Dow Jones futures begin trading Sunday evening, along with S&P 500 futures and Nasdaq futures. Earnings season is winding down a bit, but inflation and other economic data is due to be released this week.
Stock markets have recovered from the global sell-off on August 5. Attempts to rise are underway, but a follow-up date needs to come.
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“Set-up Day” marks a step in the right direction: Look out for Cava, Costco, and ONON
NVIDIA (NVDA) continues to struggle. However, some AI-related stocks are doing well. Meta Platform (Meta), Palantir Technologies (P.L.T.R.), Service Now (now), Reincarnation (Internet of Things), Arista Networks (Annette) and Nvidia chipmaker Taiwan Semiconductor (TSMC).
Meanwhile, many stocks rose above their 50-day moving averages. Eli Lilly (Lily), Kava (Kava), Trade Desk (TTDD), Pending (Onon) and Costco Wholesale (Fee).
Nvidia shares, ServiceNow, Eli Lilly LeaderboardCAVA and Costco shares have been added to SwingTrader. Palantir shares, Samara, Arista Networks and ServiceNow are all IBD 50 ListPalantir and Arysta stock prices IBD Big Cap 20. Samsara was Friday’s IBD Stock Of The Day.
In the video embedded in the article, we discussed the market moves in detail and analyzed CAVA stock, Costco, and On Holdings.
Elon Musk interviews Donald Trump?
Former President Donald Trump said on August 6: Tesla (TSLATesla CEO Elon Musk is scheduled to interview Trump on Monday night. Musk, a Trump supporter, has not confirmed the interview. If the conversation does occur, it will likely include a discussion of Trump’s electric vehicle policies, where Trump has advocated eliminating subsidies and mandates for EVs and encouraging Chinese EV makers that rival Tesla. BYD (BYDDF), and plans to set up a factory in the U.S. Expect discussions on Bitcoin and cryptocurrencies.
Dow Jones Futures Today
Dow Jones futures will begin trading at 6pm ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight movements in Dow futures or any other stocks do not necessarily translate into actual trading in the next regular stock market session.
IBD experts break down major stocks and markets on IBD Live.
Stock market rise
Stock markets got off to a rough start to the week on Monday as the unwinding of the yen carry trade and delays to Nvidia’s AI chips combined with recession fears sparked a global sell-off with a massive spike in volatility.
But stock indexes recovered from Monday’s lows and stocks began to move higher on Tuesday as the yen stabilised and improving U.S. economic data eased fears.
The Dow Jones Industrial Average fell 0.6% on the stock market last week. The S&P 500 Index was down slightly. The Nasdaq Composite Index was down 0.2%. The Russell 2000, a small-cap index, was down 1.35%.
The Dow Jones Industrial Average recovered to close just above its 50-day line, but the Russell 2000 continues to face resistance at that level. The S&P 500 and Nasdaq have yet to break out of their 10-day lines, let alone their 21-day or 50-day averages.
The stock market has yet to confirm whether the uptrend will continue. It could happen at any time this week. It is important to remember that not all confirmed uptrends will be successful.
Major stock indexes took a breather on Friday, but a bright spot was the number of stocks that rose above their 50-day lines, including Kava, Eli Lilly and Costco. They joined a host of stocks across a range of sectors that are either poised for an early entry or showing signs of doing so.
U.S. crude oil futures rose 4.5% last week to $76.84 a barrel, snapping a four-week decline.
Government bond yields rebound as major data releases arrive
The 10-year Treasury yield rose 15 basis points to 3.94%. The yield on the 10-year Treasury note fell as low as 3.67% on Monday before rising above 4% intraday on Thursday.
The market is pricing in a rate cut at the Sept. 18 meeting, but it is unclear how big the cut will be, between 25 basis points or 50 basis points.
Next week, investors will learn the July producer price index on Tuesday and the consumer price index on Wednesday. On Thursday, they should prepare for the release of July employment reports from the Philadelphia and New York Feds, weekly jobless claims and regional manufacturing data for August.
These economic reports could trigger a follow-through day and send the indexes back to their recent lows.
ETF
Among growth ETFs, the Innovator IBD 50 ETF (50 …) rose 2.2% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 2.8%, with ServiceNow, Palantir and Samsara joining the ranks. The VanEck Vectors Semiconductor ETF (SMH) rose 2.9%. Nvidia was No. 1 on the SMH list, while Taiwan Semiconductor stock was No. 2.
SPDR S&P Metals & Mining ETF (XME) fell 0.8% last week. The Global X U.S. Infrastructure Development ETF (Pavé) fell 0.1%. The SPDR S&P Homebuilders ETF (translation) fell 2.9%.XL) rose 1.1%, while the Health Care Select Sector SPDR Fund (Chapter 45) fell 0.6%, with Lilly shares the leading component.
Industrial Select Sector SPDR Fund (Article 41) rose 1.25%.
Financial Select SPDR ETF (XLF) rose 0.8%.
Reflecting more speculative story stocks, the ARK Innovation ETF (arc) rose 0.6% last week, while the ARK Genomics ETF (arc) fell 1.4%. Tesla shares remain a big holding at Ark Invest. TSLA shares fell 3.7% last week to 200, dropping below its 200-day line and essentially erasing a big recent gain. The stock has recovered quite a bit from the lows.
Timing the Market with IBD’s ETF Market Strategy
AI Stocks to Watch
Palantir shares surged 21.3% last week to a three-year high. The stock rebounded sharply from a brief dip to its 200-day mark on Monday. Palantir’s strong earnings, guidance and new partnerships Microsoft (MSFT) was a positive catalyst. PLTR stock is stretched from its 50-day line and a previous buy point of 27.50, but it’s worth keeping an eye on.
Meta shares rose 6.1% to 517.77, decisively reclaiming their 50-day line. Investors can use the previous buy point of 514.01 or the high of 527.17, which was reached after the stock released earnings on Aug. 1, as an entry. Meta shares need one more week to hit a new base.
ServiceNow shares have risen 2.65% this week to 811.59 after testing its 50-day line on Monday. The stock broke a buy point of 806.52 and an alternate entry of 815.32 after the company released earnings on July 25, but quickly fell with the market. The stock reclaimed the buy point on Friday.
Samsara shares rose 8% this week to $38.24. On Monday, the stock briefly dipped below its 50-day and 200-day lines but closed slightly higher. A buy point for IOT shares is $39.21. Internet of Things is volatile and tends to move wildly after earnings are released. However, second-quarter earnings aren’t expected until early September.
Arista shares have rebounded from Monday’s intraday selloff to rise 5.2% this week to 335.87. The stock is above its 50-day moving average, and it may be the only AI hardware stock to hold above that key level. ANET shares have an even messier chart than Meta, but they could hit a new low in the next week.
Taiwan Semiconductor shares slumped to their 40-week line on Monday morning but ultimately rose 11.55% to 167.17, nearly clawing back to their 50-day line. Taiwan Semiconductor said on Friday that its July sales rose about 45% year over year, driven by AI chips such as Nvidia.
Microsoft, Nvidia are missing. Meet Wall Street’s new big “daddy.”
Nvidia stock
But can AI stocks thrive when the 800-pound gorilla, Nvidia, is struggling?
Nvidia shares have rebounded strongly from Monday’s lows, rising above the previous benchmark of $100. The stock still fell 2.35% on the week to $104.75, hitting resistance at the 10-day line. This marks the fourth consecutive week of declines for Nvidia shares.
Concerns about AI spending fatigue remain, while reports of production delays for Nvidia’s next-generation AI chip, Blackwell, have weighed heavily on NVDA.
What to do now
Investors could have benefited from early movers and experimented with buying later in the week, but keep in mind that many of today’s hottest names would likely struggle if the market weakens.
Investors should still hold most in cash and wait for the FTD, whether that’s on Monday or next year. As the market and positions pull you in, you can gradually increase your exposure. If you add 10% a day, it won’t be long before you’re almost fully invested.
For now, focus on your watchlist: Have a broad list of stocks showing promising moves, while focusing on a smaller list of top potential targets.
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