Dow Jones futures rose slightly Monday morning. S&P 500 futures fell while Nasdaq futures fell, led by Apple (AAPL). The Federal Reserve meeting is in focus this week, with policymakers set to cut interest rates for the first time since the Covid crisis in 2020.
The stock market rally has rebounded dramatically, with the S&P 500 and Nasdaq Composite posting their best weekly gains of the year to regain their 50-day lines after a selloff the previous week. The S&P 500 and Dow Jones are near all-time highs. A host of leading stocks gave buy signals.
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Investors are optimistic about the Federal Reserve’s rate cuts and artificial intelligence, the two big catalysts for this year’s stock market rally.
Nvidia (NVDA) CEO Jensen Huang said last week that demand for the company’s AI chips has been “incredible” and said production of next-generation Blackwell chips is underway. Nvidia shares rose, lifting other AI plays and the broader market.
Arista Networks (ANET), Interactive brokers (IBKR), Shift work4 (FOUR), DoorDash (DASH), Royal Caribbean (RCL number), Meta platforms (META text), Sea (SE) and Microsoft (MSFT) are giving buy signals. All have similar stocks that are also doable or close to doable, for a combined total of 25 stocks in buy areas highlighted in this article.
It’s a time for investors to buy stocks, but the Fed meeting is worth keeping an eye on.
Nvidia, DoorDash and Meta shares are on IBD Leaderboard. Interactive Brokers shares are on SwingTrader. Microsoft shares are on IBD Long-Term Leaders. Nvidia, Arista Networks, Meta Platforms and Royal Caribbean shares are on the IBD 50. Arista shares are on the IBD Big Cap 20. Shift4 shares are on IBD Sector Leaders.
Interactive Brokers was Friday’s IBD Stock Of The Day. DoorDash stock was Thursday’s pick. Sea stock was September 6th’s pick.
Apple iPhone 16 pre-orders
Apple iPhone 16 preorders after the first weekend are at about 37 million, according to Ming-Chi Kuo, an analyst at TF International Securities. But the Pro and Pro Max variants were disappointing.
According to reports, Apple stock fell slightly from its 50-day trading line.
Dow Jones Futures
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures fell slightly and Nasdaq 100 futures fell 0.35%. Apple shares are a Dow Jones, S&P 500 and Nasdaq 100 behemoth. Nvidia was a slight drag on the S&P 500 and Nasdaq.
Crude oil futures prices rose about 1%.
Chinese economic data over the weekend suggested a further slowdown in August. Industrial production rose 4.5% from a year earlier, down from 5.1% in July and just below estimates. Retail sales growth slowed to 2.1% from 2.7% in July, below the consensus of 2.3%. Year-to-date fixed investment came in at 3.4%, below the 3.6% in Jan-July. But that also revived hopes that China will finally get another big stimulus.
Please note that trading Dow futures and other markets overnight does not necessarily result in actual trading during the next regular trading session.
Fed Meeting September 17-18: How Much Will Powell Cut Rates?
The Federal Reserve meets Tuesday-Wednesday. A formal statement is expected at 2 p.m. ET on Wednesday. Fed Chief Jerome Powell is scheduled to speak at 2:30 p.m. ET.
It is a foregone conclusion that the Fed will cut rates. But markets are divided on whether the Fed’s first rate cut will be 25 basis points or 50. So it will be a surprise either way.
Markets have almost fully priced in 100 basis point rate cuts by year-end, with a more than 50% chance of 125 basis points.
Fed policymakers will release an updated “dot plot” showing where they think rates are headed, along with economic forecasts. Investors will be watching Powell’s comments closely for clues about the pace of future Fed rate cuts.
A small rate cut by the Fed or a signal from Powell that future action will be gradual could disappoint markets.
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Rally on the stock market
Last week’s stock market rally was a positive break after the ugly, expectation-busting sell-off of the week before.
The Dow Jones Industrial Average rose 2.6% in stock trading last week. The S&P 500 index rose 4% and the Nasdaq Composite rose 5.95%, their best weekly gains of the year. The small-cap Russell 2000 rose 4.4%.
On Friday, September 6, the Nasdaq closed well below its follow-through low of August 13, a very bearish sign. The S&P 500 did not, but it was not far off.
Stocks have rebounded this past week, but Wednesday was the turning point. After selling off to start the session, indexes surged higher, with the S&P 500 closing above its 50-day high. The Nasdaq followed suit on Thursday.
On Friday, the Dow and S&P 500 traded just shy of record highs. The Russell 2000 and S&P MidCap 400 rose above that key level after nearly touching their 200-day lines Wednesday morning.
A number of leading stocks, including some technology names, moved into buy territory during the week
The 10-year Treasury yield fell 6 basis points to 3.65%. U.S. crude futures rose 1.45% to $68.65 a barrel after hitting a 52-week low on Tuesday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 6.95% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 4.8%, with Microsoft shares leading the pack. The VanEck Vectors Semiconductor ETF (SMH) rose 10.2%, with Nvidia shares the dominant component.
SPDR S&P Metals & Mining ETF (XME) rebounded 8.2%. The US Global Jets ETF (JETS) rose 3.7%. SPDR S&P Homebuilders ETF (XHB) rose 6.5%. The Energy Select SPDR ETF (XLE) gained 3.7% and the Health Care Select Sector SPDR Fund (XLV) added 1.4%.
The Industrial Select Sector SPDR Fund (XLI) rose 3.7%. The Financial Select SPDR ETF (XLF) rose slightly by 0.5%.
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Arista shares
Arista Networks shares rose 14.5% last week to 359.76. On Wednesday, the stock crossed the 50-day line and on Thursday provided an early entry by crossing a trend line. On Friday, ANET shares crossed a buy point of 358.68 from an uncomfortable handle.
Related stocks: Fellow AI hardware plays Broadcom (AVGO) and Taiwanese semiconductor (TSM) have been clearing out early entrants. Nvidia shares rose 15.8% last week, offering an aggressive entry above the 50-day, but shares undercut that key level early Monday.
Meta Shares
Meta shares rose 4.9% last week to 524.62. Shares recovered from their 50-day high on Wednesday and then became actionable as they crossed the 21-day line and briefly downtrend. Meta shares have a buy point of 542.81. Investors can also use 544.23 as an alternative entry.
Related stocks: Play online ad Trading desk (TTD) rebounded positively last week from its 10-week line, reclaiming a buy point after a V-shaped consolidation.
Interactive Brokers Shares
Interactive Brokers shares rose 4.5% to 128.07. Shares briefly passed a 128.98 handle buy point on Friday, before moving back but still offering an early entry. IBKR shares found support on the 50-day on Wednesday.
Related Stocks: Stifel Financial (SF) and Piper Sandler (PIPR) provide early access, while Robinhood Markets (HOOD) has broken out.
Shift4 inventory
Shift4 shares rose 9.5% to 82.92, a recovery from the 10-week line. Shares broke a handle’s downtrend on Thursday. On Friday, FOUR shares surpassed the 84.26 cup-with-handle buy point intraday.
Related stocks: Restaurant payments compete Toast (TOST) and buy now, pay later specialist Confirm Holdings (AFRM) are feasible. MasterCard (MA) is located in a traditional buying zone.
DoorDash Stock
DoorDash shares rose 6.3% last week to 131.35, and just passed a 131.21 cup-with-handle buy point on Friday, according to MarketSurge. Shares were already usable after recovering from the 21-day line and breaking out of the handle’s downtrend.
Related stocks: Instacart Parent Maple Bear (CART) is just below the purchase point and is probably worth a move. Uber (UBER) gapped above the 50-day and 200-day lines on Friday, providing an aggressive entry.
Royal Caribbean Stock
Royal Caribbean shares rose 7.3% to 167.96, setting up a 169.47 cup-with-handle buy point on Friday. RCL shares are actionable by breaking trendlines from the top of its base and handle. The cruise giant retook its 21-day and 50-day lines on Wednesday.
Related stocks: Online travel giant Bookings Holdings (BKNG) is on the verge of a breakout. United Airlines (UAL) is in a buy zone.
Sea supply
Sea stock rose 5.2% to 81.18. The Southeast Asian e-commerce and gaming giant held its 76.60 buy point and 21-day line from the previous week. This week, shares rose from the 21-day line and broke a brief downtrend. Technically, Sea stock is slightly extended but still usable.
Related stocks: South Korean e-commerce giant Stubborn (CPNG) is in a buy zone.
Microsoft stocks
Microsoft shares rebounded 7.2% to 430.59, back above the 200-day line and then the 50-day, as well as a short-term high. Although well below the 468.35 consolidation buy point, MSFT stock is useful here as a long-term leader. The relative strength line, while still recovering, is above the 50-day moving average.
Related stocks: ServiceNow (NOW), another software giant with generative AI offerings for end users, is in a buy zone. Amazon.nl (AMZN), a competitor of Microsoft Azure and Amazon Web Services, is liable after the 50-day period expires.
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What to do now
The stock market rally is back on track. Major indices are looking strong and leading stocks are looking better.
Investors should have taken advantage of buying opportunities, especially in recent days. Continue to do so if the market and your holdings are performing well.
While AI and other tech growth stocks are back in play, many other sectors continue to look strong. That should be reflected in your watchlists and your portfolio.
However, the Fed meeting and Powell’s comments pose a major risk.
Read The Big Picture every day to stay up to date on market developments and the most important stocks and sectors.
Follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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Meta, Nvidia Chipmaker Lead 5 Stocks Giving Buy Signals
