Finance
Dow Jones Futures Fall; Nvidia earns next ‘Wildcard’ after Powell says ‘time’ for interest rate cuts
Dow Jones futures fell slightly on Sunday evening, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDAEarnings take center stage after Federal Reserve Chairman Jerome Powell said in Jackson Hole that “the time has come” for Fed rate cuts.
↑
X
Nvidia’s profits are an important test for the stock market rally. Here’s what to expect.
The stock market rally had another solid week, thanks largely or entirely to Friday’s Jackson Hole-related gains. The S&P 500 is near record highs, while the other indexes are making progress. Many leading stocks are breaking out or emerging.
Investors should be looking for more exposure, but Nvidia’s earnings are expected Wednesday evening. Strong Nvidia results and guidance will be critical for AI games near buy points like Broadcom (AVGO), Nvidia chipmaker Taiwanese semiconductor manufacturing (TSM) And Arista Networks (ANET).
In the meantime, Birkenstock (BIRK), Abercrombie & Fitch (ANF), PDD companies (PDD), Ollie’s Bargain Shop (OLLI), Salesforce (CRM) and the save is played NetApp (NTAP), Pure storage (PSTG) And Nutanix (NTNX) are all reporting earnings this week.
Pinduoduo and Temu parents PDD report open before Monday. PDD shares are set up on a cup-and-handle basis.
Nvidia stock is on Leader board. Broadcom shares are listed on SwingTrader. Nvidia and PDD stocks are on the list IBD50. Arista’s stock is on the ropes IBD Bigcap 20. Broadcom was the IBD stock of the day on Thursday.
Dow Jones futures today
Dow Jones futures fell 0.1% from fair value. S&P 500 futures fell 0.15% and Nasdaq 100 futures lost 0.15%.
The yield on ten-year government bonds fell to 3.78%.
Crude oil futures rose slightly.
Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock market rally
The stock market rally ended the week, after a few days’ lull, with a strong Friday following Powell’s measured speech in Jackson Hole.
As expected, Fed chief Jerome Powell confirmed that rate cuts are coming: “The time has come for policy adjustment.” Powell did not reverse market expectations for a 100 basis point cut this year.
The Dow Jones Industrial Average rose 1.3% in stock market trading last week. The S&P 500 index fell 1.45%. The Nasdaq index rose 1.4%. The small-cap Russell 2000 rose 3.6%.
Friday was another follow-up day for all major indexes, although the S&P 500 and Nasdaq had inside days.
The Nasdaq is in a mini-pause and is just below 18,000 points, but will regain the 50-day line on Friday.
The Invesco S&P 500 Equal Weight ETF (RSP) hit a record on Friday and rose 2.1% this week.
The stock market has spent the past week digesting recent gains and making further progress even after Thursday’s tech-driven sell-off. Leading stocks broke out or manufactured fewer V-shaped bases and forged handles.
The two main drivers of the stock market this year have been the continued AI boom and hopes for Fed rate cuts. Fed chief Powell’s speech in Jackson Hole confirming interest rate cuts suggests a favorable backdrop on that front. Will Nvidia’s earnings signal the same on AI?
U.S. crude futures fell 0.9% to $74.83 a barrel, but remained well off midweek lows.
Ten-year Treasury yields fell nine basis points to 3.81%, hitting a 52-week low on Wednesday. Two-year Treasury yields, which were more closely tied to the Fed’s interest rate policy, fell 15 basis points to 3.91%.
ETFs
Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) rose 2.9% last week. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1%. The VanEck Vectors Semiconductor ETF (SMH) rose by 0.7%. Nvidia stock is SMH’s dominant holding, with Taiwan Semiconductor and Broadcom also as key members.
SPDR S&P Metals & Mining ETF (XME) rose 2.1% last week. The SPDR S&P Homebuilders ETF (XHB) rose by 8.2%. The Energy Select SPDR ETF (XLE) fell by 0.15 and the Health Care Select Sector SPDR Fund (XLV) rose by 1.7%.
The Industrial Select Sector SPDR fund (XLI) advanced 1.7%. The Financial Select SPDR ETF (XLF) rose by 1.5%.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 4.85% last week and ARK Genomics ETF (ARKG) rose by 3.6%.
Time the market with IBD’s ETF market strategy
Nvidia earnings ‘Wildcard’
The AI chip giant reported this on Wednesday evening. Nvidia’s profits are expected to rise 141% from a year earlier, with revenue up 113% to $28.73 billion. That would be the fifth consecutive quarter of triple-digit gains for both.
Nvidia’s earnings are “the most important” event for the tech sector in years, Wedbush analyst Dan Ives wrote in an investor note.
Rosenblatt Securities analyst Hans Mosesmann expects another beat-and-raise Nvidia earnings report. But he says the “wild card” is whether the company has enough current-generation Hopper AI processors to meet demand.
Analysts want confirmation and details on delays to Nvidia’s next-generation Blackwell processors. Are customers also waiting for the next generation AI chip, or are they buying more of the current Hopper line?
Nvidia stock
Nvidia shares rose 3.8% to 129.37 last week, thanks to Friday’s 4.55% gain. Shares are trading in a short-term range after a big run from the August 5 low of 90.69. NVDA stock has a cup-base buy point of 140.76. Investors could use last week’s highs as a pseudo-handle entry, ideally following Nvidia’s gains.
Taiwanese semiconductor stock
Shares of Taiwan Semiconductor fell 1.9% this week to 171.26, although shares rose 2.9% on Friday to just regain the 50-day mark. TSM stock has a cup-base buy point of 193.47, but is on track to have a handle after Monday with an entry of 175.45. On the weekly chart, Taiwan Semi stock already has a cup-with-handle basis with that 175.45 buy point.
Taiwan Semiconductor makes chips for Nvidia, Broadcom and many others.
Broadcom stock
Shares of Broadcom rose 0.4% to 166.36, staying above the 50-day high. AVGO stock would be useful above the August 20 high of 168.37.
The chip and software giant has a buy point of 185.16, according to MarketSurge. Investors could view this as a lopsided double bottom base with an entry at 177.10. After Nvidia’s earnings, Broadcom will have its own results on September 5.
Arista Stock
Arista shares were up 0.3% last week at 355.06. The stock now has a buy point of 358.68. Nvidia is a growing rival in AI networking, while Arista uses many Broadcom products, so the chip giants’ earnings reports will be important for ANET stock.
Nvidia and Arista Networks are going head to head with AI networks
What to do now
The market rally continues to make progress, with at least some quality stocks showing buy signals every day.
Investors could have added even more exposure on Friday, when Powell supported rate cuts on Jackson Hole. Continue to do this if the market continues to function well.
Several AI stocks are being created, including Nvidia, Broadcom and Taiwan Semi. Investors may want to be a bit cautious about adding further AI exposure ahead of Nvidia gains.
However, they should definitely be on your radar, along with dozens of other promising or leading stocks.
Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.
Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.
You might also like:
Why this IBD tool simplifies the search for top stocks
Best growth stocks to buy and watch
IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today
Improve your stock market investing skills with IBD Meetup groups
Meta leads 5 stocks near buy points as the market rises
