Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Inflation data will be key in the coming week.
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The stock market rally had a solid week, with the key indexes moving toward record or 52-week highs.
Nvidia (NVDA) chipmaker Taiwan Semiconductor (TSM) broke out Friday on strong April sales, fueled by AI chip demand. Nvidia stock is close to carving a handle. Broadcom (AVGO), another Taiwan Semi client, is right at an aggressive entry.
Meanwhile, JPMorgan Chase (JPM) and construction aggregates giant Martin Marietta (MLM) cleared early entries.
On the flip side, Tesla (TSLA) tumbled back below key support as it round-tripped its April 29 gap-up.
Walmart (WMT) and Applied Materials (AMAT) are notable earnings reports this week, along with Asian e-commerce giants such as Sea (SE) and Alibaba (BABA).
Inflation Reports
But investor focus will be on the big inflation reports. The producer price index is due Tuesday, with the consumer price index on Wednesday. The PPI report is important because key components feed directly into the core PCE price index, the Fed’s favorite inflation gauge.
Inflation data has been sticky or even picking up in recent months, spurring the Fed to push back expectations for rate cuts. Friday’s University of Michigan consumer sentiment index showed inflation expectations picking up.
Nvidia, Martin Marietta and Taiwan Semiconductor stock are on IBD Leaderboard. Nvidia and JPMorgan stock are on SwingTrader and the IBD 50. Taiwan Semiconductor was Friday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET, 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 started the week strong, with the Dow Jones, S&P 500 and Russell 2000 reclaiming their 50-day moving averages on Monday. The Dow and S&P 500 kept moving toward record highs the rest of the week while the Nasdaq and Russell paused.
The Dow Jones Industrial Average jumped 2.2% in last week’s stock market trading, extending a win streak to eight trading sessions. The S&P 500 index popped 1.85%. The Nasdaq composite advanced 1.1%. The small-cap Russell 2000 climbed 1.2%
The market rally advance has been broad. Leading stocks hail from a variety of sectors.
The 10-year Treasury yield rose a fraction to 4.5% after hitting a one-month low of 4.42% intraday Tuesday.
U.S. crude oil futures rose 0.2% to $78.26 a barrel last week.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.7% in last week’s trading. The VanEck Vectors Semiconductor ETF (SMH) popped 2.6%. Nvidia and Taiwan Semiconductor are the two largest holdings in SMH, with AVGO stock and Applied Materials also key positions.
SPDR S&P Metals & Mining ETF (XME) advanced 1.25% last week. The Global X U.S. Infrastructure Development ETF (PAVE) jumped 2.85%, with Martin Marietta stock a major component. U.S. Global Jets ETF (JETS) ascended 0.8%. SPDR S&P Homebuilders ETF (XHB) stepped up 2.2%, with PulteGroup stock a significant holding. The Energy Select SPDR ETF (XLE) gained 1.3% and the Health Care Select Sector SPDR Fund (XLV) rallied nearly 2%. The Industrial Select Sector SPDR Fund (XLI) jumped 2.4%.
The Financial Select SPDR ETF (XLF) leapt 3.2%, with JPMorgan a key component.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) tumbled 5.6% last week and ARK Genomics ETF (ARKG) edged down 0.5%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
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Taiwan Semiconductor Stock Breaks Out
TSM stock jumped 4.5% on Friday to 149.26, clearing a 148.43 double-bottom buy point. Shares gained 5.4% for the week.
Before Friday’s open, Taiwan Semiconductor reported April revenue soared 59.6% vs. a year earlier in local currency. AI and other advanced chips are leading the way for Taiwan Semi.
Nvidia Stock
Nvidia stock rose 1.2% to 898.78 for the week, pausing after Monday’s 3.8% gain capped an 11% spike over three sessions. The AI chip leader has a 974 consolidation buy point, according to MarketSurge. NVDA stock is on track to have a handle after Monday. That would offer a lower buy point of 922.20.
Nvidia earnings are due on May 22.
Broadcom Stock
Broadcom stock rose 4.3% last week to 1,332.82. On Friday, shares rebounded above the 50-day line, flirting with an aggressive entry around 1,355. AVGO stock has a 1,438.17 consolidation buy point. Investors could use 1,403.98 as an early entry.
JPMorgan Stock
JPMorgan stock rallied 4.3% for the week to 198.75, nearing a 200.94 flat-base buy point. On Wednesday, shares rebounded from the 50-day, broke a trendline and topped short-term highs. JPM stock is still actionable from that entry.
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Martin Marietta Stock
Martin Marietta stock gained 1.2% on Friday to 610.43, decisively clearing the 50-day, breaking a trendline and short-term highs, all offering an early entry. MLM stock has a new flat base with a 626.67 buy point.
Martin Marietta is benefitting from a U.S. infrastructure boom, with earnings growth ramping up.
Tesla Stock
Tesla stock skidded 7% last week to 168.47, tumbling back below the 50-day line. Shares have now round-tripped a 15% spike on April 29 after Tesla cleared key hurdles toward introducing Full Self-Driving in China.
Investors are worried about Tesla’s growth prospects, with demand falling despite a stream of price cuts since late 2022. The vehicle lineup is aging with a limited pipeline while rivals step up, especially in China.
On Friday night, Tesla offered 0.99% financing on U.S. Model Y sales, a quiet incentive to boost sales.
What To Do Now
A number of stocks have flashed buy signals in the past week. Investors can keep adding exposure if the market rally continues to act well. But do so gradually.
This week’s inflation reports could propel the major indexes to record highs or knock them back toward the 50-day.
Build up your watchlists. It’s a broad-based rally, which means you need to pay attention to top stocks from a wide variety of sectors.
Review your holdings. Are there laggards you could cut, or leaders that are offering add-on entries?
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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