Dow Jones Futures: Stock Market Breaks Expectations as Iran Fears Mount; What are you doing now

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures.

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The stock market rally sent mixed messages during the week, but ended on a bearish note. The Nasdaq hit a record closing high on Thursday Nvidia (NVDA) Shares of Megacap and another AI company rebounded. But the S&P 500, Dow Jones and Russell 2000 suffered from hot inflation and tensions in the Middle East, with the Dow Jones and small-cap Russell 2000 all below their 50-day limits. The Nasdaq just posted weekly gains

the CBOE Volatility IndexThe market's fear index rose on Friday to its highest levels since late October amid fears that Iran will directly attack Israel, raising the possibility of a much larger conflict in the Middle East. disappointing C. B. Morgan Chase (JBM) Guidance is great Arista Networks (network) Sales operations and problems in China Intel Corporation (you are K) And Advanced micro devices (AMD) also had an impact.

All of this has led to a shift in risk aversion, especially as the weekend approaches.

Investors need to recognize Friday's market expectations and respond accordingly.

late on friday, Tesla (TSLA) Reduced the price of Full Self-Driving subscriptions to $99 per month from $199. Stocks rose.

Salesforce.com (Customer relationship management) is in late-stage talks to buy a data management software maker Informatica (INFA), the Wall Street Journal reported Friday night.

Nvidia tops 5 stocks near buy points

Next major earnings

Goldman Sachs (A) And Charles Schwab (SCHW) report early Monday. Goldman Sachs stock fell below its 50-day line on Friday, while Schwab stock remained in a buy zone.

Chip equipment giant ASML (ASML) and chip maker Nvidia Taiwan Semiconductor Co., Ltd (TSM) may be the two most important gains next week. Their findings and guidance will have major implications for the chip industry, including Nvidia, Broadcom (Afgo), L Research (LRCX), Applied materials (deaden) And Kosovo Liberation Army Company (KLAC).

All of these chip stocks have new rules or potential entries.

Nvidia stock is on IBD LeaderboardAnd SwingTrader Bahraini dinar 50. KLA stock is on the IBD Long-Term Leaders list. Nvidia, ASML, and Broadcom stocks are in the market IBD Big Cap 20.

Dow jones futures today

Dow Jones futures open at 6pm EST on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember, an overnight move in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze leading stocks and the market on IBD Live

Stock market pool

The stock market rally had a tough week due to a hot CPI inflation report and concerns in the Middle East, with Friday's losses erasing the bullish signs seen on Thursday.

The Nasdaq, which posted a record close on Thursday, fell 1.6% in stock market trading on Friday to end the week with a 0.45% loss. The index ended below the 21-day line but just above the 50-day and 10-week lines. It is also still trading with the big reversal day on April 4th.

The rest of the market looked worse.

The S&P 500 fell 1.55% for the week, below its 21-day level. The main index closed just above the 50-day line but below the 10-week line.

The Dow Jones Industrial Average fell 2.4% to its lowest level since late January, while the Russell 2000 small-cap index fell 2.9% to its lowest level since late February. Obviously both are less than 50 days.

Invesco S&P 500 Equal Weight Fund (RSP) fell 2.6%, breaking the 50-day line on Friday. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEWIt fell 1.7%, below the 50-day line to its worst levels since late February.

The price of crude oil fell 1.4% to $85.66 per barrel during the week, down from Friday's high of $87.67. Gold rose 1.3% to $2,356.20 an ounce, which is also far from its highest levels on Friday.

The 10-year Treasury yield jumped 12 basis points to 4.5%, with Thursday's peak of 4.59%, the highest level in five months. Investors see only a modest chance of a rate cut by the Fed in June and are only leaning toward a move in July.

The fear gauge in the stock market is rising

The CBOE Volatility Index rose 16.1% to 17.31 on Friday, reaching a session high of 19.20 since late October. Excessive fear can herald at least a short-term bottom. But the market's fear gauge is still far from the October highs, let alone the Covid highs.

Another measure of sentiment, esp Read Bulls vs Bearswas near excessively bullish levels heading into last week.

If tensions in the Middle East subside, there could be a rapid rally in stocks. But a direct conflict between Iran and Israel could lead to a significant rise in fears and a significant decline in stocks.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) Declined 1.7% during the week. VanEck Vectors Semiconductor ETF (Trait) decreased by 0.9%. Nvidia and Taiwan Semiconductor are SMH's largest holdings, with shares of ASML, Lam Research, KLA and AMAT as well.

SPDR S&P Metals and Mining Fund (XME) fell 1% last week. Global X US Infrastructure Development Foundation (ETF)cradle) decreased by 3.4%. US Global Jets ETF (Planes) decreased by 2.6%. SPDR S&P Homebuilders ETF (XHB) step down 4%. Energy Select SPDR ETF (XLE(Down by 2% and the Healthcare Sector SPDR Fund)Forty-fifth) lost 3%. Selected Industrial Sector SPDR Fund (forty-first) Waiver of 2.2%.

Financial Select SPDR ETF (XLF) fell 3.6%, with JPMorgan being a major component. SPDR S&P Regional Banking Fund (Cree) decreased by 3.5%.

Reflecting more speculative stocks, the ARK Innovation ETF (Ark) fell 1.25% last week and the ARK Genomics ETF (Arkj) decreased by 3%.

Time the market with IBD's ETF market strategy

ASML, Taiwan half of profits

Dutch chip equipment giant ASML will announce its business on Wednesday morning, and Taiwanese chipmaking giant ASML is scheduled to announce its business early Thursday.

Analysts expect ASML's profits to decline in the first quarter, but expect a rebound in the second half. Earnings are expected to be nearly flat in Taiwan, although unofficial targets may be higher after the foundry giant reported better-than-expected first-quarter sales on April 10.

Taiwan Semi is benefiting from strong demand for artificial intelligence and other advanced chips. TSMC's guidance on earnings and capital spending will be key to the industry.

ASML stock fell 1.8% to 961.84 last week, closing near its 50-day and 10-week lines. It now has a flat base with a buy point of 1,056.34. Investors can use the trendline entry level around 1,000 to initiate a 10-week outside position, or the April 1 high of 1,002.66.

TSM stock rose 0.85% to 142.56 during the week. The stocks have been consolidating for a few weeks, but need another week to get a proper base. Investors can use the April 10 high of 148.43 as input if Taiwanese semi stocks rise on earnings.

Chip stocks

Nvidia stock rose 0.2% to 881.86 during the week. Stocks rebounded from their 10-week line on Wednesday and Thursday before paring their gains on Friday, still holding at 21 days. NVDA stock now has a flat base at 974 buy points. At this point, investors can use Thursday's high of 907.39 as an early entry point.

Broadcom stock rose 0.35% to 1,344.07 during the week, finding support at the 21-day and 10-week lines amid continued tight closings but hitting resistance near the 1,400 level. AVGO stock is now seeing a consolidation, with its high on April 4 at 1,403.98. Serves as a purchasing point.

Lam Research stock fell 1.2% to 957.04 during the week, finding support at the 10-week line. The stock has a 1,007.39 buy point with a flat base, according to Marketsorg. Lam has her own dividend due on April 24.

Applied Materials stock was unchanged at 207.86 on the week, trading tightly around its 21-day line. Investors can treat the recent consolidation as a de facto firm base with a buy point of 214.91. The three-week narrow pattern gives a slightly lower entry at 213.33 based on the high recorded on April 11.

KLAC stock fell 0.3% to 680.78, near its 50-day and 10-week lines. KLA has a flat-based buy point of 729.15. A decisive move from the 50-day line can provide an early entry. KLA's dividend is due on April 25.

What are you doing now

After Thursday's strong move, expectations were that the market would continue to rise, especially the Nasdaq and leaders like Nvidia.

Instead there was a big pullback on Friday. The direct conflict between Iran and Israel is a trump card, while JPMorgan and Arista have not helped. While Treasury yields fell on Friday, the weekly rise — and push back on Federal Reserve interest rate cuts — represents a broader headwind.

But whatever the reason, this is still a sideways market for the Nasdaq, and it is difficult to navigate. For the Dow Jones and Russell 2000 — and perhaps the S&P 500 — it looks more and more like a pullback or an emerging correction.

Investors should reevaluate after Friday and last week. If you take new positions on Wednesday and Thursday, you may need to reduce them or exit them completely.

It's still a good time to work on your watch lists. If the war drums die down and the upcoming earnings feedback is positive, you'll need to be ready. But you also have to be prepared to expand more aggressively.

As earnings season begins, know when your holdings will report. You also need to know when your property's main competitors, customers and suppliers are within reach.

Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.

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