Dow Jones futures rose Monday morning, along with S&P 500 futures and Nasdaq futures. Bitcoin and other cryptocurrencies jumped as President Donald Trump expanded on his commitment for a U.S. crypto strategic reserve.
Big Trump tariffs and the jobs report loom.
The stock market suffered sharp but uneven losses for most of the week. The Nasdaq dived to 2025 lows, but the tech-heavy index rebounded strongly from key support Friday on inflation data and Trump tariff hopes. Growth giants such as Nvidia, Palantir Technologies and Tesla also are heavily damaged.
The Dow Jones gained ground last week, reclaiming a key level, even with Nvidia stock tumbling, reflecting strength or resilience in financials as well as some industrials, medicals and retailers.
A stock market rally attempt is underway, but it's just one day. Investors should be cautious, but looking for stocks showing strength.
Warren Buffett's Berkshire Hathaway, Mastercard and Tradeweb stock, all cited below, joined SwingTrader on Friday. Tradeweb Markets was Friday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures were 0.2% above fair value. S&P 500 futures climbed 0.4% and Nasdaq 100 futures rose 0.6%.
President Trump reaffirmed his desire for a U.S. crypt reserve on Sunday, this time naming Bitcoin, Ethereum and several other digital assets for inclusion. Bitcoin was at $93,000 early Monday after topping $95,000 at one point Sunday. Hard-hit peers saw even bigger gains. Bitcoin was at $84,108.22 as of 4 p.m. ET Friday.
The 10-year Treasury yield rose to 4.25%, partly due to European yields jumping on calls from Germany and others to step up defense spending to aid Ukraine.
Two Chinese manufacturing indexes rose more than expected in February, signaling an improving economy even as Trump tariffs start to roll in.
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 Attempt
The stock market rally had a tough week, with heavy selling in growth stocks continuing and more-defensive areas holding up. The major indexes rebounded Friday on cooling inflation data, getting another burst near the close on Treasury Secretary Bessent's tariff comments.
Bessent said Mexico "perhaps" could match U.S. tariffs on China, adding that it would be a "nice gesture" if Canada also did so. That points to a possible deal to avoid 25% Trump tariffs on Mexico and Canada, but so far those are due to kick in on Tuesday. Trump also plans to hike China tariffs by another 10% on Tuesday.
The Dow Jones Industrial Average climbed 0.95% in last week's stock market trading, moving above the 50-day line. The S&P 500 index sank 1% for the week, but isn't too far off the 50-day line after Friday's gains. The Nasdaq composite tumbled 3.5%, even with Friday's 1.6% bounce from near the 200-day moving average. The small-cap Russell 2000 retreated 1.5%, hitting five-month lows.
The Nasdaq and S&P 500 have nearly round-tripped their postelection runs, with the Russell 2000 already well below where it was on Nov. 5.
Friday marks the start of a new stock market rally attempt. It doesn't mean much for the market to have one good day — even a great day — in the midst of a downturn. The key is whether the rally attempt can build momentum and stage a follow-through day.
Defensive growth areas such as insurers, financial market plays, banking giants, aerospace, as well as some medicals and retailers, are doing fairly well. Berkshire stock, Mastercard, Tradeweb Markets, Brown & Brown, Carpenter Technology, Walmart, RTX Corp., Eli Lilly and Urban Outfitters are among the names.
Many have flashed buy signals in the past week. However, if the S&P 500 continues to trend lower, even these sectors may struggle to do more than hold their own. And if the market returns to a risk-on mode, money may flow back into growth.
The 10-year Treasury yield plunged 19 basis points to 4.23%, below the 200-day line and the lowest point since early December. On Friday, investors will get the January jobs report.
U.S. crude oil futures dipped 0.9% to $69.76 a barrel last week.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF sank 2.6% last week. The iShares Expanded Tech-Software Sector ETF gave up 3%. Palantir stock is a key IGV member. The VanEck Vectors Semiconductor ETF plunged 6.9%. Nvidia stock is the dominant holding in SMH.
ARK Innovation ETF dived 7.6% last week and ARK Genomics ETF sold off 8.6%. Tesla stock is the No. 1 holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 0.9% last week. The Energy Select SPDR ETF edged up 0.1% and the Health Care Select Sector SPDR Fund gained 1.7%. The Industrial Select Sector SPDR Fund climbed 1.1%.
The Financial Select SPDR ETF bounced 1.7%, just below record highs. Berkshire stock is a top component in XLF, with Mastercard also a big holding.
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Growth Titans Tumble
Nvidia stock skidded 7.2% to 124.81 in the past week, plunging below its 50-day and 200-day lines. Shares did pop 3.9% on Friday, not far from their 200-day. The AI chip giant delivered strong earnings and guidance Wednesday night, but didn't blow out estimates. Also, margins fell in the latest quarter, and will fall again as Blackwell chip production ramps up.
NVDA stock's weekly retreat was joined by other AI chipmakers as well as broader AI plays.
Palantir stock plunged 16.2% to 84.91 in the past week, breaking below the 50-day line and falling back into the top of a prior consolidation, round-tripping a post-earnings move in early February. PLTR stock only eked out a 0.1% uptick on Friday.
Tesla stock sold off 13.25% to 293.05, but rebounded 3.9% on Friday after testing the 200-day line. Shares of the EV giant have plunged for six straight weeks, close to round-tripping its postelection gains. CEO Elon Musk's Trump ties may be further damaging the Tesla brand with core customers. TSLA is 40% below its Dec. 18 peak of 488.54.
On Saturday, China EV rivals reported February sales, with BYD's up 164% vs. a year earlier.
Early Monday, Nvidia stock edged lower, while Palantir and Tesla stock rose 3%. PLTR stock is set to retake its 50-day line.
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What To Do Now
The stock market has been roughed up. A market rally is underway. But are bulls going to make a real stand or a token effort?
If this is the start of a meaningful stock market rally that lasts several weeks or months, investors will have plenty of time to take advantage. If not, you'll be glad you didn't jump in too quickly.
Aggressive traders could have tried small positions on a defensive growth play or two flashing buy signals, such as Warren Buffett's Berkshire or Mastercard. But you have to be ready to exit very fast.
Being patient, awaiting more market strength, is generally the smart course.
Focus on revamping your ., looking for stocks showing relative strength even if the charts don't look pristine. Definitely look beyond the old growth leaders such as Nvidia, Tesla and Palantir stock. Some may recover soon, but many could take months to recover.
In the coming week, Trump tariffs and the jobs report could be market movers. It's unclear if markets have really priced in the impact of huge tariff hikes, hoping for another last-minute reprieve.
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