Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDA) chipmaker Taiwan Semiconductor (TSM) will announce sales data Friday.
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The stock market rally had a solid Thursday, with the Dow Jones rising for a seventh straight session. Leading stocks showed bullish or constructive action.
Nvidia stock fell slightly for a third straight day, working on a possible handle. Broadcom (AVGO) is close to various entries. Chip-equipment giants Applied Materials (AMAT) and KLA Corp. (KLAC) are also near buy points.
Taiwan Semiconductor stock traded between two buy points heading into April sales data. TSMC makes chips for Nvidia, Broadcom, Apple (AAPL) and many others. It’s also a huge chip-gear buyer.
The Taiwan Semi sales data follows earnings reports from AI chip IPOs Arm Holdings (ARM) and Astera Labs (ALAB).
Meanwhile, Tesla stock just undercut a key level with Tesla (TSLA) rival BYD (BYDDF) in a buy area.
Nvidia is on IBD Leaderboard, with Taiwan Semiconductor and ALAB stock on the Leaderboard watchlist. Nvidia stock is on SwingTrader and the IBD 50. KLAC stock is on IBD Long-Term Leaders. AVGO stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures and Nasdaq 100 futures edged higher.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally had broad gains on Thursday.
The Dow Jones Industrial Average rose 0.9% in Thursday’s stock market trading. The S&P 500 index climbed 0.5%. The Nasdaq composite advanced 0.3%. The small-cap Russell 2000 gained 0.9%.
The Dow Jones, up for seven straight sessions, is moving toward record highs. So is the S&P 500. The Nasdaq and Russell 2000 paused over the past few days. All are above their 50-day moving averages.
Leading stocks continue to act well. In addition to various tech names, a large number of restaurants, financials, medicals, builders and infrastructure plays are showing strength.
U.S. crude oil prices edged up 0.3% to $79.26 a barrel.
The 10-year Treasury yield fell 3 basis points to 4.45%, its lowest close in a month.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.1%. The VanEck Vectors Semiconductor ETF (SMH) fell 0.6%. Nvidia and TSM stock are the two largest SMH holdings, with Broadcom, KLA and AMAT stock also key members.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 0.6% and ARK Genomics ETF (ARKG) popped 1.9%. Tesla is the No. 1 holding across Ark Invest’s ETFs. Cathie Wood’s Ark also owns a tiny stake in BYD.
SPDR S&P Metals & Mining ETF (XME) jumped 2.1% and the Global X U.S. Infrastructure Development ETF (PAVE) gained 1.2%. The SPDR S&P Homebuilders ETF (XHB) rallied 2.1%. The Energy Select SPDR ETF (XLE) climbed 1.3% and the Health Care Select Sector SPDR Fund (XLV) added 0.9%.
The Industrial Select Sector SPDR Fund (XLI) ran up 1% while the Financial Select SPDR ETF (XLF) advanced 0.75%.
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AI Chip Stocks
Taiwan Semiconductor dipped 0.6% to 142.79 on Thursday. Shares are working on a 148.43 double-bottom buy point. TSM stock reclaimed the 50-day line on May 3 and has crossed a downward-sloping trendline.
Nvidia stock fell 1.8% on Thursday to 887.47, a third straight slight decline, still holding the 50-day line. The AI chip leader has a 974 consolidation buy point, according to MarketSurge. NVDA stock appears to be starting to work on a handle, which would provide a lower buy point. Nvidia earnings are due on May 22.
Broadcom stock slipped 1.5% on Thursday to 1,305.67, just below the 50-day line. AVGO stock has a 1,438.17 consolidation buy point, though investors could use 1,403.98 as an early entry. A decisive move above the 50-day, perhaps clearing the 1,355 area, could be an aggressive entry.
Applied Materials stock edged down 0.5% to 206.33 on Thursday, still holding the 50-day line. Shares have a 214.91 flat-base buy point. Investors could use the May 7 high of 209.47 as an entry. But Applied Materials earnings are due on May 16.
KLA stock retreated 0.9% on Thursday to 710.67, slightly below a 727.64 flat-base entry.
Arm stock fell 2.3% on Thursday to 103.59, coming off intraday lows of 97.76. Shares have rebounded somewhat over the past few weeks, but only recaptured a portion of its huge mid-April losses. Late Wednesday, the AI and wireless chip designer beat fiscal Q4 views and guided up on Q1, but gave a lackluster full-year sales target.
Astera Labs stock rose 1.2% on Thursday to 70.06, but after plunging 9.1% on Wednesday. Late Tuesday, the AI chip IPO soundly beat Q1 views and guided up on the current quarter, but it wasn’t enough. ALAB stock has a 95.21 buy point from an IPO base, though the April 29 high of 88.59 might be a better entry. However Astera Labs, like Arm, may need time before setting up again.
Tesla Stock
Tesla stock fell 1.6% to 171.97, just undercutting the 50-day line. Shares have given up most of their 15% gain on April 29. That came after Tesla cleared key hurdles toward introducing Full Self-Driving in China.
Rich Otto announced Wednesday that last week he stepped down as head of Tesla’s new product launches, citing poor morale amid sharp, ongoing layoffs.
Elon Musk has announced layoffs of more than 10%. He axed the Supercharger and new vehicles teams axed entirely, amid weak demand and an apparent shift away from new vehicles. A large number of top executives have stepped down or been fired over the past few months.
BP (BP) said Thursday it wants to buy Tesla Supercharger sites in the U.S.
Meanwhile, China’s BYD rose 1.8% to 28.95. BYD stock, the only EV maker that’s up in 2024, is actionable above the 200-day line and a short consolidation. The EV giant is set to unveil the Sea Lion, a Model Y rival, on Friday with fast charging, smart-car tech and other features. BYD will formally launch a plug-in hybrid pickup on May 14.
What To Do Now
The Nasdaq’s recent pause has allowed stocks like Nvidia to work on possible bases or handles, while fast-rising stocks quickly gain relative strength.
That’s also giving investors more time to update their watchlists, but don’t dillydally. Leading stocks continue to flash buy signals. You can add exposure gradually as the market rally continues to act well.
Remember, if those positions falter, or if the major indexes break below their 50-day lines, you’ll want scale back again. So have your exit plans ready.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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