Dow Jones futures will open Sunday evening, along with S&P 500 and Nasdaq futures. Nvidia (NVDA) profits weigh heavily on the stock market rally and many artificial intelligence games. OpenAI’s ouster of Sam Altman poses further questions for Microsoft and other AI stocks.
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These include Microsoft (MSFT), parent Google Alphabet (GOOGLE), Metaplatforms (META), Palantir Technologies (PLTR) And Super microcomputer (SMCI).
The stock market rally had another strong week, supported by contained inflation and falling Treasury yields. The main indices took a break at the end of the week, but did not want to fall. A pause or withdrawal could be constructive, allowing some leaders to forge handles or other entries.
The Nasdaq is about to enter a “power trend“, perhaps as early as Monday. Power trends are the time to be aggressive, but still disciplined.
Nvidia, Microsoft, Meta and Google stock are all in buy zones and these stock will run Dow Jones Futures, with PLTR and Super Micro stock around entries. Clearly, Nvidia’s earnings could be a significant positive or negative catalyst.
Microsoft, Nvidia and Meta Platforms shares are activated MII classification. META stock is activated Swing Trader. MSFT stock is on the Long-term leaders in IBD list. Nvidia, Microsoft and Super Micro stocks are on the market MII 50. Microsoft, Meta Platforms and SMCI shares are on the stock market IBD large cap 20.
The video embedded in this article covers weekly market action and analyzes NVDA stocks, Novo Nordisk (NVO) And MongoDB (BMD).
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 stock exchange session.
Join IBD experts as they analyze top stocks and the market on IBD Live
Stock market rally
The stock market rally accelerated following Tuesday’s subdued inflation report, then slightly extended gains the rest of the week.
The Dow Jones Industrial Average gained 1.9% last week stock market trading. The S&P 500 index jumped 2.2%. The Nasdaq Composite Index jumped 2.4%.
The small-cap Russell 2000 index jumped 5.4%, despite being rejected from the 200-day line. The Invesco S&P 500 Equal Weight ETF (RRSP) rose 3.4% to retake its 200 days.
The First Trust Nasdaq 100 Equal-Weighted Index ETF (QQEW), which is a good indicator of growth stock leadership, jumped 2.9%, surpassing its October highs.
The Nasdaq 100 settled just below July’s 52-week high.
The Nasdaq Composite Index and S&P 500 are trading right around their September 1 short-term highs, with July’s 52-week highs the next hurdle.
The market is taking a bit of a pause, but it’s certainly not a pullback. The S&P 500 and Nasdaq are on a four-day winning streak. Since their lowest level at the end of October, these indices have only experienced two sessions of decline.
The main values are performing well and growing. Among the leaders are chips, software, as well as some e-commerce, retail, financial, travel, and industrial/aerospace sectors.
The 10-year Treasury yield fell nearly 19 basis points to 4.44%, hitting its lowest level in two months.
U.S. crude oil futures fell 1.7% to $75.89 a barrel last week. During the week, crude hit its lowest level since July, but fell 4.1% following reports that OPEC+ could further cut production.
Power trend
Not all stock rallies are the same. Some are choppy and short-lived, while others demonstrate real power. A tendency to power marks the latter.
The evolution of power includes several criteria, some of which are already met.
The Nasdaq has traded above the low of the 21-day exponential moving average for at least 10 consecutive sessions. The 50-day moving average is trending higher.
What’s left?
The 21-day EMA line must close above the 50-day line for five consecutive sessions. Monday will mark the fifth day.
If Monday is a positive session for the Nasdaq, the power trend will begin. Otherwise, the power trend will start the next day.
Power trends are a time to be more aggressive, including being more open to aggressive growth names and being willing to hold stocks longer.
Market rebounds in power trends often result in big gains, but sometimes power trends fizzle out quickly. So continue to follow market actions.
AND Dow Jones Futures
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) jumped 2.65% to a 52-week high. MSFT stock is a major component and PLTR stock is also a large holding. The VanEck Vectors Semiconductor ETF (SMH) jumped 3.4% to a record high. Nvidia stock is SMH’s largest holding.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) rose 10% last week and the ARK Genomics ETF (ARKG) soared by 14.4%.
SPDR S&P Metals & Mining ETF (XME) rose 6.5% last week. The Global X US Infrastructure Development ETF (PAVE) increased by 3.6%. SPDR S&P Homebuilders ETF (XHB) increased by 6.3%. The Energy Select SPDR ETF (XLE) advanced 1.5% and the SPDR Health Care Select Sector Fund (XLIV) 1.6%. The Select Industrial Sector SPDR Fund (XLII) gained 3%, breaking a downtrend.
The Financial Select SPDR ETF (XLF) jumped 3.2% and the SPDR S&P Regional Banking ETF (KRE) climbed 9.3%.
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Nvidia Earnings
Nvidia’s results are expected Tuesday evening. Wall Street expects third-quarter profits to skyrocket 481% and revenue to rise 173% to $16.19 billion. But after two massive beat-and-raise reports, investors might be looking for much more than that.
Analysts will also be looking for comments on the impact of tightened Chinese export controls.
Nvidia stock rose 2% last week to 492.98, moving into a buy zone from a double bottom base. The official buy point is 476.09. Like the broader market and many executives, NVDA stock largely took a breather after Tuesday.
AI Actions
Microsoft shares settled for a gain of 17 cents at 369.84, falling 1.7% Friday from Thursday’s record. Stocks hold range at 366.78 cup base point of purchase. A longer break would allow the moving averages to catch up.
On Tuesday, Microsoft announced an in-house AI chip to ease its reliance on Nvidia and others.
Shortly before Friday’s close, backed by Microsoft OpenAI announced the departure of CEO Sam Altman because the “board of directors no longer has confidence” in his leadership. On Friday evening, Greg Brockman, president and co-founder of OpenAI, said he was resigning due to “today’s news.”
Most of Friday’s losses came from the OpenAI news, with MSFT stock also down 1% in after-hours trading.
Google stock rose just over 2% to 135.31 last week, moving back above the 50-day line, despite Friday’s 1.2% decline. Investors could use Thursday’s high of 137.22 as an early entry into a flat base. The official buy point is 141.22.
The Information reported Thursday evening that Google was delaying the launch of Gemini, a potential rival to OpenAI’s ChatGPT 4, until early 2024.
Meta stock rose 1.9% to 335.04, trading in the shopping area of a consolidation dating back to the end of July.
PLTR stock rose 4.2% to 20.49, breaking through a 20.24 cup buy point, according to MarketSmith Analysis. At 23% above its 50-day line, a break around these levels would be healthy. But Palantir’s stock has shown little inclination to do so.
SMCI stock jumped 8.5% for the week to 288.59, largely thanks to Tuesday’s 14.9% rise. It has a buy point of 317.50 from a less than ideal double-bottom buy point. Super Micro stock is stalling around some key levels and a descending trendline. A move above Wednesday’s high of 297.48 could offer early entry.
These are just a few of the many AI-related games, many of which could hinge on Nvidia’s earnings and forecasts.
Market Rally Analysis
The stock market rally continues to go very well, as evidenced by the upcoming energy trend. Investors can continue to increase their exposure, although they may decide to wait for new configurations as well as profits from Nvidia.
Many important findings reports will be released next week. Tuesday, the same day as Nvidia reports, Abercrombie & Fitch (ANF), American Eagle Outfitters (AEO), Urban outfitters (URBAN) and that of China Miniso (MNSO) are at your disposal.
Keep working on watchlists. You want to be ready if the market rally accelerates again. On the other hand, have a plan of action if the market or specific stocks experience a significant downturn.
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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