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Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. Nvidia and many AI chip processors run on the rules.
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The stock market fell last week, highlighted by Thursday's bearish reversal that pushed the uptrend “under pressure.” But major indexes rebounded on Friday. A few leaders have issued buy signals, but the faking continues as well. Many of them are close to early entries or are working on new integrations.
Investors should watch closely and could consider some additional purchases. However, it is still a limited market.
Nvidia (NVDA) fell last week but is about to form a new base. Broadcom (Afgo), Taiwan Semiconductor Co., Ltd (TSM) and the recent IPO Astera Laboratories (the father) also work on probabilistic grounds, while Arm Holdings (arm) She already has one. Super micro computer (SMCI), which is closely linked to AI chips, is also forming a base.
Super Micro and Nvidia are the top performers on the S&P 500 in 2024.
Tesla (TSLA) decline amid weak first-quarter deliveries and other negative headlines. But shares jumped on Friday night after Elon Musk said Tesla would unveil a robotaxi on August 8.
Nvidia and ARM stock is on IBD Leaderboard. Nvidia and Arm Holdings shares are in the market Bahraini dinar 50. Nvidia, Broadcom, and Super Micro stocks are in the market IBD Big Cap 20.
Dow jones futures today
Dow Jones futures open at 6pm EST on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember, an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock market pool
The stock market rally saw modest to strong weekly losses, but ended at a high level on Friday.
The Dow Jones Industrial Average fell 2.3% in stock market trading last week, but reclaimed its 50-day line on Friday. The S&P 500 fell 0.95%, and the Nasdaq Composite fell 0.8%, but both finished back above the 21-day line. The small-cap Russell 2000 index fell 2.9%, unable to close above its 21-day level on Friday.
On Thursday, stocks suffered a sharp bearish reversal due to tensions in the Middle East. But they rebounded on Friday, even in the face of a strong jobs report, perhaps as fears in the Middle East eased.
The Dow, which broke its 50-day line on Thursday, rebounded on Friday. The S&P 500, Nasdaq and Russell 2000 indexes regained their 21-day moving averages. The Nasdaq and Russell 2000 rebounded from their 10-week averages.
However, Friday was an inside day for the major indices, while trading volume declined versus Thursday.
Despite some daily volatility, the Nasdaq has been trading relatively tight since early March, finding 10-week support. The Russell 2000 is around a consolidation top as of the end of 2023. This has allowed many leading stocks to work on bases or pull back to key support. Several leaders attempted to clear entries during the week, but many quickly backed out.
The 10-year Treasury yield jumped 18.5 basis points to 4.38%, the highest close of 2024. The 10-year Treasury yield reached an intraday high in 2024 at 4.43% on Wednesday morning. The odds of a Fed rate cut in June have fallen to just 53.2%.
US crude oil futures jumped 4.5% to $86.91 per barrel during the week, recording their best levels since October.
The odds of a Fed rate cut are on the cusp of a major shift
ETFs
Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) Declined 1.3% during the week. VanEck Vectors Semiconductor ETF (Trait) decreased by 1%. Nvidia is a huge holding of SMH, with Broadcom and Taiwan Semiconductor also major holdings.
SPDR S&P Metals and Mining Fund (XME) jumped 2.9% last week. Global X US Infrastructure Development Foundation (ETF)cradle) decreased by 0.2%. US Global Jets ETF (Planes) decreased by 4.2%. SPDR S&P Homebuilders ETF (XHB) decreased by 2.7%.
Energy Select SPDR ETF (XLE(Jumped 3.9% and the Healthcare Sector SPDR Fund)Forty-fifth) fell just over 3%. Selected Industrial Sector SPDR Fund (forty-first) decreased by 0.2%. Financial Select SPDR ETF (XLF) decreased by 1.3%.
Reflecting more speculative stocks, the ARK Innovation ETF (Ark) sold off 5.9% last week and the ARK Genomics ETF (Arkj) decreased by 7.1%. Tesla stock is a prime holding across Ark Invest's ETFs.
Time the market with IBD's ETF market strategy
Nvidia stock
Nvidia stock fell 2.6% to 880.08, its second straight weekly decline after 11 weeks. Shares rebounded on Friday to close pennies above the 21-day line. A leading AI chip company is now four weeks away from reaching a potentially flat base. The buy point would be 974, marking the high of the big reversal day for NVDA stock on March 8. Another week may allow the fast-rising 10-week line to close the gap significantly.
Thursday's high at 906.34 will provide an early entry from a very short trend line.
The new rule will allow investors to join or add to the clear leader of the AI stock market rally. Nvidia's hack will have a major impact on the broader market, especially other AI chip stocks.
Mike Webster talks about staying in SMCI stock
Artificial intelligence chip stocks
Broadcom stock rose 1.1% to 1,339.43 last week, holding a 21-day range and rebounding from the 10-week line again. On Thursday, AVGO stock briefly cleared a sloping trend line before reversing lower. Shares entered five weeks after reaching a potential base with a potential entry of 1,438.17. Investors can use Thursday's intraday high of 1403.98 as an early entry.
ARM stock fell 0.1% to 124.82 during the week, finding support at the 10-week level but hitting resistance at the 21-day level. Shares formed a base with a buy point of 164. But the downtrend line or the March 26 high of 145 could be a lower place to start a position.
Taiwan Semiconductor shares rose 1.2% to 141.37, finding 21-day support. The foundry giant that makes chips for Nvidia, apple (Camel) and many more, are just a few weeks away from establishing a potential base. Investors can use Thursday's high of 146.75 as an early entry.
Taiwan Semi reported March sales on April 10, with first-quarter earnings released on April 18. This could have a major impact on AI chip makers as well as chip equipment makers.
Astera Labs stock fell 3.8% to 71.34 last week, but rose on Friday. The AI networking chip maker began trading on March 20 and hit a record high of 95.21 on March 26. ALAB stock remained eight days away from the base of a potential IPO, which could be as short as two weeks or 10 days. A potential buy point would be 95.21, although investors may look for early entry points, as the 75 area represents a resistance area.
Super Micro shares a titular AI chip, and its servers are a favorite destination for chips from Nvidia and others. SMCI stock fell 6.1% to 948.02 last week, below its 21-day line. Super Micro stock is on a new footing, but a 10-week test of the line could come soon. Investors may use Thursday's high of 1,057.18 as an early entry.
SMCI stock is up 237% in 2024, making it the best performer in the S&P 500 so far. Nvidia is No. 2 at 73.5%.
Astera Labs is the star in AI networking chips
Tesla shares
Tesla stock fell 6.2% to 164.90 during the week, once again falling below its 10-week moving average. Shares briefly matched an 11-month low on Friday.
The electric vehicle giant on Tuesday reported first-quarter deliveries that were well below more bearish estimates. Meanwhile, Reuters reported on Friday that Tesla had canceled its plans to purchase a $25,000 electric car, shifting focus once again to a robotaxi without a steering wheel.
If true, this suggests that Elon Musk is pinning Tesla's future growth almost entirely on autonomous driving.
“Reuters is lying (again),” Musk wrote in his response on his social site X. But he did not specify what was inaccurate.
Late Friday, Musk said Tesla would unveil a robotaxi on August 8. He did not mention other details, such as whether fans will see a prototype or design or just an image.
Tesla's full self-driving is still a Level 2 system, meaning human drivers must be prepared to take the wheel.
But TSLA stock jumped 3.8% after the close.
What are you doing now
The stock market rally is taking a well-deserved break, with moving averages closing the gap. This could pave the way for another move higher, but there is no guarantee that this will happen soon or even at all.
Meanwhile, sideways action has been difficult, with many leading stocks flirting with buy points before quickly pulling back. Investors could have tried some buying, but they probably should have cut back on a lot of it.
With Treasury yields rising to 2024 highs and the market poised to push back on Fed rate cuts again, the market rally faces major potential headwinds.
Investors may want to wait for more compelling strength, such as the Nasdaq and S&P 500 clearing intraday highs Thursday and testing all-time levels, before adding exposure significantly.
Such a broad market move may be what Nvidia, ARM, and other AI chip leaders need to move forward as well.
Definitely work on your watchlists, and look for those emerging setups. While this article focuses on AI chip plays, a large number of software stocks are making entries, along with leading stocks from a variety of sectors.
Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.
Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.
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