Dow Jones futures rose Monday morning, along with S&P 500 futures and especially Nasdaq futures, on a report that President-elect Donald Trump is mulling tariff hikes only on critical imports.
The stock market rally had some mixed signals but turned bullish by Friday. The major indexes had weekly losses, but rebounded strongly from Thursday's intraday lows. Meanwhile, many leading stocks triggered buy signals to start 2025.
Nvidia stock made a powerful move Friday, and was adding to gains early Monday, signaling a breakout. All eyes will be on Nvidia CEO Jensen Huang for CES 2025 keynote address on Monday night. His comments will be important for the AI chip space, including Nvidia chipmaker Taiwan Semiconductor and Broadcom. Taiwan Semi stock is in a buy zone.
Tesla tumbled last week amid weak deliveries, but roared back Friday and was up early Monday.
Investors could make some new buys, but be ready to quickly exit.
Nvidia is on IBD Leaderboard, with Tesla stock on the Leaderboard watchlist. Nvidia stock is on SwingTrader. Taiwan Semiconductor stock, Nvidia and Broadcom are on the IBD 50. Broadcom stock and Nvidia are on the IBD Big Cap 20.
Trump Tariff Plans
President-elect Trump's team is mulling imposing tariffs on every country but only cover imports that are critical to national or economic security, The Washington Post reported, citing several sources. During the campaign, Trump called for "universal" tariffs of 10%-20% on all imports. Tariffs on critical imports could still have notable disruptions.
The sources stressed to the Washington Post that the tariff plans are very much in flux. Trump's inauguration is Jan. 20.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures climbed 0.75%, which would mean the S&P 500 would open clearly back above its 50-day line. Nasdaq 100 futures jumped 1%.
Nvidia is a Dow Jones, S&P 500 and Nasdaq component.
The 10-year Treasury yield edged down to 4.59% after nearly hitting an eight-month high Sunday night.
The U.S. dollar fell significantly on the Trump tariff report. Copper and some China-related ETFs rose.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally had another down week on the major indexes, but they came off Thursday's lows and bounced strongly Friday. Meanwhile leading stocks excelled.
The Dow Jones Industrial Average fell 0.6% in last week's stock market trading. The S&P 500 index declined 0.5%, falling below its 50-day line on Monday but nearly reclaimed that level on Friday. The Nasdaq composite fell 0.5%, briefly undercutting its 50-day Thursday but rallying to close just above its 21-day.
The small-cap Russell 2000 rose 1.1%, a second straight weekly gain, but still some distance below the 50-day.
If the Nasdaq can decisively clear its 21-day line and the S&P 500 regains its 50-day — as futures suggest — the market outlook would look more favorable, even with the Dow and Russell 2000 still struggling. That's in large part because leading stocks are showing strength.
In addition to Nvidia, Taiwan Semi and the ongoing AI and megacap tech theme, leadership is surprisingly broad.
Energy stocks are looking interesting. Nuclear stocks have been strong for some time, and are powering higher in 2025, but so are a number of oil and natural gas plays, including DT Midstream and TechnipFMC. Financials such as Interactive Brokers are making moves off key support as well, along with Square parent Block and some other payment stocks. A few restaurant stocks and apparel makers are acting well.
Speculative names in the nuclear and quantum computing realms remain hot, though greatly extended.
If the market picks up even a little momentum, recent buying opportunities could thrive and be joined by many more stocks. Of course, many of these leaders are moving off or right at key support. It wouldn't take much for these stocks to look weak.
The 10-year Treasury yield fell two basis points to 4.6% after surging over the prior three weeks. The December jobs report on Friday will be important.
U.S. crude oil futures jumped 4.8% to $73.96 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 1 cent for the week, thanks to powerful gains Thursday-Friday. The iShares Expanded Tech-Software Sector ETF sank 0.8%. The VanEck Vectors Semiconductor ETF climbed 1.4%. Nvidia and TSM stock are massive SMH holdings.
ARK Innovation ETF gained 0.9% last week and ARK Genomics ETF leapt 5.1%. Tesla stock is a major holding across ARK Invest's ETFs. Cathie Wood's Ark also has a big Nvidia stake.
The SPDR S&P Metals & Mining ETF advanced 1.2% last week. The Energy Select SPDR ETF bounced 3.4% and the Health Care Select Sector SPDR Fund closed flat. The Industrial Select Sector SPDR Fund declined 0.4%. The Financial Select SPDR ETF fell 0.3%.
Time The Market With IBD's ETF Market Strategy
Nvidia CEO Jensen Huang At CES 2025
Nvidia CEO and founder Jensen Huang no doubt will provide an overview of the overall artificial intelligence market at his CES 2025 speech, starting at 9:30 p.m. ET.
After focusing on AI processors for data centers for the past few years, Nvidia is likely to introduce AI chips for PCs at CES. It's also likely that Huang will save some big announcements for Nvidia's own GTC conference in March.
Overall, CES 2025 will be heavy on artificial intelligence, robotics and wearable devices.
Nvidia Stock
Nvidia stock jumped 5.4% to 144.47 in the past week, a third straight weekly gain. Shares leapt Friday in heavy volume to clear the 50-day line decisively, break a trendline and top the Dec. 24 high of 141.90. All that gave a strong buy signal.
Nvidia has a shallow double-bottom base with a 146.54 buy point, right next to the top of a prior base.
Early Monday, Nvidia rose modestly above 148, signaling a breakout.
The relative strength line is getting close to highs, making strong headway as Nvidia bucked the recent downward market trend.
Other AI Chips
Taiwan Semiconductor stock rallied 3.5% last week to 208.60, bouncing from near its 50-day line Thursday and retaking a 205.63 cup-with-handle buy point on Friday. TSM stock popped solidly early Monday.
Taiwan Semiconductor will report December sales on Jan. 10, with fourth-quarter earnings on Jan. 16. Both will be important for the broader AI and chip spaces.
Nvidia CEO Huang's speech could boost AI chips generally, but also could redirect momentum away from custom AI chipmakers Broadcom and Marvell Technology, which have been the new AI stock leaders in recent weeks.
Both Broadcom and Marvell have been consolidating for the past few weeks after huge gains on earnings.
Taiwan Semiconductor makes chips for Broadcom and Marvell as well, so it should be a winner no matter who leads the AI chip race.
Astera Labs, a red-hot AI chip IPO play, rebounded from its 21-day line last week.
Broadcom, Marvell and Astera all rose modestly before Monday's open.
Tesla Stock
Tesla stock tumbled 4.9% last week to 410.44, but jumped 8.2% on Friday. Shares climbed modestly early Monday.
Ideally, the EV giant would find support around its rising 10-week and 50-day moving averages or even forge a new base. But it's not doing that so far.
Early Thursday, Tesla reported fourth-quarter deliveries of 495,570, a new quarterly record, but below estimates of roughly 506,000. In the Q3 earnings report, Tesla predicted full-year deliveries would top 2023's total of 1.81 million. Instead, they fell for the first time, down 1.1% to 1.79 million.
Tesla Deliveries Fall In 2024; Rival Seizes BEV Crown
What To Do Now
The indexes showed mixed action last week, but the Nasdaq showed impressive action from Thursday's lows while the S&P 500 is battling back. Most important, leading stocks looked great.
A large number of stocks flashed buy signals to start 2025.
Investors could have and perhaps should have taken some new positions Friday, but do so gradually. If those stocks and the market send positive feedback, you can keep adding exposure.
The coming week starts off with Nvidia CEO Huang's CES address and other developments from that tech show. On Friday, investors will get the December jobs report, Delta Air Lines earnings as well as Taiwan Semi sales.
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.
