Dow Jones futures rose sharply on Monday morning, as did S&P 500 futures and Nasdaq futures. Apple (AAPL certificate), Oracle (ORCL system), Palantir Technologies (PLTR), Dell Technologies (DELL) and Tesla (TSLA) will focus on the most important news.
The stock market rally is faltering amid concerns about the economy and the artificial intelligence boom, as well as a still-unwinding carry trade. The S&P 500 and Dow Jones suffered their biggest weekly losses since March 2023, while the Nasdaq saw its biggest sell-off since January 2022, led by Nvidia (NVDA).
Tesla shares, which posted a strong performance on Thursday, gave everything back and then some on Friday.
Investors should reduce their exposure and be willing to do more, but also look for stocks that are relatively strong and holding key levels.
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Stocks plummet as sell-off intensifies; Palantir, CubeSmart and ResMed in spotlight
Dow Jones Futures Today
Dow Jones futures rose 0.65% from fair value. S&P 500 futures rose 0.75% and Nasdaq 100 futures rose 0.9%.
The 10-year Treasury yield climbed to 3.75%. Crude oil futures rose slightly, copper rose nearly 2%.
Chinese consumer prices rose 0.6% in August from a year earlier, just below expectations. Producer prices fell 1.8%, more than expected.
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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AI stocks in the news
The Apple iPhone 16 will be unveiled during Monday’s session, the Dow tech giant’s first AI-enabled handset. It will reportedly feature a new chip with the latest designs from Arm Holdings (ARM).
Oracle earnings are expected after Monday’s close. Oracle shares bucked the trend and rose slightly last week as they work toward a traditional buy point.
Meanwhile, Palantir and Dell will be active Monday on news that the two AI tech companies will join the S&P 500 index ahead of its Sept. 23 open, along with insurance broker Erie Indemnification (ERIE). Palantir and Dell rose early Monday morning, with the former’s shares trading near three-year highs.
Elon Musk also denied a report that his xAI startup has discussed sharing Tesla revenue from FSD and more.
Early Tuesday morning, Nvidia chipmaker Taiwanese semiconductor (TSM) is set to report August sales figures. Taiwan Semi, which also makes chips for Apple and many others, has seen a surge in growth in AI and other advanced chips. TSM shares have a cup-with-handle base, according to MarketSurge. But shares sold off 8.7% last week, well below their 50-day high.
Thursday evening, Adobe (ADBE) reports. Adobe shares flirted with a buy point last week, pulling back to the 21-day line.
These reports provide insight into the demand for AI by businesses and end users, which can help to eliminate or increase fears of an AI slowdown.
Nvidia shares are on the IBD Leaderboard, although the position is hedged. Palantir shares are on the IBD 50.
Inflation reports
The Labor Department is scheduled to release the consumer price index early Wednesday morning and the producer price index before the open on Thursday. The Federal Reserve has shifted to jobs and economic weakness versus inflation concerns, but dovish readings could give policymakers ammunition to push the Fed to make a big rate cut on Sept. 18. Markets are currently predicting a quarter-point cut.
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Rally on the stock market
The stock market rally shattered the bullish trends of the past week. The Dow Jones Industrial Average fell 2.9% in stock market trading last week, falling below its 21-day line and approaching its 50-day line. The S&P 500 index lost 4.25% and the small-cap Russell 2000 gave up 5.7%, both falling well below their 50-day lines.
The Nasdaq Composite fell 5.8%, well below its 50-day line and approaching its 200-day mark. On Friday, the tech-heavy index fell below its follow-through day low of Aug. 13. A close below the FTD low is a very negative sign for a market rally. The S&P 500 did not close below its Aug. 13 FTD low, but it is coming close.
A recovery would not be a surprise after the heavy selling of the past few days, but the market needs more than one good day to start looking healthier again.
Shares of Nvidia, the largest company and stock of the past two years, fell 13.9% to 102.83, after falling 7.7% the previous week.
The 10-year Treasury yield fell 20 basis points last week to 3.71%, a 52-week closing low. The yield curve is no longer inverted, with the 2-year Treasury yield falling 275 basis points to 3.65%.
U.S. crude oil futures fell 8% to $67.67 a barrel, the lowest level since June 2023. Gasoline futures are at a three-year low.
Apple iPhone 16 Headlines AI News
Apple iPhone 16
Apple will unveil its iPhone 16 smartphone during a product event on Monday at 10 a.m. PT. It will be the first iPhone to feature AI technology. There are hopes that the AI-enhanced handset will spark a wave of new iPhone upgrades.
Apple is also expected to show off its latest Apple Watch smartwatches and new wireless AirPods earbuds.
Apple shares fell 3.6% last week to 220.82, back below the 50-day line. AAPL shares now have a V-shaped cup-with-handle base with a buy point at 232.92. It’s a base-on-base formation from a previous cup base.
Shares rose slightly before the open.
Apple’s iPhone event and the reaction of AAPL stock will be crucial for iPhone chipmakers, including Arm stock, and for AI players in general.
Oracle Revenue
Oracle is scheduled to report earnings Monday night. The database software giant is likely to discuss AI gains during its earnings call or at a conference later in the week.
ORCL shares rose 0.4% last week to 141.81, remaining above key moving averages. Oracle is working toward a consolidation buy point at 146.59.
Shares rose slightly in pre-market trading.
Palantir and Dell will finally join the S&P 500. Stocks are rising.
Tesla, Musk’s xAI
Tesla could license AI models from Musk’s xAI for its Full Self-Driving software and share a portion of the revenue in exchange for use of the startup’s AI models, The Wall Street Journal reported Saturday, citing sources.
However, Elon Musk said on his social site X that the potential revenue sharing is “not true.”
Last week, Tesla shares fell 1.6% to 210.73 in a roundtrip. On Thursday, shares rose above their 50-day line to hit a short-term high of 238.22, buoyed by robust sales in China and the EV giant’s FSD rollout plans. That provided an aggressive entry for TSLA stock.
Tesla fell 8.45% on Friday, dropping back below its 50-day line.
Shares rose slightly ahead of Monday’s open.
According to MarketSurge, Tesla has a buy point of 271 cup base.
What to do now
This is not a good time to buy stocks. While some areas, particularly defensive and defensive growth names, are outperforming tech growth names, the vast majority of stocks will follow the market.
Investors should have limited to modest exposure and largely avoid technology except for long-term investments.
But if the market rebounds quickly, a large number of stocks will give buy signals. That could be Apple, Oracle, Adobe, Palantir stocks, and even names like Taiwan Semiconductor, but also a whole bunch of names in the housing, financial, and medical sectors, to name a few.
So make sure your watchlists are up to date. The stocks that hold up best in a tough market often lead the next uptrend. But today’s resilient or standout performers can quickly collapse, as Tesla did on Friday.
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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After the worst week in over a year, here’s what to do
