Dow Jones futures rose early Friday, along with S&P 500 and Nasdaq futures.
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Nasdaq Snaps Seven-Seven-Seak Win Streak; Kanzhun, Chubb, PLTR In Focus
Stock market gains had a mixed day Thursday as the S&P 500 briefly crossed 5,500 for the first time, but most stocks retreated.
Nvidia (NVDA) turned lower after flirting with extreme technical levels. Fellow AI Chip Leaders Broadcom (AVGO), Micron Technology (MU), Taiwan Semiconductor (TSM) and Arm Holdings ( ARM ) fell after recent big gains. HE stuck Advanced Micro Devices (AMD) made a strong move on Thursday.
AI server creators Super Micro Computer (SMCI) and Dell Technologies ( DELL ) initially jumped on a comment from Elon Musk, but erased earnings.
Meta Platforms (META) now has a handle, offering a lower buy point.
Meanwhile, Chipotle Mexican Grill (CMG) reverted to a brief consolidation.
Shares of Nvidia and Taiwan Semiconductor are on IBD’s leaderboard. Meta Stock is on SwingTrader. Shares of Nvidia are in the IBD 50. Shares of Broadcom, Nvidia and Super Micro are in the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were about 0.1% above fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.2%.
The 10-year Treasury yield rose to 4.26%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Rally Marketing
The stock market rally got off to a strong start on Thursday with the S&P 500 and Nasdaq briefly hitting all-time highs, but they fell again as Nvidia rallied. But the Dow had a solid session.
The Dow Jones Industrial Average rose 0.8% in Thursday trading, rebounding from the 50-day line and clearing the highs of recent weeks. The S&P 500 index fell 0.25%. The Nasdaq composite slipped 0.8%.
The small-cap Russell 2000 fell 0.4% after again hitting resistance at the 50-day line.
The Nasdaq is 7.1% above its 50-day line, up from 8.2% on Tuesday, but still somewhat extended. Much of this reflects massive moves at AI giants, particularly Nvidia. Ideally, the Nasdaq would move sideways or pull back modestly for a few days or a few weeks. This would allow the 50-day line to reach, while major stocks create new buying opportunities.
U.S. crude oil prices rose 0.7% to $82.17 a barrel, bringing the weekly gain to 4.7%.
The yield on the 10-year Treasury rose 4 basis points to 4.25%, despite weaker-than-expected economic data. The 10-year yield is still near the lowest levels since late March.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) gave up 2.6%. The iShares Expanded Tech-Software ETF ( IGV ) fell 0.1%. The VanEck Vectors Semiconductor ETF ( SMH ) fell 2.8%. Nvidia stock is the dominant holding in SMH, with notable holdings in Taiwan Semi, Broadcom and AMD as well.
ARK Innovation ETF ( ARKK ) fell 0.7% and ARK Genomics ETF ( ARKG ) fell 0.9%
The SPDR S&P Homebuilders ETF ( XHB ) retreated 1.4%. The Energy Select SPDR ETF ( XLE ) rose 1.8% and the Health Care Select Sector Fund SPDR ( XLV ) advanced 0.3%.
The Select Industrial Sector SPDR Fund ( XLI ) was up a fraction. Financial Choice SPDR ETF (XLF) gained 0.5%.
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Nvidia Stock: Time to Take Profits?
Nvidia shares fell 3.5% to 130.78 after hitting an intraday high of 140.76. The AI chip leader ended 30.5% above its 50-day line after briefly crossing 40% intraday.
On March 7, Nvidia shares closed 41.9% above the 50-day, the most since June 2003. Shares rose the next morning, but turned ugly, ending up 5.55%. NVDA stock eventually corrected 22%, capped by a big 10% loss on April 19, dipping below the 50-day line. This loss was caused by AI concerns regarding Super Micro.
Investors must decide whether to take some profits in Nvidia. This may depend on the style of trader you are, your conviction in Nvidia, and the size of your exposure to NVDA stock and AI in general.
Other AI chips play today in the stock market
ARM shares fell 7.7% to 160.77 again below the official 164 buy point after doubling in the previous months. The wireless chip design giant offered an early entry in late May after rallying above its 50-day and breaking a trend line. Investors can wait to see if ARM shares can stop around the buy point, allowing the moving averages to close the gap.
Broadcom shares were down 3.8% at 1,734.57 after Tuesday’s modest reversal halted a post-earnings rally.
Shares of Taiwan Semiconductor fell 2.4% to 175.38, a day after chip maker Nvidia hit a record high.
Micron stock fell 6% to 144.19, a day after hitting a record high. Micron reports earnings on June 26.
On the upside, AMD stock jumped 4.6% to 161.78, recovering above the 50-day and 21-day lines but off session highs of 166.82. After returning lower on March 8 Nvidia’s side change, AMD pulled back sharply. While AMD stock has rebounded since early May, it’s far from the highs.
Dell, Super Micro Ease Elon Musk wins
Elon Musk, in a Wednesday post on X, said Dell and Super Micro will assemble server racks for a supercomputer for his xAI launch.
Shares of Super Micro jumped to 1,014.02 on Thursday morning but reversed to fall 0.3% to 917.63. Shares of the AI server maker and Nvidia partner cleared a downtrend earlier in the week. SMCI stock is starting to build the right side of a deep base with a 1,229 buy point.
Shares of Dell Technologies fell 0.4% to 148.52, coming back from a high of 161.52. The computer, storage and server giant sank on May 31 after earnings, but found support in the 50 days. Dell shares are not offering entry at this time.
Meta Stock has a new buy point
Meta stock rose 0.4% to 501.70. As of Thursday’s close, the parent of Facebook and Instagram has an official handle. This gives Meta stock a buy point of 514.01 cup handle.
On Thursday, KeyBanc raised its price target on Meta Platforms to $540 from $475, citing a “significant increase” in ad prices.
Chipotle Stock Retreats
Chipotle shares fell 6.2% to 3,214.42, erasing more than half of the gain from a six-day winning streak. Shares fell back below the top of a brief consolidation. It is finding support at the 21-day moving average.
A number of other major restaurant stocks retreated, albeit with more modest losses.
What should you do now?
The rising stock market is still doing well, although many leaders retreated on Thursday, with some recent acquisitions such as Chipotle struggling.
Selling winning stocks like Nvidia is as much an art as a science, with no single right answer — and it doesn’t have to be all or nothing.
But ultimately, the winners will sell, whether it’s after a few days or many years. So you have the profit selling rules of stocks that fit your trading style and be sure to follow them.
Investors should still have significant exposure. You can also look for new buys, albeit with a higher bar to pull the trigger and possibly take smaller initial positions.
Read the Big Picture daily to stay in sync with market direction and key 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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