Dow Jones Futures: Five Stocks In Buy Areas As Market Rally Powers Higher

Dow Jones futures edged lower Sunday night, along with S&P 500 futures and Nasdaq futures.

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The stock market rally largely weathered a huge week of earnings and economic news. The Dow Jones and S&P 500 hit fresh all-time highs Friday while the Nasdaq rebounded to a two-year high thanks to Meta Platforms (META) and Amazon.com (AMZN).

Big Tech earnings for the week were mixed but generally positive, buoying the sector.

Market breadth was weak, with small caps struggling. Tesla (TSLA) broke a weekly losing streak, but is leading S&P 500 losers in 2024.

It’s a stock picker’s market, for sure. But despite the weak breadth there have been plenty of stocks to choose from.

Adobe (ADBE), Axon Enterprise (AXON), MongoDB (MDB), Samsara (IOT) and Synopsys (SNPS) flashed buy signals Friday.

SNPS stock is on IBD Long-Term Leaders. Synopsys, Samsara and MDB stock are in the IBD 50. Synopsys and Axon stock are on the IBD Big Cap 20. Axon was Friday’s IBD Stock Of The Day.

The video embedded in this article discussed the market action in depth and analyzed MongoDB, Axon and SNPS stock.

Earnings will remain heavy in the coming week, with Caterpillar (CAT), Chipotle Mexican Grill (CMG), Eli Lilly (LLY), ELF Beauty (ELF), Arm Holdings (ARM) and Pinterest (PINS) among the many notable companies reporting.

Dow Jones Futures Today

Dow Jones futures were 0.1% below fair value. S&P 500 futures and Nasdaq 100 futures fell 0.2%.

The 10-year Treasury yield rose several basis points to 4.08%.

Fed chief Jerome Powell, in a “60 Minutes” interview aired Sunday night, reiterated his Wednesday comments that a March rate cut is not the “base case.” He added that the Fed is likely to cut rates by less than markets expect.

Crude oil futures rose slightly. Hamas reportedly will reject a long-term cease-fire deal with Israel.

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 struggled midweek, with Fed chief Jerome Powell largely ruling out a March rate cut, and Google-parent Alphabet (GOOGL) weighing on techs. But the major indexes then rallied strongly.

The Dow Jones Industrial Average and S&P 500 index rose 1.4% in last week’s stock market trading, both setting record highs. The Nasdaq composite climbed 1.1%, buoyed by over-1% gains on Thursday and Friday.

Meta Platforms (META) and Amazon.com (AMZN) were huge earnings winners while, ultimately, Microsoft (MSFT) rallied in its results. Those offset tough weeks for Google parent Alphabet (GOOGL) and Apple (AAPL).

Also, these megacap tech earnings, guidance and — crucially — capital spending plans were good news for peers, partners and suppliers, notably Nvidia (NVDA) but also stocks such as MongoDB.

Market breadth weakened however. Even as the major indexes rallied to highs, losers trounced winners on Friday.

The small-cap Russell 2000 declined 0.8% for the week, falling below the 21-day line but holding support at the 50-day.

The Invesco S&P 500 Equal Weight ETF (RSP) and First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) both rose 0.4%, significantly lagging the S&P 500 and Nasdaq 100. But RSP and QQEW are close to recent 52-week highs.

The Nasdaq closed Friday 5.4% above its 50-day moving average with the S&P 500 up 4.9%. The Nasdaq 100 is 6% above its 50-day. Those are starting to get extended again or nearly so.

The 10-year Treasury yield sank 13 basis points to 4.03%, despite Friday’s 17 basis-point jump following the hot jobs report. Regional bank fears weighed on long-term Treasury yields. But the two-year Treasury yield, more closely tied to Fed policy, was little changed.

While Fed’s Powell seemed to close the door on a March rate cut, he stressed that labor markets don’t need to weaken before rate cuts occur. So that’s one reason why Friday’s stunning strong jobs report did not snuff out the Meta/Amazon-led rally.

U.S. crude oil futures plunged 7.35% to $72.28 a barrel last week amid demand concerns and hopes for an Israel-Hamas cease-fire.

Amazon Partner Leads Three AI Stocks Near Buy Points

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 1.4%, hitting a two-year high Monday, with Adobe stock a big holding and Samsara also in the ETF. The VanEck Vectors Semiconductor ETF (SMH) advanced 1.6%. SNPS stock is in both IGV and SMH.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 1.6%, snapping a five-week losing streak. The ARK Genomics ETF (ARKG) edged up 0.2%. Tesla stock remains a major holding across Ark Invest’s ETFs.

The Global X U.S. Infrastructure Development ETF (PAVE) jumped 3.4% and the Industrial Select Sector SPDR Fund (XLI) rallied 1.9%, both to record highs. The Health Care Select Sector SPDR Fund (XLV) climbed nearly 2%, clearing a long consolidation.

SPDR S&P…