Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) China EV rivals and Nvidia CEO Jensen Huang are in focus this weekend, with the jobs report due this coming week.
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The stock market rally suffered losses last week, with the major indexes breaking some key levels, but there was a bullish thrust into Friday’s close. Software stocks sold off hard, on weak guidance from Salesforce.com (CRM), Nutanix (NTNX) and several others. Dell Technologies (DELL) dived as well, raising more concerns about AI and tech plays beyond Nvidia stock. But leading stocks generally came under pressure.
China EV makers Nio (NIO), Li Auto (LI), XPeng (XPEV) and newly public Zeekr (ZK) should report May deliveries on Saturday, June 1. EV and battery giant BYD (BYDDF) will announce May sales on the weekend as well.
Nvidia (NVDA) CEO Jensen Huang will kick off Taiwan’s electronics showcase event, Computex 2024, with a speech on Sunday. The chief executives of AMD (AMD), Intel (INTC) and Qualcomm (QCOM) also will give keynote speeches during Computex, which will run through Friday. The CEOs of chip design giant Arm Holdings (ARM) and data center specialist Super Micro Computer (SMCI) also will present.
Artificial intelligence will be in focus, with Nvidia, AMD, Qualcomm and others touting their own AI capabilities as well as new collaborations.
Nvidia and ARM stock rose last week, but pared gains. AMD, Qualcomm and Intel reversed lower while Super Micro stock plunged. Many AI plays, including megacaps, had a rough week, so what Huang and his colleagues say could be key for the AI-led market rally.
CrowdStrike (CRWD) earnings Tuesday night also will be important for cybersecurity and the software sector in general.
Meanwhile, investors will have a busy earnings calendar, capped by the May jobs report on Friday.
Nvidia stock is on IBD Leaderboard. Nvidia and ARM stock are on the IBD 50. Nvidia and Super Micro stock are on the IBD Big Cap 20.
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.
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 started the short week in decent shape. The Nasdaq topped 17,000 for the first time on Tuesday, even as the laggard Dow Jones undercut its 50-day line. But then Salesforce, Dell and other earnings losers hit techs hard. The S&P 500 nearly tested its 10-week line Friday before rebounding higher.
The Dow Jones Industrial Average fell 1% in last week’s stock market trading, though Friday’s 1.5% bounce was its best gain of 2024. The S&P 500 index lost 0.5% and the Nasdaq composite 1.1%, both dropping below their 21-day moving averages intraday Friday before bouncing strongly at the close.
The small-cap Russell 2000 rose a fraction for the week, climbing back from Wednesday’s close below its 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) roared back Friday to reclaim its 50-day line, down just 0.1% for the week. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) tumbled 2%, finishing just below its 50-day despite a Friday bounce.
The 10-year Treasury yield rose 4 basis points to 4.51% after being up 15 basis points as of Wednesday. The 10-year Treasury yield fell 17 basis points for the month.
U.S. crude oil futures fell 0.9% to $76.99 a barrel last week, down 6% for May.
Copper futures sank 2.9%, a second straight weekly decline but still up 1% for May.
Nvidia Wants To Topple Apple. But Apple Takes Aim At Microsoft.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) plunged 5.8%, with CrowdStrike a member. The VanEck Vectors Semiconductor ETF (SMH) fell 1.55%. Nvidia stock is the No. 1 holding in SMH. AMD, Qualcomm and Intel also are in the ETF.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) tumbled 4.35% last week and ARK Genomics ETF (ARKG) lost 4.4%. Tesla stock is major holding across Ark Invest’s ETFs. Cathie Wood’s Ark also holds a small position in BYD.
SPDR S&P Metals & Mining ETF (XME) rose 1.7% last week. The Global X U.S. Infrastructure Development ETF (PAVE) gave up 1.05%. U.S. Global Jets ETF (JETS) shed 1.2%, but came well off lows. SPDR S&P Homebuilders ETF (XHB) edged up 0.1%. The Energy Select SPDR ETF (XLE) gained 2% and the Health Care Select Sector SPDR Fund (XLV) declined 0.5%.
The Industrial Select Sector SPDR Fund (XLI) sank 0.8%. The Financial Select SPDR ETF (XLF) edged up 0.1%.
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China EV Sales
China EV sales generally should show improvement in May vs. April.
Nio announced Friday that monthly sales topped 20,000, up from 15,620 in April. Li Auto also seems on track for a monthly rise, though the EV maker has slashed sales expectations from earlier this year. Geely unit Zeekr likely will top April sales, though XPeng might be a close call.
BYD should report higher EV sales as well, perhaps approaching December’s record 341,043. On Tuesday, the EV and battery giant unveiled a fifth-generation hybrid system that can go 1,300 miles or more on a single charge and tank of gas. It’s already begun deliveries of two affordable sedans that have hybrid tech, along with the all-electric Sea Lion 07, a Tesla Model Y rival.
Li Auto stock is just above a 52-week low. Nio and XPeng have rebounded over the past month, but are still down sharply in 2024. Zeekr stock is off highs, but still above its IPO price.
BYD stock has reclaimed its 50-day and 200-day lines, working on a fresh base near 2024 highs.
Tesla stock is holding its 50-day line, but is still one of the S&P 500’s worst performers this year, down 28.3%.
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What To Do Now
Despite Friday’s afternoon bounce, the stock market rally enters June in a weaker state than the broad advance for much of May. The indexes are at least testing key levels while a number of leading stocks have come under pressure or worse.
There were some big earnings winners last week, but the market is showing no mercy for companies falling short on results or guidance.
Discount retailers and various medicals are still looking healthy, though seeing defensive growth stand out isn’t a great sign for the broader market.
Investors may want to wait for more market clarity before making new buys, except perhaps as swing trades. If you didn’t cut losers this past week, take action soon.
Perhaps Nvidia will buoy the market heading into the new week, or the jobs report will offer a bullish tailwind on Friday. But they could also be negative catalysts.
So have your watchlists up to date, but also be ready to step back.
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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