Dow Jones futures fell modestly Monday morning, along with S&P 500 futures and Nasdaq futures.
Sometimes, the stock market is fairly simple. Two broad factors have driven the market rally since the end of October: Expectations of Fed rate cuts and the ongoing artificial intelligence boom.
In the past week, the Federal Reserve reaffirmed projections to cut rates three times in 2024. Meanwhile, Nvidia, Broadcom and Microsoft had upbeat AI events, while Micron Technology reported a surprise profit and strong guidance thanks to AI tailwinds.
Nvidia, Broadcom and Micron stock had big weekly gains, along with a number of other AI plays. Microsoft stock had a modest gain to new highs, but is still actionable.
But there was broad-based strength, with many sectors enjoying big gains while a diverse group of stocks flashed buy signals, including financials.
Uber Technologies, Eli Lilly, CrowdStrike Holdings are leading stocks setting up in messy consolidations.
Investors can still take advantage of some actionable names using incremental buys, perhaps looking beyond extended AI leaders like Nvidia stock.
China has begun implementing guidelines to keep Intel and Advanced Micro Devices microprocessors out of government PCs and servers, the Financial Times reported Sunday. Intel and AMD stock fell modestly early Monday.
Boeing CEO Dave Calhoun will step down at year-end, while Chairman Larry Kellner will leave at the aerospace giant's annual meeting in May. Stan Deal, who ran Boeing Commercial Airplanes, is out immediately. The shakeup is the latest fallout from the Jan. 5 incident in which a 737 Max jet lost part of its fuselage during an Alaska Airlines flight. Boeing stock rose modestly.
Nvidia and Uber stock are on IBD Leaderboard. Microsoft stock is on IBD Long-Term Leaders. Nvidia and CrowdStrike stock are on the IBD 50. Broadcom stock, CrowdStrike and Nvidia are on the IBD Big Cap 20 list. Uber was Friday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.25%, even with Boeing stock offering a slim lift. S&P 500 futures dipped 0.4%. Nasdaq 100 futures lost 0.6%.
The 10-year Treasury yield edged up to 4.24%.
Crude oil futures edged higher.
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 week on a dovish Fed and bullish AI prospects. The major indexes rose strongly, all hitting record highs, though they backed off Thursday's intraday highs.
The Dow Jones Industrial Average gained 2% in last week's stock market trading. The S&P 500 index popped 2.3%. The Nasdaq composite jumped 2.85%.
The small-cap Russell 2000 rose 1.6%, hitting a 23-month closing high Thursday before pulling back Friday.
The Nasdaq decisively cleared trading going back to early February, while the Russell 2000 is back above a range from late December to the end of February. That meant that a number of leading stocks broke out or flashed other buy signals.
Meanwhile, the S&P 500 and Nasdaq are not extended from the 50-day line, though it wouldn't take much for that to happen.
Nvidia and other big AI stocks like Micron, Broadcom and Microsoft buoyed the major indexes somewhat.
The 10-year Treasury yield fell 9 basis points to 4.22%, retreating after nearly hitting 2024 highs on Monday.
U.S. crude oil futures rose 5 cents to $80.63 a barrel last week, backing off from 2024 highs
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF bounced 2.9%, with Microsoft stock a huge holding and CrowdStrike also in IGV. The VanEck Vectors Semiconductor ETF rebounded 4.5%. Nvidia is the dominant SMH holding, with Broadcom stock and Micron also key members.
SPDR S&P Metals & Mining ETF rose 2.5% last week. The Global X U.S. Infrastructure Development ETF popped 3.2%. U.S. Global Jets ETF ascended 3.4%. SPDR S&P Homebuilders ETF leapt 4.8%. The Energy Select SPDR ETF gained 0.9%, nearing a 52-week high. The Health Care Select Sector SPDR Fund edged higher. The Industrial Select Sector SPDR Fund advanced 2.6%.
The Financial Select SPDR ETF rose 1.5% and the SPDR S&P Regional Banking ETF climbed 1.3%
Reflecting more-speculative story stocks, ARK Innovation ETF rose 1.5% last week and ARK Genomics ETF fell just over 1%.
China Curbs AMD, Intel Chips As U.S. Decoupling Continues
Stocks Near Buy Points
Uber stock has been consolidating for several weeks, which investors can treat as a de facto flat base with an 82.14 buy point. Shares jumped 5.5% to 80.23 this week, rebounding from the 10-week line. Investors could use Thursday's high of 81.23 as a slightly early entry.
Eli Lilly stock also has a faux flat base, with an 800.78 buy point. LLY stock has been finding support at the 21-day moving average recently. Shares rose 2.1% to 770.30
CrowdStrike stock gained 3.8% to 327.58 last week, bouncing from the 10-week line. The cybersecurity stock has been trading tightly around the 21-day line, but with a couple of huge exceptions. Shares tumbled Feb. 21 in reaction to the big Palo Alto Networks sell-off, but quickly bounced back. Shares again tested the 50-day line on March 5, just ahead of earnings. Shares soared March 6 following results, but slashed gains. A move above the Feb. 15 high of 338.45 could serve as an entry.
The Hot Buzzword For Cybersecurity Stocks Isn't AI Anymore
AI Stocks
Nvidia stock leapt 7.34% to 942.89, its 11th straight weekly gain, hitting a record close on Friday. Late Monday, the AI chip leader unveiled its latest AI processor. The Blackwell chip has much faster speeds but will be priced aggressively. Several more analysts raised NVDA stock price targets to 1,000 or above.
Broadcom stock surged 9.55% to 1,353.47, roaring from its 50-day and 10-week lines. There may have been a brief opportunity to buy AVGO, but it's extended now. Broadcom rallied on its own AI event Wednesday.
Micron stock spiked 18.2% to 110.21, vaulting to a record high. The memory-chip giant reported a surprise profit and guided higher, citing AI-related growth.
Microsoft stock climbed 3% to 428.74, hitting a record high. The Dow tech giant unveiled Surface AI PCs and showed off Copilot functionality at its "New Era Of Work" event on Thursday. MSFT stock is still in range of a 420.83 buy point from a not-quite flat base. It's also in range of the 10-week line.
What To Do Now
The market rally had a strong week on big positive news, with a number of stocks from a variety of sectors flashing buy signals.
Investors could have taken advantage of those opportunities, especially if they had scaled back exposure recently. But it's not a time to be ramping up exposure aggressively. Make new purchases incrementally, looking beyond a handful of AI names.
Don't buy extended stocks, even hot artificial intelligence plays.
Definitely work on those watchlists for actionable stocks and setups. You want to find the best-possible names ahead of time and be ready to pounce when they trigger your entries.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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