Dow Jones Futures Rise, Oil Dives As Two Global Risks Ebb; Tesla, Nvidia In Buy Zones

ED CARSON
07:51 AM ET 10/28/2024

Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures. Crude oil plunged after Israel’s “precise” airstrikes on Iran while the yen weakened after Japanese elections.

Apple (AAPL), Microsoft (MSFT), Google-parent Alphabet (GOOGL), Amazon.com (AMZN) and Meta Platforms (META) all report this coming week, with enormous implications for the tech sector and broader market.

Big economic reports also are on tap, including the October jobs report. Election Day and the next Federal Reserve meeting are next week.↑X

0 seconds of 25 secondsVolume 0%NOW PLAYINGS&P 500 Giants Report Earnings. Will Megacap Results Sustain The Tech Rally?

Boeing (BA), seeking cash amid a punishing strike, announced plans to sell 90 million shares — worth nearly $14 at current prices — plus $5 billion worth of depositary shares. The Dow giant had recently filed to sell up to $25 billion in shares and debt. Shares edged higher early Monday.

The stock market was mixed last week, but the Nasdaq hit a record high. A number of stocks flashed buy signals Friday, including Tesla (TSLA), Nvidia (NVDA) and AI chip IPO Astera Labs (ALAB).

Nvidia and Meta stock are on IBD Leaderboard and the IBD 50. Nvidia stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders.

Dow Jones Futures Today

Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures climbed 0.45% and Nasdaq 100 futures advanced 0.6%.

The 10-year Treasury yield edged up to 4.26%.

Crude oil futures dived 6% amid hopes that Mideast violence won’t escalate. Israel launched “precise strikes on military targets in Iran” on Saturday, in response to an Iranian missile attack earlier this month, but didn’t target oil and nuclear facilities. State-run Iranian media downplayed the long-awaited attack.

Japan’s ruling Liberal Democratic Party and coalition partner lost their majority in the lower house of parliament in Sunday’s elections. The LDP is still likely to end up forging a new, broader coalition. The Nikkei rose 1.8% while the Japanese yen weakened vs. the dollar, which has been a positive for global markets.

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 showed mixed weekly action, with Tesla, Nvidia and some other megacaps masking weak breadth.

The Dow Jones Industrial Average fell 2.7% in last week’s stock market trading. The S&P 500 index lost nearly 1%. The Nasdaq composite climbed 0.2%. The small-cap Russell 2000 gave up 3%.

The Dow Jones and Russell 2000 are below their 21-day lines, with the latter closing just below its 10-week line. The S&P 500 is above its 21-day line and not far from all-time bests. The Nasdaq hit a record high Friday, though it came off intraday highs.

In addition to Tesla, Nvidia and Astera Labs, many other names cleared buy points Friday. Western Digital (WDC), ResMed (RMD), Deckers Outdoor (DECK) and L3Harris Technology (LHX) did so on earnings.

The 10-year Treasury yield jumped 16 basis points to 4.23%. In the coming week, investors will get a slew of economic data, including the first read on Q3 GDP and the October jobs report. That will presage the Fed meeting on Nov. 6-7.

U.S. crude oil futures jumped 4.5% to $71.78 a barrel last week.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.1% last week. The iShares Expanded Tech-Software Sector ETF (IGV) edged down 0.1%, with Microsoft a huge IGV component. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.6%. Nvidia stock is by far the biggest SMH holding.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 0.75% last week and ARK Genomics ETF (ARKG) sold off 6.05%. Tesla stock is a major holding across Ark Invest. Cathie Wood also has built up a big Nvidia stake and also owns some BYD stock.

SPDR S&P Metals & Mining ETF (XME) tumbled 4% last week. SPDR S&P Homebuilders ETF (XHB) plunged 7.15%. The Energy Select SPDR ETF (XLE) fell 0.6% and the Health Care Select Sector SPDR Fund (XLV) lost 2.95%. The Industrial Select Sector SPDR Fund (XLI) gave up 2.8%.

The Financial Select SPDR ETF (XLF) sank 2%.

Time The Market With IBD’s ETF Market Strategy

Tech Titans On Tap

Google reports Tuesday night, with Microsoft and Meta Platforms Wednesday. Apple and Amazon will follow Thursday night. Arguably all are near or flirting with various buy points or aggressive entries, but the looming earnings make that highly risky.

Just these five companies boast a combined market valuation of more than $12 trillion, so their direct stock reactions will have a significant impact on the major indexes. Meanwhile, Microsoft, Google, Amazon and Meta will have a huge influence on the entire artificial intelligence sector with their comments on AI monetization and capital spending plans. Apple results will be key for iPhone chipmakers and other suppliers. Online advertising, e-commerce and more also will key off these tech titans.

The ripple effects will be important for the likes of Nvidia, Broadcom (AVGO), Taiwan Semiconductor Manufacturing (TSM), Arista Networks (ANET), Qualcomm (QCOM) and many more. Just Nvidia, Broadcom and Taiwan Semi boast well over $5 trillion in combined market cap.

Tesla Stock

Tesla stock skyrocketed 22% last week to 269.19, clearing a 264.86 buy point from a cup-with-handle pattern, according to MarketSurge. That’s also a 13-month closing high. However, TSLA stock is extended 16.8% above its 50-day line.

Tesla earnings unexpectedly rose as gross margins rebounded. Elon Musk predicted higher deliveries in 2024 and a 20%-30% jump in 2025, along with several other bullish comments.

Meanwhile, Tesla archrival BYD (BYDDF) climbed 2% to 37.60 for the week, rising within a buy zone. BYD will report third-quarter earnings on Oct. 30. Along with its China peers, it’ll release October sales figures on Nov. 1-2.

EV Giant BYD Is Set To Overtake Tesla By This Key Measure

Nvidia Stock

BofA Securities analyst Vivek Arya pounded the table for Nvidia and other chip stocks on Friday, citing a “generational capex cycle in generative AI infrastructure.”

Nvidia stock rose 2.6% to 141.54 for the week, clearing a 140.76 consolidation buy point and hitting a record high. It’s the fifth straight weekly gain for NVDA. Shares are now 13.8% above the 50-day line.

Meanwhile, recent IPO and AI chipmaker Astera Labs jumped 8.7% to 72.67, clearing a 70.74 buy point from a deep cup-with-handle base. Doubling since early September, ALAB stock is 42.2% above its 50-day line. Astera Labs reports Q3 results on Nov. 4.

But, once again, Microsoft, Meta, Google and Amazon comments on AI and capital spending plans will be huge for AI hardware plays such as Nvidia and Astera Labs.

Five Stocks Near Buy Points Fueled By Earnings

What To Do Now

The stock market rally had a mixed week but many growth stocks fared well.

Investors could have taken advantage of some opportunities, but also could have offset that by cutting laggards or trimming positions around earnings.

The coming wave of earnings reports — which extend far beyond Apple, Meta, Microsoft, Amazon and Google — could be a catalyst for big market gains, losses or whipsaw action. Key economic reports also are on tap, with the Nov. 5 Election Day and Nov. 6-7 Fed meeting on the horizon.

And, as Israeli airstrikes vs. Iran showed, geopolitical events and other unscheduled news is always a possibility.

So you have to have your game plan ready for your current holdings. You do want to keep updating your watchlists, so you can spot promising setups as well as get a bead on sector trends.

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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