Dow Jones futures will begin trading Sunday evening, along with S&P 500 futures and Nasdaq futures. apple (AAPL) will unveil the iPhone 16 and take center stage at a major AI event, Oracle (Orks) and Adobe (Adobe). All three of these tech giants are nearing buy points.
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Selling pressure intensifies as stock prices plummet; focus on Palantir, CubeSmart, and ResMed
The stock market rally is sending out very bearish signals after its first weekly decline in over a year. The S&P 500 has fallen from its all-time high to levels clearly below its 50-day line. The Nasdaq has plummeted to below its August 13 follow-through day low.
Investors are worried the economy is stagnating and the Federal Reserve is lagging behind, while artificial intelligence stocks are selling off. NVIDIA (NVDA), intensified.
While many stocks that were holding up or showing strength last week have plummeted, some are holding up.
Tesla (TSLA) started strong on Thursday and bucked the trend, but came back full force on Friday and fell even further.
Investors should refrain from investing in AI and technology stocks and avoid them where possible.
Nvidia's stock price IBD LeaderboardHowever, the position is hedged.
Palantir and Dell finally join the S&P 500. Their stock prices are soaring.
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
The stock market's gains fell sharply during a holiday-shortened week.
The Dow Jones Industrial Average fell 2.9% on the stock market last week, while the S&P 500 fell 4.25%, its worst weekly drop since March 2023. The Nasdaq Composite plunged 5.8%, its first weekly drop since January 2022. The Russell 2000 index of small-cap stocks slid 5.7%.
The S&P 500, which entered a strong trend on August 30 and was on track to reach a new all-time high last week, has fallen decisively below its 50-day moving average. The Russell 2000 has also fallen below this important level.
The Dow Jones Industrial Average has fallen from its all-time high to just above its 50-day high.
The Nasdaq has led the selling, dropping below its 50-day line on Tuesday and beginning to approach its 200-day line. On Friday, the tech-heavy index dipped below its Aug. 13 follow-through low.
Closing below the FTD low is a strong bearish sign for the market rally. The S&P 500 has yet to close below the August 13 FTD low, but it is getting close.
Invesco S&P 500 Equal Weight ETF (RSP) fell 3.1%, falling below its 21-day line and testing its 10-week line.
U.S. crude oil futures fell 8% last week to $67.67 a barrel, the lowest since June 2023. Gasoline futures fell 9.4% to their lowest in three years.
The 10-year Treasury yield fell 20 basis points to 3.71%. The yield was at 3.65% on Friday morning, below the low hit during the global offering on Aug. 5. The 2-year Treasury yield fell 27.5 points to 3.65% as the yield curve finally stopped inverting.
Despite a string of weak economic data led by Friday's jobs report, the chances of the Fed cutting interest rates by a quarter-point on Sept. 18 are now about 30%, after briefly exceeding 50% early Friday. Fed Governor Christopher Waller, a more hawkish central banker, supports a September rate cut but has signaled he would prefer a smaller cut for now. Expectations for a quarter-point cut have raised concerns that the Fed is slow to act.
Investors are expecting a rate cut of 100 to 125 basis points by the end of the year.
The release of CPI and PPI inflation reports this week could give policymakers some room to take bolder action this month.
Timing the Market with IBD's ETF Market Strategy
ETF
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 4%, with Adobe and Oracle among the major members.
VanEck Vectors Semiconductor ETF (SMH) fell 11.7%. Nvidia shares, SMH's main holding, fell 13.9% this week to 102.83 after dropping 7.7% last week. The 100 level is a key area for NVDA and, by extension, the chip and AI sectors.
SPDR S&P Metals & Mining ETF (XME) plunged 9.8% last week.translation) fell 4.4%.XL) fell 5.8%, while the Health Care Select Sector SPDR Fund (Chapter 45) fell 2.1%.
Industrial Select Sector SPDR Fund (Article 41) fell 4.2%. The Financial Select SPDR ETF (XLF) fell 3.2%.
Reflecting more speculative story stocks, the ARK Innovation ETF (arc) fell 7.2% last week, while the ARK Genomics ETF (arc) fell 8.15%. Tesla is a major component of the Ark Invest ETF, which also has a key holding in Nvidia.
Apple to unveil iPhone 16
Apple will unveil the iPhone 16 smartphone at its product launch event on Monday, the first iPhone to feature AI technology that the Dow tech giant has dubbed “Apple Intelligence.” The AI-enhanced device is expected to spark a wave of iPhone upgrades.
Apple is also expected to show off its updated Apple Watch smartwatch and new AirPods wireless earphones.
Apple shares fell 3.6% last week to 220.82, dropping below their 50-day moving average. AAPL shares formed a V-shaped cup-with-handle base with a buy point of 232.92. This is a base-on-base formation on a previous cup base.
The Apple iPhone event and AAPL stock's reaction will be key not only for the iPhone chipmaker but for AI-related matters in general.
Upcoming: Apple to unveil iPhone 16, Adobe and Oracle to report earnings
Oracle, Adobe Revenues
Oracle is scheduled to report earnings on Monday evening, and the database software giant is likely to discuss its AI successes on its earnings conference call or at a conference later this week.
ORCL shares rose 0.4% to 141.81, but stayed above a key moving average, with Oracle targeting a consolidation buy point at 146.59.
Adobe's earnings report is due to take place on Thursday night, with attention focused on the software maker's AI-generated services.
ADBE shares attempted to break out of the 580.55 cup-with-handle base on Tuesday but then turned lower, with shares down 1.9% for the week to 563.41 but still managed to stay above the 21-day line.
Oracle and Adobe's earnings will offer clues about software makers' ability to generate revenue from their costly AI investments.
Tesla stock round trip
Tesla shares surged on Wednesday and especially on Thursday, buoyed by strong sales in China and the EV giant's plans to roll out FSD. On Thursday, the stock price surpassed its 50-day line and hit a short-term high of 238.22. This presented an opportunity for aggressive entry into TSLA shares, but a weak market increased the risk.
Tesla shares plunged 8.45% on Friday, dropping below their 50-day line again. The stock was down 1.6% for the week, at 210.73.
A buy point for Tesla shares is the 271 cup base. Market Surge.
What to do now
The stock market rally appears to be fading, and while some sectors are holding up better than others, most are still trending lower.
Investors should keep their exposure low or moderate. If investors have conviction in technology stocks, they should largely exit technology stocks unless they see big long-term gains.
Don't get excited about a strong open or one strong session. The market may “should bounce back” after a heavy sell-off, but it doesn't have to bounce back immediately, and the bounce doesn't have to last.
Look for stocks that are holding significant levels and showing relative strength. These will primarily be stocks in defensive and defensive growth sectors, along with some traditional growth names.
The number of major stocks that remain relatively healthy is a positive sign. But just because a stock has performed well in the past doesn't mean it will continue to do so in the future. Tesla's wild price fluctuations are a clear example of this. Service Now (now), Meta Platform (Meta), DoorDash (dash) and Netflix (NFLX) also began breaking out of a key level on Friday.
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