Dow Jones Futures Loom As Bulls Run; Taiwan Semi Leads 5 Breakouts; Moody’s Cuts U.S. Outlook

Dow Jones futures are set to open Sunday evening, along with S&P 500 futures and Nasdaq futures. On Friday, Moody’s cut its U.S. sovereign outlook to negative. The stock market rally rebounded powerfully after Thursday’s retreat, with major indexes clearing October highs. Market breadth remains weak, but leading stocks did well, with more clearing buy points or setting up. The chip sector is emerging, with Nvidia, Broadcom, Taiwan Semiconductor, KLA, and Lam Research showing buy signals on Friday. Additionally, MercadoLibre, Roku, and Datadog are recent earnings winners that may offer buying opportunities for investors. Nvidia stock and Datadog are on IBD Leaderboard, while Nvidia, Datadog, and MELI stock are on the IBD 50. DDOG stock is on the IBD Big Cap 20.

Late Friday, Moody’s Investors Service cut its U.S. outlook to negative from stable, citing high budget deficits and political polarization. Moody’s reaffirmed, for now, its AAA rating on U.S. sovereign debt. In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects deficits to remain very large. An increasingly divided country raises the risks that future governments will not tackle long-term issues. The video embedded in this article reviewed the market action in depth.

Dow Jones futures are set to open at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures. Following the Moody’s negative U.S. outlook, ETFs indicated a 0.1% drop for the Dow Jones, S&P 500, and Nasdaq 100 Friday night. The 10-year Treasury yield climbed slightly to 4.65%.

The stock market rally snapped long winning streaks on the major indexes this past week but finished with solid gains Friday. The Dow Jones Industrial Average rose 0.65% in last week’s stock market trading. The S&P 500 index climbed 1.3%, and the Nasdaq composite jumped 2.4%. The small-cap Russell 2000 tumbled 3.15% for the week despite Friday’s 1.1% bounce. While lagging the Nasdaq 100’s big 2.9% weekly gain, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.7%, moving above its 50-day Friday. A number of big-cap techs beyond the megacaps had strong weeks.

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) leapt 4.1%, with Datadog stock in IGV. The VanEck Vectors Semiconductor ETF (SMH) jumped 5.2%. Nvidia stock rose 7.4% this past week to 483.35, clearing a 476.09 double-bottom buy point on Friday. The relative strength line hit a new high.

The stock market rally is looking healthy, rebounding quickly from Thursday’s pullback. Leading stocks are acting well and expanding. Investors can continue to gradually add exposure as long as the market and their own positions act well. Use this weekend to work on your watchlists and be ready if and when new leaders break out or clear other buy points.

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Olivia Carter

Olivia Carter revs up excitement in the world of NASCAR. As a dedicated motorsports enthusiast, she covers race results, driver profiles, and the latest developments in the NASCAR world, keeping fans on the edge of their seats.