Dow Jones futures will open Sunday evening, along with S&P 500 and Nasdaq futures.
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The stock market rally briefly hinted it might be ready to take a breather, as mega-caps Metaplatforms (META), parent Google Alphabet (GOOGLE) And Nvidia (NVDA) hesitated somewhat. But there was broad-based progress through Friday’s close, amid growing hopes the Fed will cut rates.
The Dow hit a 52-week high, with the S&P 500 setting a 2023 closing high and the Nasdaq not far behind. The Russell 2000 finally broke out above a key level as several other breadth indicators flashed green.
This suggests that the market rally is turning into a broader advance. This gives hope that the uptrend can continue, even if some weary tech titans take a breather. Investors may choose to increase their exposure, perhaps taking the opportunity to diversify beyond AI-focused games, even as many technologies continue to do well.
Arm holds (ARM), United Rentals (URI), Dr. Horton (DHI), TopBuild (BLD), InterContinental Hotels (IHG), Marriott Worldwide (MAR) And Palantir Technologies (PLTR) are all flashing buy signals.
DHI, Nvidia and Meta shares are on the market MII classification. ARM stock is on the Leaderboard Watch List. Nvidia and Meta Stocks Are Rising MII 50. The URI stock is on the IBD large cap 20. United Rentals was Friday IBD Stock of the Day.
The video embedded in the article takes an in-depth look at market developments and analyzes Arm Holdings, United Rentals and DR Horton.
Friday evening, the S&P Dow Jones Indices announced that Uber Technologies (UBER) will join the S&P 500 index on December 18 as part of a quarterly rebalancing. Uber stock jumped.
Dow Jones Futures Today
Dow Jones futures open Sunday at 6 p.m. ET, along with S&P 500 and Nasdaq 100 futures.
Remember that overnight action Dow Jones Futures and elsewhere does not necessarily translate into real exchanges during the next regular class sotck exchange session.
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Stock market rally
The stock market rally saw a fifth consecutive weekly gain on the major indexes. Some mega-caps muted the Nasdaq’s gains, but the overall magnitude was strong.
The Dow Jones Industrial Average jumped 2.4% last week. stock market trading, reaching its best levels since January 2022. The S&P 500 index advanced 0.8%. The Nasdaq Composite Index rose 0.4%.
The Nasdaq overcame a 3.5% decline in Google stock and a 4% decline in Meta Platforms stock. NVDA stock fell 2.1%. Meta and Nvidia have fallen below buy points, but are not far from resuming them.
The small-cap Russell 2000 index jumped 3.05% for the week, almost all of it on Friday, to decisively breach the 200-day moving average after hitting resistance several times.
The Invesco S&P 500 Equal Weight ETF (RRSP) rose 2.45% to a three-month high, easily outpacing the S&P 500.
The First Trust Nasdaq 100 Equal-Weighted Index ETF (QQEW) gained 1.6%, approaching its July highs. That beat the Nasdaq 100, which edged up 0.1%.
Many software stocks soared on earnings last week. Chips moved sideways as Nvidia shares retreated.
Industrial, infrastructure, construction, mining, financial and travel sectors are rushing to the right side of consolidations.
Tech titans taking a break while small caps and various sectors gain momentum is a good sign.
There are many reasons to be optimistic. This is currently one of the only warning signs of the uptrend. Market sentiment is close to overly optimistic, while various metrics indicate the market is somewhat overbought. This suggests somewhat high downside risks. But perhaps mega-caps could bear much of the burden of such a decline.
Treasury yields are clearly a tailwind to the stock market recovery. The 10-year Treasury yield fell 26 basis points for the week to 4.225%, hitting a three-month low. The two-year bond yield, more closely tied to Fed policy, plunged 39 basis points to 4.565%. The yield curve is becoming less and less inverted.
As Fed Chief Jerome Powell said Friday it was “premature” to discuss rate cuts, investors are taking cues from other Fed officials and weak data. Markets are now leaning towards a Fed rate cut starting in March.
U.S. crude oil futures fell 1.95% to $74.07 a barrel last week, sliding 2.5% on Friday.
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Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) jumped 4.4%, with PLTR stock held in IGV. The VanEck Vectors Semiconductor ETF (SMH) rose slightly by 0.4%, with Nvidia stock being the top holding.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) jumped 7.9% last week and the ARK Genomics ETF (ARKG) gained 3.7%. Ark Invest ETFs own Palantir stock.
SPDR S&P Metals & Mining ETF (XME) jumped 5.5% last week.
The Select Industrial Sector SPDR Fund (XLII) climbed 2.3%, with URI stock being a component. The Global X US Infrastructure Development ETF (PAVE) rose 2.4%, with BLD stock in PAVE. SPDR S&P Homebuilders ETF (XHB) rose 3.5%, with DHI stock a major holding and TopBuild also in the ETF.
US Global Jets ETF (JETS) increased by 3%. The Energy Select SPDR ETF (XLE) rose slightly by 0.1% and the SPDR Health Care Select Sector Fund (XLIV) increased by 0.5%.
The Financial Select SPDR ETF (XLF) rose 2.2% and the SPDR S&P Regional Banking ETF (KRE) jumped 6.9%.
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Actions in buying zones
ARM stock rose 3.9% to 63.90 on Friday, breaking a cup-with-handle downtrend. Basis of IPO. The official buy point is 64.92. ARM went public at 51 per share in September, reaching a record high of 69 on September 15, the second day of trading. But ARM stock set a record close Friday.
URI stock jumped 5.4% Friday to 501.83, clearing its cup-with-handle buy point. THE line of relative force is not at a 52-week high, but at a consolidation high.
DHI stock gained 2.5% Friday to 130.86, narrowly topping 130.79. cup with handle point of purchase. Shares broke a downtrend, making the homebuilding giant actionable.
BLD stock rose 3.1% to 304.84, breaking through a 300 buy point from a cup-with-handle base, according to MarketSmith Analysis. The handle was tiny and didn’t allow for much shaking for the insulation installation game.
IHG stock jumped 3.5% to 81.31, breaking through a cup-with-handle buy point of 79.20. The breakout volume was pretty light.
MAR stock advanced 3.25% to 209.28, breaking a downtrend in seconds. The official buy point is 210.74 for Marriott stock.
PLTR stock added 1.1% to 20.27 on Friday, capping a weekly gain of 5.6%. Shares reclaimed a 20.24 buy point, still holding. Investors could have started a position on Tuesday, as Palantir stock rebounded from the 21-day line. Stocks are still extended from the 50-day line, which is working to catch up.
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What to do now
The stock market rally continues to show strength and has widened significantly in recent days.
Investors could choose to add some exposure, perhaps taking advantage of buying opportunities outside of the AI-focused technology sector. Portfolio rebalancing could also involve taking profits on some tired tech giants.
The broadening of the rally is why you want to cast a wide net, so you can spot industrial, financial and other emerging sectors that are making progress. So fire up your screens and update your watchlists.
Read The big picture every day to stay in tune with the direction of the market and the main values and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarsonDiscussions about @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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