Investors fell back in love with technology for at least one trading session as the Nasdaq led major indexes in a broad rally Monday. All but two of the Magnificent Seven megacap stocks ended up in positive ground on the stock market today following an announcement over the weekend that President Joe Biden will not run for reelection, paving the way for Vice President Kamala Harris from the tech-rich state of California to be his successor on the ticket.
The Nasdaq composite led the charge with a 1.6% surge, tallying a gain of 280 points in the process. At 18,007, the tech-fortified index also expanded its gain in 2024 to roughly 20%. It rebounded 43% in 2023 after the 2022 bear market. The Nasdaq 100, covering the 100 largest nonfinancial companies on that exchange, jumped 1.5% and traded not far from session highs.
Stocks on the benchmark S&P 500 made a similar move, as gains ended the day up 1.1%, near session highs.
The Dow Jones Industrial Average lagged the other indexes but still managed a 0.3% gain. At the day's high of 40,472, the blue chip gauge had risen 7.4% for the year.
The Russell 2000 eased in the early going, then reversed bullishly for a 1.7% rise at closing time. The gains across key equity indexes also affirmed healthy breadth in the stock market today.
According to Thinkorswim data, rising stocks outdistanced falling ones on the Nasdaq exchange by roughly a 7-to-3 ratio. That's bullish for long investors. On the New York Stock Exchange, gainers topped losers roughly 3 to 1.
Volatility in the options market plummeted. The Cboe Market Volatility index fell nearly 10% to 14.89, halting a five-session climb. However, keep in mind that a bevy of earnings news hits the wires this week and during the next two weeks.
Updated 3:26 p.m. ET
CrowdStrike Plummets Again
Despite the prosperity among the indexes, cybersecurity software leader CrowdStrike got slammed again. Its 13% bloodletting Monday sent shares below the 200-day moving average.
Continued weakness below this key technical level would mark a time to lock in gains by CrowdStrike holders. Investors should also cut losses on recently bought shares and wait for a new bullish chart setup.
CrowdStrike blamed a malfunction in its Microsoft Windows-related software update across its network security products for Friday's global shutdown of various corporate and nonprofit clients.
But the company actually issued a key sell rule on Thursday as it fell 3.4% to 343.05. On that day, the large-cap tech slid bearishly further below the 50-day moving average and 10-week moving average in accelerating volume. Also, CrowdStrike plunged below a cup and its flawed, droopy handle with a buy point of 358.84, an expectation breaker.
Updated on 2:46 p.m. ET
How The Biden Announcement Hit Markets
Numerous Democratic senators and representatives had publicly called for Biden to step down from the race, but Sunday's announcement still seemed to come as a surprise for stock investors.
Biden also gave his official endorsement of Harris, a former California U.S. Senator who also served as that state's attorney general, to lead the charge in the race vs. former President Donald Trump.
Looking at the daily moves of IBD's 197 industry groups, semiconductor equipment led the way, up 4%. Agricultural operations, machinery automation, fabless semiconductor, internet content and automaker stocks also bloomed with gains of 2% or more.
On the downside, soap, wholesale food, security software and integrated telecom services firms dropped 1% or more on a price-weighted basis.
Stock Market Today: Small, Midcap Stocks Cling To Gains
Meanwhile, small and midcap stocks refused to step back after some strong gains recently. The S&P MidCap 400 roared as much as 1% higher after being off mildly early in the session. Midcap Armstrong World Industries, part of the construction group, led the upside and broke out of a cup pattern.
A New Options Trade In Microsoft Stock
Armstrong World, the Lancaster, Pa.-based flooring and ceiling products firm has made substantial progress since shares eclipsed a trendline entry near 115. The stock gained more than 11%. But on Monday, the stock also surpassed a 125.56 buy point in a cup without handle.
At 127, the stock remains in the 5% buy zone.
Armstrong's relative strength line has risen sharply in recent weeks, cracking a four-month downtrend. That's bullish, because Armstrong is now outperforming the S&P 500.
According to IBD Stock Checkup, the midcap growth stock — valued at $5.6 billion in the stock market today — holds solid ratings including an 87 Earnings Per Share score and a 90 Relative Strength Rating.
Updated on 12:01 p.m. ET
Microsoft Leads Dow Higher
Within the Dow Jones index, Microsoft led the charge. The cloud computing and AI software leader stormed 6.25 points higher, or 1.4%. Microsoft stock is a buy now, based on the IBD methodology for selecting, buying and selling great stocks. Also, the stock appears to be getting support after a pullback to the 10-week moving average.
Salesforce and Amgen joined four other members of the Dow industrials with gains of one point or more. But Verizon slumped more than 6% following tepid Q2 results. The wireless and business communications titan reported a 5% dip in profit to $1.15 a share. Sales edged up 1% to $32.8 billion.
Verizon is trying to hold its own long-term 200-day moving average.
Stock Market Today: Why Nvidia Got These Price Target Hikes
Updated on 10:45 a.m. ET
Techs Rally Back
Last week, the Nasdaq 100 got torched by sellers, down 4%. Meanwhile, over the last two weeks, the Russell 2000 gained nearly 8%.
Inside the MarketSurge Growth 250, big winners included Camtek (up as much as 4.7%, briefly retaking its 50-day line); American Superconductor (up 7% before shaving that gain to 5%), Nvidia (up 4.2% to a session high of 123.28) and Badger Meter (up 2.4%), which got some airplay on IBD Live last week.
Nvidia rallied more than 3% in the early going and held much of that gain. The Leaderboard mainstay reportedly got a number of sell-side Wall Street firm upgrades on the back of news that it is modifying the architecture and capability of its next-generation AI data center chip, nicknamed Blackwell, for the China market.
Indeed, buyers sought bargains in the chip field following last week's big slide. The Van Eck Semiconductor exchange traded fund rebounded 2.7% and is trying to stay within arm's reach of its rising 50-day moving average, a bullish sign.
Volume was running sharply higher vs. the same time Friday on the Nasdaq and nearly 3% lower on the NYSE.
Stock Market Today: Bitcoin Hits A Speed Bump
Elsewhere in the stock market, bitcoin-related ETFs ran into selling.
The popular iShares Bitcoin Trust initially gained nearly 1%, but cooled off 0.7%. The ETF has been in a four-month base. Grayscale Ethereum Trust fell 1.4%.
Notice on a weekly chart that after Grayscale Ethereum's stupendous rise of 50% two months ago, it failed to break out. A new base is forming between 26 and 34. Watch for a potential trendline entry near 32-33.
Robinhood Markets, whose trading app allows users to also buy and sell bitcoin-related assets, jumped 1.2%. The daily chart highlights three breakout points: 1) 13.51 in a six-week base built early in 2024; 2) a seven-week base at 20.55, cleared in May; and 3) a narrow, tight consolidation that offered an aggressive entry at 24.28.
Stock Market Outlook For The Next 6 Months
Outside The Stock Market Today
Meanwhile, gasoline futures fell 1% to $2.42 a gallon, pretty much mirroring a 1% slide by West Texas Intermediate crude oil futures to $77.78 per barrel. Natural gas, however, as volatile as ever, spiked 4.4% to $2.22 per million British Thermal Units.
Copper futures sank 1.4% to $4.18 per pound.
Gold held steady near $2,400 an ounce. The precious metal dipped $2.50, around 0.1%, to $2,396 per ounce. Silver eased 0.5% to $29.13.
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