Early Monday morning, Dow Jones futures experienced a slight rise, mirroring the upward movement of S&P 500 futures and Nasdaq futures. Additionally, there was a rebound in Treasury yields.
The stock market rally encountered a mixed week but concluded disappointingly. Although the major indexes initially surged, they encountered resistance, with the Nasdaq leading the losses on Friday. Furthermore, the market breadth displayed weakness, with the Russell 2000 reversing towards 2023 lows. Despite a strong start, several tech leaders subsequently backed off, at times in a volatile manner.
This turn of events defied expectations for the market rally. As a result, investors are advised to exercise caution when considering new investments, especially with the market rally struggling and the earnings season gaining momentum. It might be prudent for some investors to consider selling recent purchases.
While Tesla (TSLA) is expected to report its weakest earnings in two years, the TSLA stock has remained stable as bulls remain optimistic about potential future growth drivers.
Lam Research (LRCX) and ASML (ASML) have initiated results for chip-equipment manufacturers, with their significant customer Taiwan Semiconductor (TSM) also slated to report. ASML stock is encountering difficulties, whereas LRCX stock, along with other major chip-gear giants like Applied Materials (AMAT) and KLA Corp. (KLAC), are displaying positive trends.
Energy giant SLB (SLB) has commenced energy earnings, with energy stocks demonstrating renewed strength. SLB stock is approaching an early entry point.
In addition to the stocks of Tesla, Lam Research, Applied Materials, KLA, and SLB, investors should also keep an eye on leading tech companies such as Arista Networks (ANET), Adobe (ADBE), and Nvidia (NVDA).
Nvidia stock, Tesla, and Arista Networks are all part of the IBD Leaderboard. Moreover, Nvidia, Adobe, and Tesla stock are included in the IBD 50. ADBE stock, Tesla, Nvidia, and SLB are all part of the IBD Big Cap 20.
Lululemon Athletica (LULU) is set to join the S&P 500 index before Wednesday’s opening, according to the announcement made by S&P Dow Jones Indices late on Friday. LULU stock experienced an early surge on Monday, suggesting a potential early entry opportunity.
Over the weekend, Chinese state media reported that Beijing intends to boost deficit spending to stimulate a sluggish economy, following a Bloomberg report from the previous week.
Dow Jones futures saw a 0.4% advance compared to fair value. S&P 500 futures rose by 0.25%, while Nasdaq 100 futures climbed approximately 0.1%. Apple (AAPL), Nvidia (NVDA), and Tesla stock all suffered a 1% drop, exerting downward pressure on Nasdaq futures.
The 10-year Treasury yield bond observed a rise of several basis points, reaching 4.7%.
It is important to note that the overnight movement in Dow futures and other indices may not necessarily translate into the actual trading activity during the subsequent regular stock market session.
