Dow Jones Futures- Stock Market Surge: Best Week of 2024 Driven by Positive Data

Dow Jones Futures– The stock market experienced its most impressive week of 2024, buoyed by favorable inflation and economic data. Major indexes showcased their strength with significant gains, culminating in follow-through days on Tuesday and Thursday, signaling a robust rally.

Key Stock Moves: Nvidia, Meta, and Arista

Nvidia (NVDA) led the charge with a substantial price movement last week, presenting an early entry opportunity for investors. As a prominent player in the AI sector, Nvidia’s performance has been notable. Both Meta Platforms (META)and Arista Networks (ANET), other key AI stocks, have developed new bases and are nearing crucial buy points.

Tesla (TSLA) also made significant gains, recovering important levels. Despite this, Tesla’s chart exhibits some weaknesses. Notably, Nvidia is featured on the Leaderboard, with Cava also making its appearance on the Leaderboard watchlist. Cava stock is included in SwingTrader, and both Nvidia and Arista are listed on the IBD 50.

Powell’s Upcoming Speech at Jackson Hole

Federal Reserve Chair Jerome Powell is scheduled to speak at 10 a.m. ET on Friday at the Kansas City Fed’s Jackson Hole Economic Policy Symposium. His keynote address will likely address the economic outlook and future Fed actions.

Markets anticipate that Powell may signal a gradual approach to rate cuts, with a quarter-point reduction expected on September 18 and a total of 75-100 basis points for the year. However, if Powell hints that rate cuts are uncertain, it could trigger a significant market reaction.

Dow Jones Futures and Market Performance

Dow Jones futures are up 0.1% relative to fair value, while S&P 500 futures climbed 0.15% and Nasdaq 100 futuresrose 0.3%. It’s important to note that overnight futures movements do not always predict actual trading in the subsequent stock market session.

The market rally continued its recovery from the August 5 lows, with the Dow, S&P 500, and Nasdaq all recording their best weekly gains of 2024. The Dow Jones Industrial Average gained 2.9%, the S&P 500 leapt 3.9%, and the Nasdaq Composite soared 5.3%. The small-cap Russell 2000 also saw a 2.9% increase.

All major indexes are trading above their 50-day moving averages. A market pause wouldn’t be surprising after such strong gains. Technically, a pullback or pause would be normal. Additionally, markets may show hesitation ahead of Powell’s Jackson Hole speech and Nvidia’s upcoming earnings report.

A brief market pause could allow stocks to build bases and form handles, setting the stage for future gains.

Treasury Yields and Oil Prices

The 10-year Treasury yield fell by five basis points to 3.89%, while the two-year yield rose 10 basis points to 4.06%. Eased recession fears have reduced aggressive Fed rate-cut bets, but cooling inflation continues to drive down long-term Treasury yields.

U.S. crude oil futures dropped 19 cents to $76.65 a barrel last week.

Performance of Growth and Sector ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.4% last week, while the iShares Expanded Tech-Software Sector ETF (IGV) increased by 3.7%. The VanEck Vectors Semiconductor ETF (SMH) saw a notable 9.7% surge, with Nvidia stock being the top holding in this ETF.

Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) jumped 6.3%, and the ARK Genomics ETF (ARKG) rebounded 7.1%. Tesla is a significant holding across Ark Invest’s ETFs, with Meta stock being an even larger position. Cathie Wood has also accumulated a significant stake in Nvidia.

The SPDR S&P Metals & Mining ETF (XME) and the SPDR S&P Homebuilders ETF (XHB) both advanced 2%. The Energy Select SPDR ETF (XLE) gained 1.2%, while the Health Care Select Sector SPDR Fund (XLV) was up 1.9%. The Industrial Select Sector SPDR Fund (XLI) rebounded 2.2%, and the Financial Select SPDR ETF (XLF)rallied 3.2%.