Dow Jones futures edged lower early Friday, but S&P 500 futures and Nasdaq futures rose as Nvidia and AI stocks tried to rebound.
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The stock market rally was decidedly mixed Monday, with breadth strong even as the Nasdaq slumped amid the ongoing rotation away from AI plays.
Nvidia (NVDA) fell sharply again Monday, undercutting key support. Arm Holdings (ARM), Taiwan Semiconductor (TSM) and Broadcom (AVGO) also kept retreating, along with Super Micro Computer (SMCI) and Dell Technologies (DELL).
But Nvidia and other AI hardware plays rose earlyTuesdasy.
Bitcoin tumbled Monday, hitting crypto stocks such as Coinbase (COIN) and Robinhood Markets (HOOD). But Bitcoin was recouping some losses Tuesday.
Warren Buffett’s Berkshire Hathaway (BRKB) flashed a buy signal Monday along with Flowserve (FLS) and Weatherford International (WFRD).
Facebook-parent Meta Platforms (META) flirted with being actionable on reports that Apple (AAPL) has held talks with the Facebook parent about integrating Meta’s generative artificial intelligence model into its AI plans. Apple stock rose modestly Monday.
Nvidia stock and Taiwan Semiconductor are on IBD Leaderboard, with Meta on the Leaderboard watchlist. Meta, Berkshire Hathaway and Apple stock are on SwingTrader. Nvidia stock and Arm stock are on the IBD 50. Broadcom stock, Super Micro and Nvidia are on the IBD Big Cap 20. Meta Platforms was Monday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures lost a fraction vs. fair value, in part due to Boeing. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.45%.
Crude oil futures fell slightly.
The 10-year Treasury yield edged down to 4.23%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Dow giant Boeing (BA) has offered to acquire key supplier Spirit AeroSystems (SPR) for about $35 a share, mostly in stock, The Wall Street Journal reported Monday night, citing sources. That’s a 6% premium to Spirit Aero’s Monday close and a 22% premium to the Feb. 29 close, just before Boeing’s takeover talks became known. Boeing stock fell 1% and Spirit Aero sank 3%.
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Stock Market Rally
The stock market rally showed decidedly mixed action amid sector rotation.
The Dow Jones Industrial Average rose 0.7% in Monday’s stock market trading. The S&P 500 index fell 0.3%, with Super Micro stock and Nvidia among the biggest losers. The Nasdaq composite slumped 1.1%.
Market breadth was positive, by 4-to-3 on the Nasdaq and more than 2-to-1 on the NYSE.
The small-cap Russell 2000 climbed 0.4%, though it came off session highs to settle below the 50-day line. The S&P MidCap 400 advanced 0.6%, managing to close above its 50-day.
The Invesco S&P 500 Equal Weight ETF (RSP) edged up 0.1%, hitting a one-month high intraday.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.4%, but is still right around record highs. The Nasdaq 100 slumped 1.15%
Stepping back, the overall market action hasn’t been too bad over the past week.
The Nasdaq is giving up ground, only to the 10-day moving average, despite big recent losses in superheated Nvidia and AI plays. The tech-heavy index is still slightly extended vs. the 50-day line, at 5.4%, but significantly less than just a week earlier.
Meanwhile, other parts of the market are showing strength including the Dow Jones, small caps and a variety of sectors. A number of stocks are flashing buy signals.
U.S. crude oil prices rose 1.1% to $81.63 a barrel.
The 10-year Treasury yield fell 1 basis point to 4.25%.
Bitcoin Slides
Bitcoin dived 7.7% to $59,191.39 as of 4 p.m. ET vs. Friday’s $64,173.16, hitting the lowest levels since early May. The pioneer cryptocurrency hit a record $73,462.59 on March 13.
COIN stock tumbled 6% to 212.31 after undercutting its 50-day line Friday in a 7.6% weekly slide. Robinhood stock fell 4.1% to 21.37, below the 21-day line Friday’s low. The free trading app, which has significant crypto exposure, is back into a prior buy zone.
Bitcoin moved back above $61,000 early Tuesday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1%. The iShares Expanded Tech-Software Sector ETF (IGV) lost 1%. The VanEck Vectors Semiconductor ETF (SMH) slumped 3.4%. Nvidia stock is the No. 1 holding in SMH, with Taiwan Semiconductor and Broadcom also major components.
SPDR S&P Metals & Mining ETF (XME) dipped 0.1%. SPDR S&P Homebuilders ETF (XHB) climbed 1.1%. The Energy Select SPDR ETF (XLE) popped 2.5% and the Health Care Select Sector SPDR Fund (XLV) gained 0.6%.
The Industrial Select Sector SPDR Fund (XLI) advanced 0.4%. The Financial Select SPDR ETF (XLF) rallied 1%, with Warren Buffett’s Berkshire stock the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dipped 0.2% and ARK Genomics ETF (ARKG) rose 0.9%. Coinbase and Robinhood stock are major holdings at Ark Invest.
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Stock Market Today: Nvidia Extends Losses
Nvidia stock tumbled 6.7% to 118.11 on Monday, falling below its 21-day exponential moving average. The AI chip leader is down 16.1% from Thursday’s intraday all-time high of 140.76.
NVDA stock is now 16.3% above its 50-day line. That’s after briefly topping 40% at Thursday’s peak, approaching extreme levels.
Nvidia stock fell below a $3 trillion market cap, dropping to $2.91 trillion as of Monday’s close.
NVDA stock rose 3% early Tuesday, signaling a move back above its 21-day line..
Other AI Stocks
Broadcom stock sank 3.7% on Monday to 1,592.21, giving up more than half of its recent post-earnings surge.
ARM stock skidded 5.8% to 151.07, a third straight loss after doubling in two months to a record 177.31 on June 18. The U.K. wireless chip design giant is below a 164 buy point but the 21-day line is closing the gap.
Taiwan Semiconductor stock retreated 3.5% to 167.81. TSM stock hit a record 184.86 on June 18.
Super Micro stock sold off 8.65% on Monday to 826.98 after the AI server maker briefly topped the 1,000 level last Thursday. SMCI stock moved back below its 50-day line.
Dell stock fell 5.2% on Monday to 137.56, its third straight decline after leaping to 161.52 intraday Thursday. Shares of the server, storage and PC maker are still above the 50-day line.
All of these stocks rose slightly early Tuesday.
Stocks Flashing Buy Signals
Berkshire stock climbed 1.1% on Monday to 413.98, decisively clearing the 50-day line and breaking a trendline going back to the start of the four-month base. That offered an early entry, with a short-term high of 417.33 another possible trigger. BRKB stock has a 430 buy point.
Flowserve stock rose 1.6% to 48.61 rebounding above the 50-day line and breaking a trendline in a flat base. The official buy point is 50.49, according to MarketSurge.
Weatherford stock popped 3.6% to 120.26, back above the 50-day in heavy volume. The oil machinery play is benefiting from rebounding energy prices after tumbling in May with crude futures. WFRD stock has a 129.70 consolidation buy point.
Apple-Meta AI Talks
Meta has held in talks with Apple to add its generative AI model to Apple’s AI Intelligence, The Wall Street Journal reported Sunday. The iPhone giant named OpenAI, backed by Microsoft (MSFT), as its first Intelligence partner at its Worldwide Developers Conference earlier this month.
Meta stock hit 507.80 intraday Monday, breaking the downtrend of a handle, but closed up just 0.8% to 498.01. The Facebook and Instagram parent has a 514.01 cup-with-handle buy point.
Apple stock edged up 0.3% to 208.31, paring intraday gains but snapping a three-session slide.
Bloomberg reported Tuesday that Apple ended Meta AI talks months ago. That didn’t seem to have much impact on the stocks.
What To Do Now
The stock market rally in some ways is in a better place than it was a week ago, looking more balanced.
For those with heavy exposure in Nvidia and AI hardware plays, it’s been a tough few days. If you haven’t already, you should consider whether to rotate with the market or stick with long-term winners.
Meanwhile, investors could be adding exposure to financials, industrials as well as some energy plays, along with other resilient or rebounding sectors such as discount retail and a variety of medical plays.
So cast a wide net when looking for setups.
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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