Dow Jones Futures: Market Rebounds As Nvidia Forges Base; Elon Musk Sets Tesla

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Nvidia and several AI chip plays are working on bases.

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The stock market pulled back last week, highlighted by Thursday’s downside reversal that pushed the uptrend to “under pressure.” But the major indexes rebounded Friday. A few leaders flashed buy signals, but with head fakes continuing as well. Many are near early entries or working on new consolidations.

Investors should be watching closely and could consider some incremental buys. However, it’s still a rangebound market.

Nvidia (NVDA) fell last week but is close to forging a new base. Broadcom (AVGO), Taiwan Semiconductor (TSM) and recent IPO Astera Labs (ALAB) also are working on potential bases, while ARM Holdings (ARM) already has one. Super Micro Computer (SMCI), closely tied to AI chips, also is forging a base.

Tesla (TSLA) retreated amid weak first-quarter deliveries and other negative headlines. But shares jumped Friday night as Elon Musk said Tesla would unveil a robotaxi on Aug. 8.

Nvidia and ARM stock are on IBD Leaderboard. Nvidia stock and Arm Holdings are on the IBD 50. Nvidia, Broadcom and Super Micro stock are on the IBD Big Cap 20.

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 had modest-to-solid weekly losses, but ended on a high note Friday.

The Dow Jones Industrial Average slumped 2.3% in last week’s stock market trading, but reclaimed the 50-day line on Friday. The S&P 500 index fell 0.95% and the Nasdaq composite declined 0.8%, but both ended back above their 21-day lines. The small-cap Russell 2000 tumbled 2.9%, unable to close above its 21-day on Friday.

On Thursday, stocks suffered a sharp downside reversal on Mideast tensions. But they rebounded Friday, even in the face of a strong jobs report, perhaps as Mideast fears ebbed.

The Dow, which undercut its 50-day line Thursday, rebounded Friday. The S&P 500, Nasdaq and Russell 2000 regained their 21-day moving averages. The Nasdaq and Russell 2000 bounced from their 10-week averages.

Still, Friday was an inside day for the major indexes, while volume fell vs. Thursday.

Despite some daily swings, the Nasdaq has been trading relatively tightly since early March, finding 10-week line support. The Russell 2000 is around the top of a consolidation from the tail end of 2023. That has let many leading stocks work on bases or pull back to key support. Several leaders tried to clear entries during the week, but many quickly pulled back.

The 10-year Treasury yield jumped 18.5 basis points to 4.38%, the highest close of 2024. The 10-year yield hit a 2024 intraday high of 4.43% on Wednesday morning. The odds of a June Fed rate cut have fallen to just 49%.

U.S. crude oil futures jumped 4.5% to $86.91 a barrel for the week, hitting their best levels since October.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 1.3% for the week. The VanEck Vectors Semiconductor ETF (SMH) declined 1%. Nvidia is a massive SMH holding, with Broadcom and Taiwan Semiconductor also key holdings.

SPDR S&P Metals & Mining ETF (XME) jumped 2.9% last week. The Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.2%. U.S. Global Jets ETF (JETS) descended 4.2%. SPDR S&P Homebuilders ETF (XHB) retreated 2.7%.

The Energy Select SPDR ETF (XLE) leapt 3.9% and the Health Care Select Sector SPDR Fund (XLV) fell just over 3%. The Industrial Select Sector SPDR Fund (XLI) slipped 0.2%. The Financial Select SPDR ETF (XLF) declined 1.3%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sold off 5.9% last week and ARK Genomics ETF (ARKG) plunged 7.1%. Tesla stock is a major holding across Ark Invest’s ETFs.

Time The Market With IBD’s ETF Market Strategy

Nvidia Stock

Nvidia stock fell 2.6% to 880.08, a second straight weekly decline after a huge 11-week run. Shares did rebound Friday to close pennies above their 21-day line. The AI chip leader is now four weeks into a possible flat base. The buy point would be 974, marking the high of NVDA stock’s big reversal day on March 8. Another week could let the fast-rising 10-week line close the gap significantly.

Thursday’s high of 906.34 would offer an early entry from a very short trendline.

A new base would let investors join or add to the clear leader of the AI stock market rally. An Nvidia breakout would have a big impact on the broader market, especially other AI chip stocks.

Mike Webster On Staying In SMCI Stock

AI Chip Stocks

Broadcom stock rose 1.1% to 1,339.43 last week, holding the 21-day and rebounding from the 10-week line again. On Thursday, AVGO stock briefly…