The Dow Jones futures open on Sunday evening, along with the S&P 500 futures and Nasdaq futures. Nvidia (NVDA) Earnings are in the spotlight after Federal Reserve Chairman Jerome Powell said in Jackson Hole that “the time has come” for the Fed to cut rates.
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Nvidia earnings are a key test of the stock market rally. Here’s what to expect.
The stock market rally had another solid week, with most or all of the rallies mirroring Friday’s Jackson Hole-related gains. The S&P 500 is near record highs, while other indexes are advancing. Many leading stocks are breaking out or rallying.
Investors should be looking for more exposure, but Nvidia’s earnings are expected Wednesday night. Strong Nvidia results and guidance will be crucial for AI games like Broadcom (AVGO), chipmaker of Nvidia Taiwanese semiconductor production (TSM) and Arista Networks (ANET). Like Nvidia, these three AI stocks are near buy points.
In the meantime, Birkenstock (BY ZER), Abercrombie & Fitch (ANF), PDD holdings (PDD), Ollie’s bargain outlet (OLLI), Point of sale (CRM) and storage plays a role NetApp (NTAP guideline), Clean storage (PSTG) and Nutanix (NTNX) will all announce their earnings figures next week.
The PDD of the parent companies in Pinduoduo and Temu report ahead of Monday’s opening.
Nvidia stock is on Leaderboard. Broadcom stock is on SwingTrader. Nvidia and PDD stock are on the IBD 50. Arista stock is on the IBD Big Cap 20. Broadcom was Thursday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Please note that trading Dow futures and other markets overnight does not necessarily result in actual trading during the next regular trading session.
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Rally on the stock market
The stock market rally stalled for several days last week, but ended strongly on Friday with Powell’s upbeat speech in Jackson Hole.
As expected, Fed Chairman Jerome Powell confirmed that rate cuts are coming: “It’s time for policy to adjust.” Powell made it clear he doesn’t want further weakness in the labor market and he didn’t push back against market expectations of 100 basis points of rate cuts this year.
The Dow Jones Industrial Average rose 1.3% in stock trading last week. The S&P 500 index rose 1.45%. The Nasdaq Composite rose 1.4%. The small-cap Russell 2000 jumped 3.6%.
Friday was another follow-through day for all major indexes, although the S&P 500 and Nasdaq had inside days.
The Nasdaq is on a brief pause, remaining just below 18,000, but will reach the 50-day line again on Friday.
The Invesco S&P 500 Equal Weight ETF (RSP) hit a record high on Friday, rising 2.1% for the week.
The stock market has been digesting recent gains and making further progress over the past week, even with Thursday’s tech-driven selloff. Leading stocks have broken out or created smaller V-shaped bases and forged handles.
The two biggest stock market drivers of the year are the ongoing AI boom and hopes for a Fed rate cut. Fed Chairman Powell’s speech in Jackson Hole confirming the rate cuts suggests a favorable backdrop on that front. Will Nvidia’s gains send the same message for AI?
U.S. crude oil futures fell 0.9% to $74.83 a barrel, but remained well below midweek lows.
The 10-year Treasury yield fell nine basis points to 3.81%, hitting a 52-week low on Wednesday. The 2-year Treasury yield, more closely tied to the Fed’s policy, fell 15 basis points to 3.91%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.9% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1%. The VanEck Vectors Semiconductor ETF (SMH) rose 0.7%. Nvidia is the dominant SMH holding, with Taiwan Semiconductor and Broadcom as notable members.
SPDR S&P Metals & Mining ETF (XME) rose 2.1% last week. The SPDR S&P Homebuilders ETF (XHB) rose 8.2%. The Energy Select SPDR ETF (XLE) fell 0.15 and the Health Care Select Sector SPDR Fund (XLV) rose 1.7%.
The Industrial Select Sector SPDR Fund (XLI) rose 1.7%. The Financial Select SPDR ETF (XLF) rose 1.5%.
Looking at more speculative stock stories, ARK Innovation ETF (ARKK) rose 4.85% last week and ARK Genomics ETF (ARKG) rose 3.6%.
Time The Market with IBD’s ETF Market Strategy
Nvidia Win ‘Wildcard’
The AI chip giant reported Wednesday night that Nvidia’s profit is expected to rise 141% from a year earlier, with revenue up 113% to $28.73 billion. That would mark the fifth straight quarter of triple-digit gains for both.
Nvidia’s earnings report is “the most important” event for the technology sector in years, Wedbush analyst Dan Ives wrote in an investor note.
Analyst Hans Mosesmann of Rosenblatt Securities expects another beat-and-raise Nvidia earnings report. But he says the “wild card” is whether it has enough current-generation Hopper AI processors to meet demand.
Analysts want confirmation and details about delays to Nvidia’s next-generation Blackwell processors. And will customers wait for the next-generation AI chip, or will they buy more of the current Hopper line?
Nvidia stock
Nvidia shares rose 3.8% last week to 129.37, thanks to a 4.55% gain on Friday. Shares are trading in a short-term range after a big run from a low of 90.69 on Aug. 5. NVDA shares have a buy point of 140.76 cup-base. Investors could use the past week’s highs as a pseudo-handle entry, ideally after Nvidia’s earnings.
Taiwan Semiconductor Stocks
Taiwan Semiconductor shares fell 1.9% to 171.26 for the week, though shares rose 2.9% on Friday to just reclaim the 50-day line. TSM shares have a 193.47 cup-base buy point but are on track to have a handle with a 175.45 entry after Monday. On a weekly chart, Taiwan Semi shares already have a cup-with-handle base with that 175.45 buy point.
Taiwan Semiconductor makes chips for Nvidia, Broadcom and many others.
Broadcom stock
Broadcom shares rose 0.4% to 166.36, above their 50-day high. AVGO shares would be eligible for action above their Aug. 20 peak of 168.37.
The chip and software giant has a buy point of 185.16, according to MarketSurge. Investors could view this as a lopsided double-bottom base with an entry of 177.10. Following Nvidia’s earnings, Broadcom is scheduled to report its own results on September 5.
Arista shares
Arista shares rose 0.3% last week to 355.06. Shares now have a 358.68 handle buy point. Nvidia is a growing rival in the AI networking space, while Arista uses a lot of Broadcom products, so the chip giants’ earnings reports will be important for ANET stock.
Nvidia and Arista Networks Go Head-to-Head in AI Networking Battle
What to do now
The market rally continues with at least a few quality stocks giving buy signals every day.
Investors could have added more exposure on Friday as Powell supported the rate cuts in Jackson Hole. Continue to do so if the market continues to behave well.
Several AI stocks are setting up, including Nvidia, Broadcom and Taiwan Semi. Investors may want to be cautious about adding further AI exposure ahead of Nvidia earnings.
They should definitely be on your radar, along with dozens of other promising or leading stocks.
Read The Big Picture every day to stay up to date on market developments and the most important stocks and sectors.
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