The Dow Jones futures open on Sunday evening, along with the S&P 500 futures and Nasdaq futures. Apple (AAPL) will unveil the iPhone 16, highlighted by major AI events along with earnings Oracle (ORCL) and Adobe (ADBE). All three tech giants are close to buy points.
↑
X
Stocks plummet as sell-off intensifies; Palantir, CubeSmart and ResMed in spotlight
The stock market rally suffered its biggest weekly losses in more than a year, sending very negative signals. The S&P 500 went from the edge of record highs to well below its 50-day line. The Nasdaq dipped below its follow-through low on August 13.
Investors are worried that the economy is sputtering and that the Federal Reserve may be lagging behind. Meanwhile, the sell-off in artificial intelligence stocks, led by Nvidia (NVDA), intensified.
A number of stocks that were holding up or strengthening have collapsed over the past week, while others are just holding on.
Tesla (TSLA), which dropped sharply on Thursday, gave everything back and more on Friday.
Investors should reduce their exposure and largely stay away from names in the AI and tech sectors.
Nvidia shares are on the IBD Leaderboard, but the position is hedged.
Palantir and Dell will finally join the S&P 500. Stocks are rising.
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.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Rally on the stock market
The stock market rally suffered heavy losses in a week shortened by the holidays.
The Dow Jones Industrial Average fell 2.9% in stock trading last week and the S&P 500 index tumbled 4.25%, the biggest weekly losses since March 2023. The Nasdaq Composite fell 5.8%, its worst week since January 2022. The small-cap Russell 2000 lost 5.7%.
The S&P 500, which entered a power trend on Aug. 30 and looked poised for record highs last week, fell well below its 50-day line. The Russell 2000 also broke below that key level.
The Dow Jones fell from record highs to just above its 50-day high.
The Nasdaq is leading the selloff, dipping below its 50-day line on Tuesday and beginning to approach its 200-day line. On Friday, the tech-heavy index fell below its follow-through low of Aug. 13.
The Invesco S&P 500 Equal Weight ETF (RSP) fell 3.1%, dropping below its 21-day line and testing its 10-week price.
U.S. crude oil futures fell 8% last week to $67.67 a barrel, the lowest price since June 2023. Gasoline futures fell 9.4% to a three-year low.
The 10-year Treasury yield fell 20 basis points to 3.71%. The yield hit 3.65% on Friday morning, below the low of the global sell-off on August 5. The two-year yield fell 27.5 points to 3.65% as the yield curve finally de-inverted.
Despite a series of weak economic reports capped by Friday’s jobs report, the odds of a half-point Fed rate cut on Sept. 18 are now about 30%, after briefly reaching 50% Friday morning. Fed Governor Christopher Waller, a more hawkish member, has supported a rate cut in September but has signaled he would favor a smaller move for now. Expectations of a quarter-point rate cut are adding to concerns that the Fed is lagging behind.
Investors expect interest rates to fall by 100-125 basis points before the end of the year.
Next week’s CPI and PPI inflation reports could give policymakers room to take bolder action this month.
Time The Market with IBD’s ETF Market Strategy
ETFs
Among the growth ETFs is the iShares Expanded Tech-Software After the worst week in over a year, here’s what to doSector ETF (IGV) fell 4%, with Adobe and Oracle as major members.
The VanEck Vectors Semiconductor ETF (SMH) plunged 11.7%. Shares of Nvidia, the dominant SMH holding, fell 13.9% to 102.83 for the week after falling 7.7% the previous week. The 100 level is a key area for NVDA and by extension the chip and AI sectors.
SPDR S&P Metals & Mining ETF (XME) fell 9.8% last week. SPDR S&P Homebuilders ETF (XHB) fell 4.4%. The Energy Select SPDR ETF (XLE) lost 5.8% and the Health Care Select Sector SPDR Fund (XLV) lost 2.1%.
The Industrial Select Sector SPDR Fund (XLI) fell 4.2%. The Financial Select SPDR ETF (XLF) fell 3.2%.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) sold off 7.2% last week and ARK Genomics ETF (ARKG) gave up 8.15%. Tesla is a key component of Ark Invest’s ETFs. Nvidia stock is also a significant holding.
Apple unveils iPhone 16
Apple will show off its iPhone 16 smartphone at a product launch event on Monday at 10 a.m. PT. It will be the first iPhone to feature AI technology, which the Dow tech giant has dubbed Apple Intelligence. There are hopes that the AI-enhanced handset will spark a massive 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 have formed a V-shaped cup-with-handle base with a buy point at 232.92. It’s a base-on-base formation for a previous cup base.
Apple’s iPhone event and the reaction of AAPL stock will be crucial for iPhone chipmakers and for AI companies in general.
What’s on the agenda: Apple unveils iPhone 16; Adobe and Oracle announce earnings
Oracle, Adobe earnings
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 just 0.4% to 141.81, but remained above key moving averages. Oracle is working toward a consolidation buy point at 146.59.
Adobe is set to report its earnings results on Thursday evening, with a focus on the software maker’s generative AI offerings.
ADBE shares attempted to break a 580.55 cup-with-handle base on Tuesday, but turned back. Shares fell 1.9% for the week to 563.41, but remained above their 21-day line.
Oracle and Adobe’s earnings figures provide insight into the extent to which software makers can generate revenue from costly AI investments.
Tesla stock return trips
Tesla shares rose on Wednesday and especially on Thursday, buoyed by robust sales in China and the EV giant’s FSD rollout plans. On Thursday, shares rose above their 50-day line to hit a short-term high of 238.22. That offered an aggressive entry for TSLA stock, but the weak market heightened the risks.
Tesla fell 8.45% on Friday, back below its 50-day line. Shares lost 1.6% to 210.73 for the week.
According to MarketSurge, Tesla has a buy point of 271 cup base.
DoorDash Leads 5 Stocks Near Buy Points Amid Market Sell-Off
What to do now
The stock market rally looks weak. While some sectors are doing better than others, most are still down.
Investors should have a small or modest exposure. They should largely get out of the tech space, except for big long-term winners if they have confidence in those names.
Don’t get excited about a strong open or even one strong session. After so much selling, the market may be “due” for a bounce, but it doesn’t have to happen right away and it doesn’t have to last long.
Look for stocks holding key levels and showing relative strength. These will be primarily in defensive and defensive growth sectors, along with a few traditional growth names.
The number of leading stocks that are still relatively healthy is a positive sign. But just because stocks have been resilient so far doesn’t mean they will remain so. Tesla’s meteoric run is a clear example. ServiceNow (NOW), Meta platforms (META text), DoorDash (DASH) and Netflix (NFLX) also started breaking key levels 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.
YOU MAY ALSO LIKE:
Want to make quick profits and avoid big losses? Try SwingTrader
Best Growth Stocks to Buy and Watch
IBD Digital: Get access to IBD’s best-in-class stock lists, tools and analytics today
When it’s time to sell your favorite stock
Tesla vs BYD: EV giants battle for the crown, but which is the better buy?
Trump or Harris Election Win? Prepare for Huge Impact on Taxes and Stocks
