Dow Jones futures will open alongside S&P 500 futures and Nasdaq futures on Sunday night, after major indexes posted big weekly gains to new record highs.
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The stock market can be very simple. Two major factors have been driving the market rally since the end of October: expectations for a Fed rate cut and the ongoing artificial intelligence boom.
Last week, the Fed reaffirmed its outlook for three rate cuts in 2024. Nvidia (NVDA), broadcom (AVGO) and microsoft (MSFT) held an upbeat AI event; micron technology (MU) reported a windfall and strong guidance thanks to AI tailwinds.
Nvidia, Broadcom, and Micron stock prices rose significantly on a weekly basis, along with many other AI-related moves. Microsoft stock made a modest rally toward new highs, but it's still viable.
However, there was strength across a wide range of sectors, with many sectors enjoying strong gains as a diverse group of stocks, including financials, issued buy signals.
Uber Technologies (Uber), Eli Lilly (LLY), crowdstrike holdings (CRWD) is a major stock that is setting up amidst a messy consolidation.
Investors can look beyond augmented AI leaders, perhaps like Nvidia stock, and take advantage of some actionable stocks with incremental purchases.
Nvidia and Uber stocks are listed on the IBD Leaderboard. Microsoft stock is listed on the IBD Long-Term Leaders list. Nvidia and CrowdStrike stocks are included in the IBD 50. Broadcom stock, CrowdStrike and Nvidia are included in the IBD Big Cap 20 list. IBD's Stock of the Day on Friday was Uber.
Dow Jones futures today
Dow Jones futures will open at 6pm ET, along with S&P 500 futures and Nasdaq 100 futures.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
It was a strong week for stock market gains on the back of a dovish Fed and bullish AI outlook. The major indexes rose significantly, retreating from Thursday's intraday highs, but all hitting new record highs.
The Dow Jones Industrial Average rose 2% in last week's stock market trading. The S&P 500 index rose 2.3%. The Nasdaq Composite rose 2.85%.
The small-cap Russell 2000 rose 1.6%, hitting a 23-month closing high on Thursday, before falling back on Friday.
The Nasdaq decisively liquidated trades dating back to early February, and the Russell 2000 rose above its range from late December to the end of February. This means that many leading stocks have broken out or given other buy signals.
Meanwhile, the S&P 500 and Nasdaq haven't extended beyond their 50-day lines, but it won't take long for them to do so.
In addition to Nvidia, other big AI stocks such as Micron, Broadcom, and Microsoft pushed the major indexes slightly higher.
The 10-year U.S. Treasury yield fell 9 basis points to 4.22%, retreating after being close to a 2024 high on Monday.
U.S. crude oil futures rose 5 cents last week to $80.63 a barrel, down from 2024 highs.
ETF
Among growth ETFs, the iShares Expanded Technology Software Sector ETF (IGV) rose 2.9%, with Microsoft stock a big holding and CrowdStrike also included in IGV. The VanEck Vector Semiconductor ETF (SMH) rebounded 4.5%. Nvidia is his SMH's major shareholder, with Broadcom stock and Micron also major members.
The SPDR S&P Metals Mining ETF (XME) rose 2.5% last week. The Global XUS Infrastructure Development ETF (PAVE) soared 3.2%. The U.S. Global Jets ETF (JETS) rose 3.4%. The SPDR S&P Home Builders ETF (XHB) soared 4.8%. Energy Select SPDR ETF (XLE) rose 0.9%, nearing a 52-week high. Healthcare Select Sector SPDR Fund (XLV) rose slightly. Industrial Select Sector SPDR Fund (XLI) rose 2.6%.
The Financial Select SPDR ETF (XLF) rose 1.5% and the SPDR S&P Regional Banking ETF (KRE) rose 1.3%.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) rose 1.5% last week, while the ARK Genomics ETF (ARKG) fell just over 1%.
Timing the Market with IBD's ETF Market Strategy
Stocks near the purchase point
Uber stock has been consolidating in recent weeks, and investors can view it as effectively a flat base with a buy point of 82.14 points. The stock rose 5.5% to 80.23 this week, rebounding from its 10-week line. Investors could use Thursday's high of 81.23 as a slightly early entry.
Eli Lilly stock is also on a pseudo-flat basis, with a buy point of 800.78. LLY stock has recently found support at its 21-day moving average. The stock rose 2.1% to 770.30.
CrowdStrike stock rose 3.8% to 327.58 last week, rebounding from its 10-week line. Cybersecurity stocks are trading solidly near their 21-day line, but there are some notable exceptions.Stock prices plummeted on February 21st due to a rebound in large-cap stocks. palo alto networks (PANW) fell but quickly rebounded. On March 5, just before the company's financial results, the stock price again tested the 50-day line. Stock prices soared on March 6th following the financial results, but the rate of increase has narrowed. A break above the February 15th high of 338.45 could be an entry.
AI is no longer the buzzword for cybersecurity stocks
AI stocks
Nvidia stock soared 7.34% to 942.89, marking its 11th consecutive week of gains and hitting a new all-time high at Friday's close. Late Monday, the AI chip leader announced its latest AI processor. Blackwell chips are much faster, but the price is bullish. Additionally, multiple analysts have raised their NVDA stock price targets to over 1,000.
Broadcom stock rose 9.55% to 1,353.47, jumping from its 50-day and 10-week lines. There may have been a short-term opportunity to buy AVGO, but it has now been extended. Broadcom pushed back Wednesday with its own AI event.
Micron stock soared 18.2% to 110.21, hitting an all-time high. The memory chip giant reported a surprise profit and led gains on AI-related growth.
Microsoft stock rose 3% to 428.74, hitting a new all-time high. The Dow tech giant announced its Surface AI PC and showed off its Copilot capabilities at Thursday's “New Era Of Work” event. MSFT stock remains within the 420.83 buy point, extending from a not-quite-flat base. It is also within the 10-week line.
what to do now
The market rally came on the back of a strong week, with many stocks across a variety of sectors issuing buy signals and some big positive news.
Investors could have taken advantage of these opportunities, especially if they had recently reduced their exposure. However, now is not the time to actively increase exposure. Look beyond just a few AI names and make new purchases incrementally.
Don't buy extended stocks, even if they're hot artificial intelligence plays.
Be sure to work on your watchlist for viable stocks and configurations. You want to find the best possible names ahead of time so you're ready to pounce when those names trigger an entry.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
Follow Ed Carson's thread @edcarson1971 and X/Twitter. @IBD_ECarson.
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