Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Applied materials (huge) headlined earnings reports Thursday evening.
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The stock market rally continued to advance Thursday on hopes of a debt ceiling deal. Big tech has taken over. The Nasdaq Composite advanced, with the Nasdaq 100 rising to a 52-week high. The S&P 500 has achieved its best level of the year. Thursday’s gains were very heavy, but the Dow and market breadth were somewhat positive.
Netflix (NFLX) And Synopsys (SNPS) jumped all 9% Thursday and Palantir Technologies (PLTR) jumped nearly 15%, all exiting bases and previous buy zones. Cadence Design Systems (CDNS) made a strong move and Dynatrace (DT) broke out.
nvidia (NVDA) rose 5%, and started to move vertically ahead of next week’s earnings. service now (now) has continued to climb beyond the overbought zone and is up 12% so far this week.
Buying opportunities exist, but resist FOMO.
Do not chase the arrows if they are extended. A downturn in the broader market or in technology wouldn’t be surprising.
More Fed speakers will be on the phone on Friday, including Fed Chair Jerome Powell.
Applied Material Earnings
AMAT stock fell slightly in late trading after Applied Matters earnings beat second-quarter financial views. The chip equipment maker gave Q3 guidance with midpoints that topped the consensus. Applied Materials stock rose 3.4% in Thursday’s session to 129.92, moving above the 125.72 cup base buy point. On Monday, AMAT stock liquidated early entry as it broke above the 50-day line. Looming profits, however, made these entries risky.
Fellow semiconductor equipment giants ASML (ASML) And KLA Corp. (cling) hasn’t changed much overnight L Research (LRCX) is slanted downward. ASML stock broke out on Thursday while LRCX stock is now extended. KLAC stock, which made an early entry on Monday, rallied towards an official buy point but extended from the 50-day line.
ASML stock and Nvidia running IBD Leaderboard. LRCX Stock and Rhythm Design are available on SwingTrader. Shares of KLAC, Cadence Design, and Synopsys are IBD’s long-term leaders. Stock now on defect 50. ServiceNow and CDNS are in the IBD Big Cap 20.
The video embedded in the article highlighted Thursday’s tech-led market rebound and analyzed Cadence Design, ASML and NFLX stock.
Dow jones futures today
Dow Jones futures rose against fair value. S&P 500 futures rose 0.15% and Nasdaq 100 futures rose 0.3%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live
Stock market rise
Thursday’s stock market rally was dominated by big tech stocks, but all major indices advanced.
The Dow Jones Industrial Average rose 0.3% in stock market trading Thursday. The S&P 500 jumped 0.9%. The Nasdaq Composite jumped 1.5%. Small cap Russell 2000 rose 0.6%.
US crude oil prices fell 1.3 percent to $71.86 a barrel.
The 10-year Treasury yield rose 7 basis points to 3.65%, the highest level in two months. The US dollar continued its significant rise over the past two weeks, hitting a two-month high.
Strong economic data, along with bank easing and concerns about the US debt ceiling, are reviving the possibility of a Fed rate hike. Fed policymakers continued to signal that they are not ready to announce a pause. The odds of a June 14 rate hike have risen to 36%, from 28% on Wednesday and 11% a week ago.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) rose 1.3%. iShares Expanded Technology and Software ETF (IGV) jumped 2.4%. ServiceNow stock is a big component of IGV. VanEck Vectors Semiconductor Corporation (SMH) jumped 3.5%. AMAT and Nvidia stocks are SMH’s big holdings, along with ASML, LRCX, and KLAC.
Rhythm design systems and SNPS stocks are in IGV and SMH.
Reflecting stocks with more speculative stories, the ARK Innovation ETF (ark(up 1.4% and ARK Genomics)ARKG) advanced 0.7%. Ark Invest revealed that it bought 1.26 million shares of PLTR on Wednesday.
SPDR S&P Metals & Mining ETF (XME) decreased by 0.2%. American global aircraft (Planes) rose 0.3%. Homebuilders SPDR S&P (XHB) increased by 1.7%. Energy Defined Fund SPDR ETF (xle(advanced 0.7%, SPDR Healthcare Sector Selection Fund)XLV) decreased by 0.2%.
SPDR Financial Selection Fund (45) rose 0.7%. SPDR S&P Regional Banking ETF (Creates) increased by 0.6%.
Top five Chinese stocks to watch now
Market rally analysis
The stock market advanced higher on Thursday but still relies on high-cap technology. The Nasdaq Composite Index hit a nine-month high. The Nasdaq 100, which includes the 100 largest non-financial components of the Nasdaq index, rose past its August peak to hit a 52-week high.
The S&P 500 rose beyond the peaks in February and May, marking its best level since last August.
The Dow Jones fell for most of the session, but lately rose above the 21-day line.
Winners outnumbered losers on Thursday, but not by much, especially on the Nasdaq. New highs have crossed new lows, in the best showing in weeks.
ETFs of equal weight were encouraging. First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEW) jumped 1.6%, after Wednesday’s move of 1.2% near the 50-day line. This reflects the strength of high-cap chip and software names beyond huge brands.
Invesco S&P 500 Equal Weight Fund (RSP) rose 0.8%, closing above the 50-day and 200-day lines for the first time since May 1st. But the RSP is a long way from its 2023 highs.
The Nasdaq and the Nasdaq 100 may be due to some measures due to pull back, although this does not have to happen overnight. Many tech stocks, including Nvidia, are looking stretched and could use a breather. Others – such as ServiceNow, Synopsys and Palantir – seem stretched from a buying perspective.
A strong dollar and higher Treasury yields should be a negative, especially for high-value growth stocks, but that hasn’t affected technology lately.
Can the NASDAQ 100 pull the rest of the market higher as gains extend? This is what happened on Thursday. Or will the broad market affect large-cap technology companies?
Adding to the uncertainty, the market is facing an alternation of macro concerns. For months, Wall Street has been obsessed with inflation and raising Fed rates. It then turned to banking concerns and recession risks, with some debt ceiling concerns recently. Now there is a bit of a turn to Fed concerns, as well as a stronger dollar.
It’s time to market with IBD’s ETF Market Strategy
What are you doing now
If you’re into Nvidia, Palantir, ServiceNow, and other big winners, you might be prolific. Have a strategy for taking profits, whether on the way up or down.
If you’re watching the big winners fly by, you’re going to feel FOMO pulls. Keep your emotions in check and stick to your rules.
Whatever you do, don’t chase extended stocks, especially now.
Have your watchlists ready, paying particular attention to a selection of names close to hacks. Set alerts. Doing this work early means you’ll be ready to act when stocks give flash buy signals.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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