Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures, amid growing speculation that President Joe Biden could drop out of the race.
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Nasdaq Reverses After Hitting 18,000; Uber, JPMorgan, Hilton In Focus
Biden To Discuss Campaign Future
President Biden will discuss the future of his re-election campaign with family at Camp David on Sunday, NBC News reported Saturday, citing multiple sources. That comes after Thursday night’s presidential debate vs. Donald Trump, in which Biden gave a disastrous performance. That raised concerns about his fitness for office, especially as he seeks a second four-year term. Top Democratic officials have publicly voiced their continued support, but many privately are worried.
Biden is “dependably engaged” from 10 a.m. to 4 p.m. every day, White House aides told Axios, with miscues and fatigue more common at other times of the day.
Biden’s Odds Fall
Biden’s odds of receiving the Democratic nomination have fallen to just 60% vs. 72% on Friday, which was down from 85% before the debate. Vice President Kamala Harris’ odds of receiving the nomination have jumped to 24% from 13% on Friday. Calif. Gov. Gavin Newsom is at 14%, down slightly from 17% on Friday.
Biden’s odds of winning the presidency have now fallen to 25% vs. 36% on Friday and 48% on Thursday before the debate. Donald Trump’s odds are at 59%, little changed from Friday and 53% before the debate. Still, the odds of a GOP sweep have increased.
The rising odds of Donald Trump regaining the presidency with a Republican-controlled Congress hit solar and hospital stocks Friday.
Trump’s Debate Win Gave The S&P 500 A Boost. Then This Happened.
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.
Stock Market Highlights
The stock market rally gave some mixed signals last week. Still, on a weekly basis the major indexes are showing tight action, with the Nasdaq power trend intact.
The Dow Jones Industrial Average edged down 0.1% in last week’s stock market trading after a solid start to the week. The S&P 500 index dipped 0.1% and the Nasdaq composite edged up 0.2% after both reversed from record highs Friday morning.
The small-cap Russell 2000 popped 1.3%, reclaiming its 50-day line.
Looking on a weekly chart, the Nasdaq hasn’t shown any real weakness, rising for the past four weeks and nine out of the last 10.
The Nasdaq is 5.9% above its 50-day line, slightly extended even with sideways action over the past couple of weeks. A longer pause or mild pullback would likely be constructive, letting stocks set up and giving more room for the next advance.
Meta Platforms (META), Amazon.com (AMZN) and Tesla (TSLA) broke out during the week, though they hit resistance Friday. Nvidia (NVDA) retreated but found its footing.
Software came on strong last week, with AppLovin (APP), Monday.com (MNDY) and ServiceNow (NOW) flashing buy signals.
China EV Sales
Investors will get June and second-quarter sales from China EV makers Nio (NIO), Li Auto (LI), XPeng (XPEV) and Zeekr (ZK) early Monday and perhaps EV and battery giant BYD (BYDDF).
Tesla and Rivian (RIVN) should release figures early Tuesday. Most automakers will release Q2 U.S. sales on Tuesday as well.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.4% last week.
The iShares Expanded Tech-Software Sector ETF (IGV) jumped 2.4%, its fourth straight strong weekly advance. ServiceNow stock and AppLovin are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) sank 1.6%, but came off lows somewhat. Nvidia stock is the dominant SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.4% last week and ARK Genomics ETF (ARKG) tumbled 3.5%, back toward the April lows. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
Time The Market With IBD’s ETF Market Strategy
Megacap Stocks
Nvidia stock fell 2.4% for the week to 123.54. But after tumbling 6.7% on Monday, capping a three-day sell-off, the AI chip leader rebounded and steadied above the 21-day moving average. NVDA stock could use a longer break, forging a new base and letting the 50-day line catch up.
Meta stock rose 1.9% to 504.22. Shares cleared a 514.01 cup-with-handle buy point on Thursday, but fell nearly 3% on Friday. However, it’s still around some early entries within the handle.
Amazon stock gained 2.2% to 193.25, moving past a 191.70 flat-base buy point. Shares fell 2.3% on Friday.
Tesla stock jumped 8.1% to 197.88, breaking out from a 191.08 handle buy point. The buy range extends to 200.63. TSLA stock hit resistance at the 40-week line on Friday, but did close higher.
Tesla’s big weekly gain came as several analysts slashed second-quarter delivery estimates ahead of the EV giant’s Tuesday news release.
Amazon Hit This Milestone In The Andy Jassy Era. What’s Next?
Software Stocks In Buy Zones
AppLovin stock leapt 5.9% for the week to 83.22, clearing a tight trendline and a short-term high of 82.66 on Thursday, offering an early entry. The official flat-base buy point is 88.50, according to MarketSurge.
Monday.com stock jumped 7% last week to 240.76, rebounding from the 50-day line within a short, mini-double-bottom consolidation next to another base. The official buy point is 249. However, MNDY stock cleared a trendline on Thursday. On Friday, the software maker tested a short-term high of 239.54, which roughly coincides with the prior base’s buy point of 239.22.
ServiceNow stock rallied just over 5% to 787.19, breaking a trendline. Shares have surged 23% from the May 31 intraday low of 637.99. The official buy point is 815.32. Ideally, NOW stock would forge a handle.
Meanwhile a number of software stocks are running up from the bottom, trading within bases, while a few leaders are extended.
Investors could use IGV — which has a chart a lot like ServiceNow’s — or other software ETFs to play this sector move.
Market Rally Analysis
There are lots of ways for active investors to play the current stock market rally.
A highly active trader might have made numerous trades over the past couple of weeks, catching some winners while also exiting a number of stocks that quickly faded amid the mini-rotations. Other traders may have chosen to take little or no action depending on how their existing positions behaved.
The key is to find the investing style and rules that work for you.
Pay attention to the market and sector action. Many software names should be on your watchlists. And while financials and industrials backed off, many stocks in those areas are very close to being actionable.
The presidential race is a huge wild card, with Biden’s debate performance and the related fallout creating a lot more uncertainty months ahead of Election Day.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Nvidia stock, Amazon and Meta are on IBD Leaderboard. Amazon and Meta stock are on SwingTrader. Nvidia, Monday.com and ServiceNow stock are on the IBD 50. AppLovin was Friday’s IBD Stock Of The Day while Amazon stock was Thursday’s pick.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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