Dow Jones futures edged lower early Friday, while S&P 500 futures and Nasdaq futures fell modestly. Nike (NKE) and FedEx (FDX) were big movers overnight on news.
The stock market rally had strong gains Thursday in a day two reaction to Wednesday’s big Fed rate cuts. The Nasdaq led, clearing key levels. The Dow Jones and S&P 500 hit record highs.
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Stocks Jump, Dow Tops 42,000 Post-Fed; Ferrari, CRS, Taiwan Semi In Focus
Meta Platforms (META) gapped above buy points. Nvidia (NVDA) and Apple (AAPL) jumped above their 50-day lines while Tesla (TSLA) powered past a short-term high. All three offered aggressive entries, though NVDA stock might be too early.
Also breaking out or flashing buy signals:Â Carpenter Technology (CRS), Spotify (SPOT), Shift4 (FOUR), Alibaba (BABA), Uber Technologies (UBER), Netflix (NFLX), Nvidia chipmaker Taiwan Semiconductor (TSM), Broadcom (AVGO), Modine Manufacturing (MOD), Monday.com (MNDY), TransMedics Group (TMDX), Royal Caribbean (RCL), Caterpillar (CAT) and Ferrari (RACE).
While it was a broad advance, there was a clear shift toward growth and aggressive growth. Defensive groups such as utilities and REITs fell slightly once again.
Investors should take advantage of the buying opportunities, while adding more high-octane names to their portfolios.
Nvidia, Ferrari and Meta stock are on IBD Leaderboard. Nvidia stock, Monday.com, Ferrari and Spotify are on SwingTrader. TransMedics, Nvidia, Monday.com, Royal Caribbean, Meta Platforms and Netflix stock are on the IBD 50. Shift4 stock is on IBD Sector Leaders.
Dow Jones Futures Today
Dow Jones futures were slightly below fair value, even with a boost from Nike stock. S&P 500 futures fell 0.3% and Nasdaq 100 futures lost 0.45%.
Crude oil fell slightly.
China’s central bank kept interest rates unchanged overnight, a surprise given the Fed’s big rate cut and the weak Chinese economy.
The Bank of Japan left rates steady, as expected.
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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Nike CEO Shift
Nike announced Thursday night that Elliott Hill will take over as CEO on Oct. 14, with John Donahoe stepping down. Hill worked at Nike from 1998 until retiring in 2020 as consumer and marketplace chief. Nike stock jumped in premarket trade. NKE stock has been in a downtrend since late 2021 amid China woes and increased competition.
FedEx Earnings
After the close, FedEx (FDX) earnings fell short and the shipping giant slashed guidance. FedEx stock plunged more than 10% in extended trade. Shares had closed higher for a ninth straight session, clearing an aggressive entry within a base.
Lennar (LEN) reported better-than-expected earnings but fell margin guidance. Lennar stock fell modestly early Friday. Shares hit new highs in Thursday’s session.
Stock Market Rally
The stock market rally roared higher Thursday a day after Wednesday’s downside reversal. Investors slept on the big Fed rate cuts and decided they like the backdrop of lower rates and an apparent economic soft landing. The indexes did close modestly off the day’s best levels.
The Dow Jones Industrial Average popped 1.3% in Thursday’s stock market trading and the S&P 500 index 1.7%, both to all-time levels. The Nasdaq composite jumped 2.5%, now decisively above the 50-day line and clearing resistance at the 18,000 level. The small-cap Russell 2000 leapt 2.1%, closing in on multiyear highs.
The Invesco S&P 500 Equal Weight ETF (RSP) rose 1.1%, setting a record intraday.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) bounced 2% to a two-month high, not far from the July 16 all-time best.
With the S&P 500, Dow and RSP at new highs as the Nasdaq and Russell 2000 look like cup-with-handle breakouts, it’s no surprise to see a large number of stocks breaking out.
There appears to be a clear shift from defensive sectors to growth and aggressive growth. Will that trend hold?
U.S. crude oil prices rose 1.5% to $71.95 a barrel.
The 10-year Treasury yield climbed 5 basis points to 3.74%, continuing to bounce from Tuesday’s 52-week low. The two-year yield was flat at 3.6%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) gained 2.2%. The iShares Expanded Tech-Software Sector ETF (IGV) bounced 2.7%. The VanEck Vectors Semiconductor ETF (SMH) jumped 4.3%. Nvidia stock is the largest SMH holding by far, with Taiwan Semiconductor stock and Broadcom major components.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rallied 2.7% and ARK Genomics ETF (ARKG) was up 2.1%. Tesla stock is a major holding across Ark Invest’s ETFs, but Meta is an even-bigger weight. Cathie Wood also has built up a big stake in NVDA stock.
SPDR S&P Metals & Mining ETF (XME) ran up 3.4%, with Carpenter Technology stock the No. 1 holding. The Global X U.S. Infrastructure Development ETF (PAVE) climbed 3%, with CRS stock also in this ETF. U.S. Global Jets ETF (JETS) ascended 0.7%. The SPDR S&P Homebuilders ETF (XHB) stepped up 2.75%, with Lennar stock in the ETF. The Energy Select SPDR ETF (XLE) advanced 1.2% and the Health Care Select Sector SPDR Fund (XLV) edged up 0.4%.
The Industrial Select Sector SPDR Fund (XLI) rose 1.7%, with Caterpillar, Uber stock and FedEx members. The Financial Select SPDR ETF (XLF) climbed 1.1%. The SPDR S&P Regional Banking ETF (KRE) leapt 2.85%.
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Meta Stock
Meta Platforms stock rallied 3.9% to 559.10 on Thursday. That pushed shares above a 542.81 buy point and a 544.23 alternate entry from a three-weeks-tight pattern.
Meta stock offered an early entry last week as it rebounded above the 50-day and 21-day lines, but now the Fed is out of the way.
Tesla Stock
Tesla stock jumped 7.4% to 243.92, clearing an aggressive entry of 235. TSLA stock has a 271 consolidation buy point, according to MarketSurge. Tesla China registrations were solid in the latest week, according to reports Thursday.
Tesla has a busy October, with third-quarter deliveries likely on Oct. 2, the robotaxi event on Oct. 10, and Q3 earnings on Oct. 16.
Meanwhile, China EV maker Nio (NIO) launched its Onvo L60 crossover on Thursday, a feature-loaded Model Y rival at a cheaper price.
As of Thursday night, Tesla dropped the price of Full Self-Driving to as low as $4,500 for select new inventory vehicles, another incentive to boost sales at the end of the quarter. The normal FSD price is $8,000, down from a peak of $15,000. FSD, despite its name is a Level 2 driver-assist system.
Nvidia Stock
Nvidia stock gained 4% to 117.87, back above its 50-day moving average after hitting resistance at the key level for several days. Investors could have used that as an aggressive entry. However, shares came off intraday highs of 119.66 and are still down for the week.
Taiwan Semiconductor and Broadcom stock are AI chip plays with better-looking charts.
NVDA stock has a 131.26 buy point from an unsightly handle. Investors also could use last week’s high of 120.79 as a much-smaller handle.
Apple Stock
Apple stock advanced 3.7% to 228.87, gapping above its 50-day moving average. The Dow Jones tech titan rallied on positive comments about the iPhone 16, following concerns of underwhelming demand. The latest handset, which begins official sales on Friday, will have AI features later this year.
Apple stock has a handle buy point of 232.92. Investors could have used Thursday’s move as an aggressive entry. There’s also a trendline, with Thursday’s intraday high of 229.82 as a specific trigger.
Other Stocks In Buy Zones
Carpenter stock, Spotify, Shift4, Alibaba, Netflix, Taiwan Semiconductor, Modine Manufacturing, Royal Caribbean and Caterpillar all cleared traditional buy points on Thursday. Monday.com stock cleared a short consolidation.
Uber stock cleared some key short-term levels in a long consolidation.
Broadcom stock broke a trendline entry, still in range of its 50-day line within a proper consolidation. TransMedics stock also broke a trendline, moving off the 50-day as it still works on a new base. Ferrari stock broke a short trendline and retook its 21-day line while rebounding from its 10-week line.
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What To Do Now
The stock market rally continues to gain momentum, with the major indexes at record highs or clearing key levels. Dozens of stocks have flashed buy signals in the past few days.
This is when investors should be looking to step on the gas, moving toward fully invested or even on margin if that’s your risk tolerance. Don’t accelerate like you’re in a Tesla, even if you own TSLA stock. Add exposure — which already should have been significant heading into Thursday — gradually.
Also consider rotating out of defensive and even defensive growth names to make room. There’s been a clear shift into growth and aggressive growth, especially into AI and other tech plays. You don’t want to have a portfolio of super-octane stocks, but you can look to be more aggressive with what you own as well as how much you own.
The past few days are when the hard work of analyzing charts and building up watchlists pays off. Keep working on those lists, both to identify potential new buys and to spot which sectors are rising up or down.
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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