treasury yield fell several basis points to 4.32%. Gold futures fell 1%, also likely reflecting Trump's Treasury pick.
Crude oil futures edged lower.
Bitcoin, which got as high as $99,768 on Friday, was above $97,000 early Monday after sinking to about $95,800 Sunday morning.
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 had a strong performance that was even better than major indexes suggested, especially the Nasdaq.
The Dow Jones Industrial Average gained nearly 2% in last week's stock market trading, setting a record close Friday. The S&P 500 index and Nasdaq composite gained 1.7%. The small-cap Russell 2000 surged 4.5%.
All of these indexes tested their 21-day lines multiple times in the past week, moving off those levels. The Nasdaq, which hit resistance at the 19,000 level, is still relatively close to the 21-day. But it's also close to its postelection peaks.
The Invesco S&P 500 Equal Weight ETF popped 2.55%, outperforming the S&P 500 and matching a record high Friday.
The First Trust Nasdaq 100 Equal Weighted Index ETF bounced 3.5%, outperforming the Nasdaq 100 and the Nasdaq.
Stalling megacaps are not just masking the underlying market strength, they may be helping to fuel the underlying strength. Big institutions selling relatively small slices of, say, Nvidia or Google might still be raising several billion dollars or more. That's massive firepower for bidding up much-smaller stocks.
The 10-year Treasury yield fell two basis points to 4.41%, trading in a tight range near five-month highs. The two-year Treasury yield, more closely tied to the Fed rate outlook, climbed for a 10th straight week, up seven basis points to 4.37%.
U.S. crude oil futures jumped 6.5% to $71.24 a barrel last week.
Bitcoin surged 10.8% to $99,290.67, up nearly 49% over the past four weeks.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF soared 9.2% last week to a two-year high. The iShares Expanded Tech-Software Sector ETF popped 4.9% to record levels. The VanEck Vectors Semiconductor ETF gained 1.95%, just below the 10-week line. Nvidia stock is the dominant holding in SMH.
ARK Innovation ETF jumped 5.1% last week and ARK Genomics ETF rallied 5.2%.
SPDR S&P Metals & Mining ETF ran up 5.5% last week. The Global X U.S. Infrastructure Development ETF advanced 3.6%. U.S. Global Jets ETF fell 1.1%. SPDR S&P Homebuilders ETF bounced 3.6%. The Energy Select SPDR ETF climbed 2.7% and the Health Care Select Sector SPDR Fund rebounded 1.6%.
The Industrial Select Sector SPDR Fund notched a 2.5% gain. The Financial Select SPDR ETF rose 1.7%.
Time The Market With IBD's ETF Market Strategy
Nvidia Stock
Nvidia stock fell 3 cents to 141.95 for the week. Shares briefly spiked to a record 152.89 Thursday morning following earnings, but finished the week just below the 21-day moving average. NVDA stock held the 140.76 consolidation buy point, according to MarketSurge. But it's gone nowhere over the past month, and is essentially flat since the June peak.
Late Wednesday, Nvidia reported a 103% EPS gain last quarter with revenue soaring 94%, both beating. But the AI chipmaker only guided slightly higher on the current quarter, which will include Blackwell AI chip shipments.
Taiwan Semiconductor is hitting resistance near an early entry, but Broadcom and Arm Holdings are clear laggards.
Astera Labs: New AI Chip Leader
Astera Labs is a minnow next to these chip giants, with $113.1 million in Q3 sales vs. Nvidia's $35.1 billion. But the 2024 IPO is the clear AI chip stock leader right now. The company is now profitable with huge revenue growth vs. a year earlier and quarter on quarter.
Shares have nearly tripled from their early August low of 36.22. Last week, Astera Labs stock leapt 18.3% to 102.28. On Thursday, following Nvidia earnings, ALAB stock cleared a 100.06 high-handle entry on a consolidation that started in late March. Astera Labs closed Friday in range of that entry, though shares were extended 47% above their 50-day line.
Astera rose modestly early Monday on Robinhood.
What To Do Now
The stock market rally is looking strong, with the indexes near record highs and leaders powering higher.
Some of the megacaps may be sitting out for a time. Google stock and Microsoft are clear laggards right now, but Meta Platforms and Amazon.com have faded off. Nvidia stock is in a buy zone, but it isn't going anywhere.
So, investors need to adjust. Luckily, a slew of other stocks have been acting well from a variety of sources.
Many stocks flashed buy signals last week, offering opportunities to add exposure. There are still stocks in buy zones or setting up.
Investors, who should be heavily invested, can look for incremental buys or add-on purchases, while also paring laggards.
But after the huge gains in many leaders over the past few weeks, keep a level head. Weekly gains of 10%, 20% in leading stocks aren't the new normal. Enjoy these periods, but buying extended and other super-aggressive moves that worked in the past few weeks could backfire now.
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