Dow Jones futures fell modestly early Monday, along with S&P 500 futures and Nasdaq futures.
The stock market rally briefly hinted it might be ready for a pause, as megacaps Meta Platforms, Google parent Alphabet and Nvidia faltered somewhat. But a broad-based advance roared into Friday's close amid mounting Fed rate-cut hopes.
The Dow Jones hit a 52-week high with the S&P 500 setting a 2023 closing high and Nasdaq not far behind. The Russell 2000 finally blasted above a key level as several other breadth indicators flashed green.
This suggests the market rally is transforming into a broader advance. That raises hope that the uptrend can continue, even if some tired tech titans take a breather. Investors can choose to add exposure, perhaps taking the opportunity to diversify beyond AI-focused plays, even as many techs continue to do well.
Arm Holdings, United Rentals, D.R. Horton, TopBuild, InterContinental Hotels, Marriott Worldwide and Palantir Technologies are all flashing buy signals.
DHI stock, Nvidia and Meta are on the IBD Leaderboard. ARM stock is on the Leaderboard watchlist. Nvidia and Meta stock are on the IBD 50. URI stock is on the IBD Big Cap 20. United Rentals was Friday's IBD Stock Of The Day.
The video embedded in the article reviewed the market action in depth and analyzed Arm Holdings, United Rentals and D.R. Horton.
Late Friday, S&P Dow Jones Indices announced that Uber Technologies will join the S&P 500 index on Dec. 18 as part of a quarterly rebalancing. Uber stock. also on IBD Leaderboard, jumped early Monday.
On Sunday, Alaska Air Group said it will buy Hawaiian Holdings, parent of Hawaiian Air, for $1.9 billion including assumed debt. The $18-a-share cash deal is a 270% premium to HA stock's Friday close.
ALK is one of three stocks being demoted from the S&P 500.
ALK stock plunged while HA stock nearly tripled.
Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures declined 0.4% and Nasdaq 100 futures fell 0.5%.
The 10-year Treasury yield edged up to 4.26%.
Crude oil futures fell 1%. Copper prices sank more than 1%.
Bitcoin jumped to above $41,500, sending hot cryptocurrency plays higher.
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 enjoyed a fifth straight weekly gain on the major indexes. Some megacaps muted Nasdaq gains but overall breadth was strong.
The Dow Jones Industrial Average jumped 2.4% in last week's stock market trading, hitting its best levels since January 2022. The S&P 500 index advanced 0.8%. The Nasdaq composite rose 0.4%.
The Nasdaq overcame a 3.5% decline by Google stock and 4% slide by Meta Platforms. NVDA stock sank 2.1%. Both Meta and Nvidia fell below buy points, but aren't far from retaking them.
The small-cap Russell 2000 jumped 3.05% for the week, almost entirely on Friday, to decisively clear the 200-day moving average after hitting resistance multiple times.
The Invesco S&P 500 Equal Weight ETF rallied 2.45% to a three-month high, easily outpacing the S&P 500.
The First Trust Nasdaq 100 Equal Weighted Index ETF gained 1.6%, closing in on its July highs. That bested the Nasdaq 100, which edged up 0.1%.
Many software stocks skyrocketed on earnings this past week. Chips moved sideways as Nvidia stock pulled back.
Industrial, infrastructure, construction, mining, financial and travel plays are racing up the right side of consolidations.
Tech titans pausing while small caps and a variety of sectors gain momentum is a great sign.
There are many reasons to be bullish. That's one of the uptrend's only yellow flags right now. Market sentiment is close to excessive bullishness, while various measures point to the market being somewhat overbought. Those point to somewhat elevated risks of a pullback. But perhaps the megacaps can shoulder much of the burden from any such pullback.
Treasury yields are a clear tailwind for the stock market rally. The 10-year Treasury yield fell 26 basis points for the week to 4.225%, hitting a three-month low. The two-year bond yield, more closely tied to Fed policy, plunged 39 basis points to 4.565%. The yield curve is becoming less inverted.
While Fed chief Jerome Powell said Friday that it's "premature" to discuss rate cuts, investors are taking their cue from other Fed officials and weak data. Markets now are leaning toward Fed rate cuts starting in March.
U.S. crude oil futures fell 1.95% to $74.07 a barrel this past week, sliding 2.5% on Friday.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF jumped 4.4%, with PLTR stock one holding in IGV. The VanEck Vectors Semiconductor ETF edged up 0.4%, with Nvidia stock the top holding.
Reflecting more-speculative story stocks, ARK Innovation ETF vaulted 7.9% last week and ARK Genomics ETF gained 3.7%. Ark Invest ETFs own some Palantir stock.
SPDR S&P Metals & Mining ETF popped 5.5% last week.
The Industrial Select Sector SPDR Fund climbed 2.3%, with URI stock a component. The Global X U.S. Infrastructure Development ETF advanced 2.4%, with BLD stock in PAVE. SPDR S&P Homebuilders ETF was up 3.5%, with DHI stock a major holding and TopBuild also in the ETF.
U.S. Global Jets ETF ascended 3%. The Energy Select SPDR ETF edged up 0.1% and the Health Care Select Sector SPDR Fund rose 0.5%.
The Financial Select SPDR ETF stepped up 2.2% and the SPDR S&P Regional Banking ETF leapt 6.9%.
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Stocks In Buy Zones
ARM stock rose 3.9% to 63.90 on Friday, breaking the downtrend of a cup-with-handle IPO base. The official buy point is 64.92. ARM came public at 51 a share in September, hitting a record 69 on Sept. 15, in the second day of trading. But ARM stock set a record close on Friday.
URI stock jumped 5.4% on Friday to 501.83, clearing its cup-with-handle buy point. The relative strength line isn't at a 52-week high, but is at a consolidation high.
DHI stock gained 2.5% on Friday to 130.86, just topping a 130.79 cup-with-handle buy point. Shares broke a downtrend in the handle, making the homebuilder giant actionable.
BLD stock stepped up 3.1% to 304.84, clearing a 300 buy point from a cup-with-handle base, according to MarketSmith analysis. The handle was tiny, not providing much of a shakeout for the insulation installation play.
IHG stock popped 3.5% to 81.31, clearing a cup-with-handle buy point of 79.20. The breakout volume was rather light.
MAR stock advanced 3.25% to 209.28, breaking a downtrend within a handle. The official buy point is 210.74 for Marriott stock.
PLTR stock added 1.1% to 20.27 on Friday, capping a 5.6% weekly gain. Shares reclaimed a still-valid 20.24 buy point. Investors could have started a position on Tuesday, as Palantir stock rebounded from the 21-day line. Shares are still extended from the 50-day line, which is racing to catch up.
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What To Do Now
The stock market rally continues to show strength, broadening out considerably in the past few days.
Investors could choose to add some exposure, perhaps taking advantage of buying opportunities outside the AI-focused tech sector. Portfolio rebalancing might also involve taking some profits in some tired tech giants.
The broadening rally is why you want to cast a wide net, so you can spot emerging industrials, financials and more that are moving up. So run your screens and update your watchlists.
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Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
