Dow Jones futures edged lower early Friday, along with S&P 500 futures and Nasdaq futures. AI stocks like Nvidia are still in focus.
The stock market rally had a mixed Thursday after the S&P 500 briefly topped 5,500 for the first time, but most stocks retreated.
Nvidia reversed lower Thursday after flirting with extreme technical levels. Fellow AI chip leaders Broadcom, Micron Technology, Taiwan Semiconductor and Arm Holdings fell back after big recent gains. AI laggard Advanced Micro Devices made a strong move Thursday.
AI server makers Super Micro Computer and Dell Technologies initially jumped on a comment from Elon Musk, but erased gains.
Meta Platforms now has a handle, offering a lower buy point.
Meanwhile, Chipotle Mexican Grill tumbled back into a short consolidation.
Nvidia and Taiwan Semiconductor stock are on IBD Leaderboard. Meta stock is on SwingTrader. Nvidia stock is on the IBD 50. Broadcom, Nvidia and Super Micro stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures lost a fraction vs. fair value. S&P 500 futures dipped 0.15% and Nasdaq 100 futures fell 0.2% as Nvidia and Broadcom continued to slide.
The 10-year Treasury yield dipped to 4.23%.
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 started solidly Thursday with the S&P 500 and Nasdaq briefly setting fresh all-time highs, but they fell back as Nvidia reversed lower. But the Dow had a solid session.
The Dow Jones Industrial Average rose 0.8% in Thursday's stock market trading, rebounding from the 50-day line and clearing recent highs from the past few weeks. The S&P 500 index fell 0.25%. The Nasdaq composite skidded 0.8%.
The small-cap Russell 2000 fell 0.4% after again hitting resistance at the 50-day line.
The Nasdaq is 7.1% above its 50-day line, down from 8.2% on Tuesday, but still somewhat extended. Much of that reflects massive moves in AI giants, especially Nvidia. Ideally, the Nasdaq would move sideways or pull back modestly over several days or a few weeks. That would let the 50-day line catch up while leading stocks forge new buying opportunities.
U.S. crude oil prices rose 0.7% to $82.17 a barrel, bringing the weekly gain so far to 4.7%.
The 10-year Treasury yield rose 4 basis points to 4.25%, despite weaker-than-expected economic data. The 10-year yield is still near its lowest levels since late March.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF gave up 2.6%. The iShares Expanded Tech-Software Sector ETF dipped 0.1%. The VanEck Vectors Semiconductor ETF slumped 2.8%. Nvidia stock is the dominant holding in SMH, with Taiwan Semi, Broadcom and AMD also notable holdings.
ARK Innovation ETF fell 0.7% and ARK Genomics ETF declined 0.9%
The SPDR S&P Homebuilders ETF stepped down 1.4%. The Energy Select SPDR ETF climbed 1.8% and the Health Care Select Sector SPDR Fund advanced 0.3%.
The Industrial Select Sector SPDR Fund rose a fraction. The Financial Select SPDR ETF gained 0.5%.
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Nvidia Stock: Time To Take Profits?
Nvidia stock fell 3.5% to 130.78 after hitting a record 140.76 intraday. The AI chip leader finished 30.5% above its 50-day line after briefly topping 40% intraday.
On March 7, Nvidia stock closed 41.9% above the 50-day, the most since June 2003. Shares ran higher the next morning, but staged an ugly reversal, ending down 5.55%. NVDA stock ultimately corrected 22%, capped by a big 10% loss on April 19, diving below the 50-day line. That loss was triggered by AI worries related to Super Micro.
Investors need to decide whether to take some profits in Nvidia. That may depend on what style of trader you are, your conviction in Nvidia and the size of your exposure in NVDA stock and AI overall.
Nvidia stock fell 2% early Friday.
Other AI Chip Plays In The Stock Market Today
ARM stock tumbled 7.7% to 160.77 back below the official 164 buy point after doubling in the prior months. The wireless chip design giant offered an early entry in late May as it rebounded above its 50-day and broke a trendline. Investors may wait to see if ARM stock can pause around the buy point, letting moving averages close the gap.
Broadcom stock sank 3.8% to 1,734.57 after Tuesday's modest downside reversal halted a post-earnings surge.
Taiwan Semiconductor stock gave up 2.4% to 175.38, a day after the Nvidia-chip maker hit a record high.
Micron stock sank 6% to 144.19, a day after hitting a record high. Micron reports earnings on June 26.
On the upside, AMD stock jumped 4.6% to 161.78, rebounding above the 50-day and 21-day lines but off session highs of 166.82. After reversing lower on the March 8 Nvidia downside reversal, AMD retreated significantly. While AMD stock has bounced back since early May, it's well off highs.
All of these stocks fell slightly to modestly early Friday.
Dell, Super Micro Erase Elon Musk Gains
Elon Musk, in a Wednesday post on X, said Dell and Super Micro will assemble the server racks for a supercomputer for his xAI startup.
Super Micro stock jumped to 1,014.02 Thursday morning, but reversed to edge down 0.3% at 917.63. Shares of the AI server maker and Nvidia partner cleared a downward-sloping trendline earlier in the week. SMCI stock is starting to build the right side of a deep base with a 1,229 buy point.
Dell Technologies stock slipped 0.4% on Thursday 148.52, reversing from a high of 161.52. The PC, storage and server giant plunged May 31 following earnings, but found support at the 50-day. Dell stock isn't offering an entry at this time.
SMCI and Dell declined slightly early Friday.
Meta Stock Has New Buy Point
Meta stock edged up 0.4% to 501.70. As of Thursday's close, the Facebook and Instagram parent has an official handle. That gives Meta stock a 514.01 cup-with-handle buy point.
On Thursday, KeyBanc raised its Meta Platforms price target to $540 from 475, citing a "meaningful uptick" in ad prices.
Chipotle Stock Retreats
Chipotle stock fell 6.2% to 3,214.42, erasing over half the gain from a six-day win streak. Shares fell back below the top of a short consolidation. It's finding support at the 21-day moving average.
A number of other leading restaurant stocks retreated, though with more-modest losses.
What To Do Now
The stock market rally is still acting well, though many leaders pulled back Thursday, with some recent buying opportunities such as Chipotle struggling.
Selling winning stocks such as Nvidia is as much an art as it is a science, with no single right answer — and it doesn't have to be all or nothing.
But, ultimately, winners will be sold, whether after a few days or many years. So have sell rules for winning stocks that fit your trading style and make sure you follow them.
Investors should still have significant exposure. You can even look for new buys, though with a higher bar for pulling the trigger and perhaps taking smaller initial positions.
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.
