Dow Jones futures fell slightly Monday morning, along with S&P 500 futures and Nasdaq futures. China announced fresh stimulus but the Japanese yen rose as interest-rate hike bets returned. Tesla and key China EV rivals report Q3 deliveries this week.
The stock market rally had a decent week, with the S&P 500 and Dow Jones setting record highs while the Nasdaq cleared a key level.
Nvidia, Taiwan Semiconductor and Broadcom flashed buy signals early in the week, followed by Micron Technology gapping up on earnings and guidance. But AI chip stocks fell back on Friday, with further losses Monday.
Apple is nearing a buy point while Robinhood flashed a buy signal Friday.
Tesla stock kept running, nearing a breakout. The EV giant should report third-quarter deliveries early Wednesday. China rivals BYD, Nio, XPeng, Li Auto and Zeekr also will report Q3 sales. All these stocks had huge weeks along with other China plays.
Carnival reports early Monday, with the cruise line just forging a handle to its cup base.
The video embedded in the article discussed the weekly market action in depth and analyzed Cava, Ryan Specialty Holdings and Eli Lilly.
Dow Jones Futures Today
Dow Jones futures lost 0.2% vs. fair value. S&P 500 futures declined 0.3% and Nasdaq 100 futures fell 0.4%. Nvidia and other AI chip plays were drags on the Nasdaq.
The 10-year Treasury yield rose a few basis points to 3.77%.
Crude oil fell slightly. Bitcoin declined solidly.
Fed chief Jerome Powell will speak Monday afternoon, but it's unclear if he'll speak about the economy or monetary policy.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
China Stimulus Continues, Japan's Yen Jumps
The People's Bank of China on Sunday ordered commercial banks to lower mortgage rates by around 50 basis points, or at least 30 basis points below the PBOC's prime lending rate. Shanghai and some other key cities are further easing housing purchase restrictions.
China's central bank last week cut various rates and banks' reserve requirements, with Beijing reportedly mulling capital injections into banks.
China's manufacturing index rose 0.7 point in September to 49.8, just below the break-even 50 level but above views for 49.5. The non-manufacturing index fell 0.3 point to 50 vs. views for 50.5.
Hong Kong's Hang Seng Index rose 2.4% Monday, after spiking 13% last week, the best weekly gain since 1998. The Shanghai composite leapt 8.1% Monday, its best day since 2008. The Shanghai exchange will be closed through next Monday for national holidays, while Hong Kong will be closed only on Tuesday.
Alibaba gained after soaring nearly 20% last week.
Meanwhile, Japan's Nikkei tumbled 4.8% Monday and the Japanese yen jumped as Shigeru Ishiba unexpectedly won the leadership of the ruling Liberal Democratic Party, making him the likely next prime minister. Ishiba favors higher interest rates, unlike Sanae Takaichi, who had favored to win. The unwinding of the yen carry trade, pushing the yen higher, has been a drag on global financial markets at times over the past two months.
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Stock Market Rally
The stock market rally had a modest but significant week after two powerful weekly gains. The Dow Jones and S&P 500 hitting all-time highs while the Nasdaq cleared the 18,000 level. The Nasdaq entered a power trend on Thursday, with the S&P 500's power trend no longer under pressure.
The Dow Jones Industrial Average rose 0.6% in last week's stock market trading. The S&P 500 index also climbed 0.6%. The Nasdaq composite gained 0.95%. The small-cap Russell 2000 dipped 0.1%, but did rise 0.7% on Friday.
Shipping firms such as Golar LNG and ZIM Integrated Shipping broke out, buoyed by a looming East Coast port strike and big storms.
The 10-year Treasury yield rose 2 basis points to 3.75%. Markets are leaning toward another half-point Fed rate cut in early November. Friday's jobs report could shift the odds significantly.
U.S. crude oil futures fell 4% to $68.18 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 0.85% last week. The iShares Expanded Tech-Software Sector ETF rose a fraction. The VanEck Vectors Semiconductor ETF popped 4.1%. Nvidia is the No. 1 holding in SMH, with Taiwan Semiconductor and Broadcom both major components.
Reflecting more-aggressive stocks, ARK Innovation ETF advanced 2.1% last week But ARK Genomics ETF fell 2.4%. Tesla stock is a major holding across Ark Invest's ETFs. But Cathie Wood has amassed a big NVDA stake as well. Ark also has a small position in BYD stock.
SPDR S&P Metals & Mining ETF jumped 6.3% last week. U.S. Global Jets ETF ascended 5.3%. SPDR S&P Homebuilders ETF climbed 1.7%.
The Energy Select SPDR ETF retreated 1.8% and the Health Care Select Sector SPDR Fund sank 1.5%. The Industrial Select Sector SPDR Fund was up 1.2%. The Financial Select SPDR ETF fell 1.1%.
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Nvidia Stock, AI Plays
Nvidia stock popped 4.7% to 121.40 last week, rising off its 50-day line and clearing a short-term high of 120.79, offering an aggressive entry. Shares ran to 127.67 intraday Thursday, but hit resistance at a trendline. Investors could use Thursday's high as the new early entry, with 131.26 as the official buy point from an unsightly handle.
Taiwan Semiconductor stock climbed 2.2% to 177.93, but finished low in its weekly range. Shares broke out of a cup-with-handle base on Tuesday and were extended by Thursday. But TSM stock fell 4.7% Friday, slightly above the 175.45 buy point, according to MarketSurge.
Broadcom stock advanced 0.9% to 172.69. Shares topped a 172.42 early entry on Tuesday and kept rising to 180.25 intraday Thursday, but snapped its six-session win streak on Friday, down 3%.
All three of these stocks fell modestly early Monday, signaling a move below their recent entries.
Apple Stock
Apple stock dipped 0.2% to 227.79 last week, finding support at the 21-day line. AAPL stock now has a 233.09 handle buy point in a consolidation going back to mid-July. There have been mixed readings on whether demand for the iPhone 16 is robust or lackluster.
Shares rose a fraction early Monday.
Robinhood Stock
Robinhood stock rose 5.1% to 23.89 for the week, thanks to Friday's 6.5% jump. HOOD stock is actionable from breaking the downtrend of an alternate handle in a two-month consolidation. Robinhood is well-positioned as a crypto-friendly trading app with brokerages strong and bitcoin rebounding.
However, shares fell early Monday with bitcoin retreating.
Tesla Deliveries
Tesla should report Q3 deliveries early Wednesday. Analysts expect Tesla deliveries of 462,000 EVs, up from 443,956 in Q2 and 435,059 in Q3 2023. Strong China sales, fueled by cheap financing and government subsidies, will likely offset a weak European market and so-so U.S. sales.
Tesla stock raced 9.3% last week to 260.46. TSLA stock is approaching a cup-base buy point of 271.
Tesla deliveries kick off a busy strgtch for the EV giant. On Oct. 10, Tesla will hold its robotaxi event. Q3 earnings will likely follow around Oct. 23. All of that will be sure to swing Tesla shares.
Tesla Nears Breakout As Deliveries Loom; BYD Races Through Buy Points
China EV Deliveries
Nio, XPeng, Li Auto and Zeekr will report September and third-quarter deliveries on Tuesday, Oct. 1. China EV and battery giant BYD is due Tuesday or Wednesday.
XPeng stock skyrocketed 32.5% last week, with Nio up 23.5%, Li Auto 19.7% and Zeekr 30.1%, but all making their moves not far from major lows. BYD stock leapt 12.9%, racing through a buy zone to a 13-month high.
Early Monday, Nio, XPeng, Li Auto and Zeekr shot up again with Chinese stocks. BYD was not trading yet.
What To Do Now
It's a good idea to step back and look at weekly charts.
The stock market rally had a lackluster Friday, especially AI chip stocks. But it was a positive week for the major indexes. The S&P 500 and Nasdaq are in full power trends, while the Federal Reserve as well as central banks in China, Europe and elsewhere are easing policy.
Leading stocks also generally have been acting well, extending gains even if many came off weekly highs.
A lot of last week's strength was in China names. They didn't offer many good opportunities to enter.
Investors with heavy exposure heading into the past week likely continued to make headway. Look for incremental buys, perhaps making room by taking profits or cutting laggards, but not taking major moves.
Keep working on watchlists, looking for those incremental buys.
Nvidia stock is on Leaderboard. Nvidia and Robinhood stock are on SwingTrader. Nvidia and Broadcom stock are on the IBD 50. HOOD stock and Broadcom are on the IBD Big Cap 20.
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