Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.
The stock market suffered damaging losses in the past week, with the Nasdaq finally closing below the 50-day line, with Treasury yields surging to 52-week highs.
Nvidia sold off after hitting record highs. Nvidia chipmaker Taiwan Semiconductor was little changed for the week, but held a buy point amid booming sales.
Tesla fell for the week. But TSLA stock found key support Friday as it launched the new Model Y.
Delta Air Lines, FTAI Aviation, Globus Medical, Constellation Energy broke out Friday, while Meta Platforms reclaimed a buy point. More broadly, energy plays, discounter retailers and medical products firms showed strength.
But the market has been choppy with a clear downward bent. Investors should be looking to cut exposure, but preparing for the next rally.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Taiwan Semiconductor stock and Nvidia are on the IBD 50.
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.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally started the week off well, with the S&P 500 regaining its 50-day line. But then stocks sold off, with the S&P 500 and finally the Nasdaq composite dropping below that key level.
The Dow Jones Industrial Average gave up 1.9% in last week's stock market trading, hitting its lowest level since Nov. 5, Election Day. The S&P 500 index also declined 1.9%, to its lowest level since Nov. 6. The Nasdaq composite shed 2.3%, falling intraday Friday to its lowest since late November. The small-cap Russell 2000 tumbled 3.5%, hitting a three-month low.
All of the major indexes staged big, outside, downside weeks, undercutting the lows of their recent ranges.
On the upside, the Nasdaq and S&P 500 retaking their 50-day lines would be a good first step. The Jan. 6 intraday highs would be another big hurdle, with the late 2024 all-time highs just above that. Along the ways could be lots of potential resistance.
Indeed, a Friday rally off lows stalled out midafternoon with the Nasdaq just shy of its 50-day line.
Meanwhile, there's little support to the downside for the Nasdaq or S&P 500, though the ailing Russell 2000 is testing its 200-day. The market would look broken if the major indexes decisively below Friday's lows, signaling the start of a true correction.
The 10-year Treasury yield soared 17.5 basis points to 4.77%, the highest since November 2023.
U.S. crude oil futures jumped 3.5% to $76.57 a barrel last week, with all of that coming Friday as the Biden administration imposed sweeping new sanctions on Russia's oil industry.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF slumped 3.1% last week. The iShares Expanded Tech-Software Sector ETF sold off 4.2%. The VanEck Vectors Semiconductor ETF fell 1.9%. Nvidia and Taiwan Semi stock are huge SMH holdings.
ARK Innovation ETF lost 4% last week and ARK Genomics ETF retreated 3.7%. Tesla stock is still a major holding across Ark Invest's ETFs. Cathie Wood's Ark also owns a lot of Nvidia.
SPDR S&P Metals & Mining ETF declined 0.4% last week. U.S. Global Jets ETF jumped 4.3%, with Delta stock a key holding. SPDR S&P Homebuilders ETF sank 2.3%. The Energy Select SPDR ETF rose 1% and the Health Care Select Sector SPDR Fund climbed 0.5%.
The Industrial Select Sector SPDR Fund stepped down 1.05%. The Financial Select SPDR ETF fell back 2.6%.
Time The Market With IBD's ETF Market Strategy
Nvidia Stock
NVDA stock fell 5.9% for the week to 135.91, skidding below the 50-day line. That's after touching a record 153.13 soon after Tuesday's open. Shares sold off following CEO Jensen Huang's CES speech, despite analysts' rave reviews. Also, the U.S. reportedly will impose new curbs on AI and other advanced chips.
Taiwan Semiconductor jumped to a record 222.20 on Monday, but closed the week down 0.1% to 208.46. However, TSM stock held a 205.63 cup-with-handle buy point thanks to Friday's slight upside reversal.
On Friday, Taiwan Semi reported December sales surged 58% vs. a year earlier in local currency, led by AI chip demand from Nvidia and others. That beat views.
Tesla Stock
Tesla stock fell 3.8% to 394.74 for the week, dropping below 21-day line. On Friday, shares rebounded from the 10-week line, closing down just 20 cents.
On Friday, Tesla launched the refreshed Model Y with a slightly longer range and higher price than the old Model Y. The "Juniper" Model Y has a clearly different front and back, as opposed to the minor exterior changes to the updated Model S, X and 3.
China deliveries are due to start in March, with Europe and the U.S. likely soon after.
What To Do Now
All the major indexes are in downtrends, with even the Nasdaq below the 50-day line.
Leading stocks were a little better, with a number actually flashing buy signals on Friday and many others finding support. But those will struggle to hold if the indexes don't rebound, while others like Nvidia are breaking lower.
But if you're buying stocks now, you must be extremely nimble, with a swing trader mindset.
In general, investors should have been cutting exposure in recent days.
The stock market will bounce back, whether it's this coming week, next month or later. Don't try to predict the turn, or rush in at the first uptick. Wait for real strength, and ready to take advantage of the opportunities. That means staying engaged and working on watchlists, focusing on stocks holding key levels and showing relative strength.
Earnings season will pick up this coming week. The JPMorgan Healthcare Conference and the ICR Conference will likely include a slew of preliminary results and announcements from the medical and retail/consumer sectors. Inflation data and other economic reports will keep the news cycle busy.
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