Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Micron Technology (MU) earnings and the Fed’s favorite inflation gauge headline the coming week.
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What To Expect After A Downside Reversal; Nvidia, Alphabet And Spotify In Focus
The stock market rally saw weekly gains, with the S&P 500 and Nasdaq composite setting fresh all-time highs as recently as Thursday morning. But there was some weakness late in the week.
Nvidia (NVDA) and other artificial intelligence chip plays like Broadcom (AVGO), Taiwan Semiconductor (TSM), Arm Holdings (ARM) and Micron stock reversed lower from record highs after big moves in recent weeks. Nvidia stock in particular was flirting with extremely extended levels.
Micron earnings late next Wednesday could be key for whether this AI chip play finds support or suffers a more-serious retreat.
Carnival (CCL), FedEx (FDX) and Dow Jones component Nike (NKE) also report this coming week. All three stocks have been laggards but will offer readings on the economy and consumer spending.
Amazon.com (AMZN), Meta Platforms (META), Nu Holdings (NU) are stocks setting up.
Nvidia and Taiwan Semiconductor stock are on IBD Leaderboard. Meta Platforms, Nu Holdings and Amazon stock are on SwingTrader. Nvidia stock and Arm Holdings are on the IBD 50. Broadcom stock and Nvidia are on the IBD Big Cap 20.
Fed’s Inflation Gauge
The Commerce Department will release the Fed’s favorite inflation gauge, the core PCE price index, on Friday morning. Economists are expecting a relatively tame May reading. Markets now see roughly 65% odds of a Fed rate cut in September and two cuts in 2024.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally saw slim-to-solid gains on the key indexes this past week, despite turbulence late in the week from AI chip plays.
The Dow Jones Industrial Average led the indexes with a 1.45% advance in last week’s stock market trading, moving above the 50-day line to a one-month high. The S&P 500 index gained 0.6%. The Nasdaq composite rose less than one point.
The small-cap Russell 2000 climbed 0.8%, but is still stuck below the 50-day.
The Invesco S&P 500 Equal Weight ETF (RSP) rose 1.1%, back above the 50-day line. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) advanced 1%, just below record highs.
Leading stocks had a mixed week, with gains mostly on Monday and some suffering heavy losses over Thursday-Friday.
Still, the Nasdaq and S&P 500 are just below all-time highs. It’s hard to see many problems on weekly charts.
The Nasdaq is now 6.7% above its 50-day line. That’s still extended but down from 8.3% on Monday. The Nasdaq pausing or falling slightly over a couple weeks as Nvidia and AI stocks take a breather would be positive.
Even better would be if small caps and some other areas of the market powered above key levels.
The 10-year Treasury yield rose four basis points to 4.26%.
U.S. crude oil futures popped 3.4% to $80.73 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.1% last week. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 2%. The VanEck Vectors Semiconductor ETF (SMH) sank 1.1%. Nvidia is the No. 1 holding in SMH, but Taiwan Semiconductor, Micron and Broadcom are key members.
SPDR S&P Metals & Mining ETF (XME) rose 1.5% last week. The Global X U.S. Infrastructure Development ETF (PAVE) advanced 0.9%. U.S. Global Jets ETF (JETS) ascended 1.5%. SPDR S&P Homebuilders ETF (XHB) fell 1%. The Energy Select SPDR ETF (XLE) bounced 1.9% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.6%. The Industrial Select Sector SPDR Fund (XLI) bounced 1.5%. The Financial Select SPDR ETF (XLF) climbed 1.7%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 1.2% last week and ARK Genomics ETF (ARKG) slid 2.8%.
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Nvidia Stock
Nvidia stock fell 5% for the week to 126.57. Shares reversed lower from a record 140.76 intraday peak Thursday. The AI chip leader is now 25.3% above its 50-day line. That’s after briefly topping 40% at Thursday’s peak.
Back on March 7, NVDA stock closed 41.9% above the 50-day line, the most in 21 years. The next day, Nvidia stock staged a sharp reversal that marked the start of a consolidation.
Micron Earnings
Micron reports fiscal Q3 results on Wednesday. It’s expected to report a profit of 42 cents a share, the first positive…
Read More: Nvidia Skid Raises Questions, 3 Stocks Near Buy Points; Fed Inflation Gauge