Dow Jones Futures: Inflation Reports Loom; Taiwan Semiconductor leads 5 stocks near buy points

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. Inflation data will be crucial in the coming week.

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The stock market rally had a solid week, with the major indexes heading for record highs or 52-week highs.

Nvidia (NVDA) chip maker Taiwanese semiconductor (TSM) broke out Friday on strong April sales, fueled by demand for AI chips. Nvidia stock is about to find a handle. Broadcom (AVGO), another Taiwan Semi customer, is right to enter aggressively.

In the meantime, JPMorgan Chase (JPM) and construction aggregates gigantic Martijn Marietta (MLM) early registrations cleared.

On the other hand, Tesla (TSLA) fell back below key supports as it managed to avoid its April 29 gap-up.

Walmart (WMT) And Applied materials (AMAT) are notable earnings reports this week, along with Asian e-commerce giants such as Sea (LIKE THIS) And Alibaba.com (BABA).

Inflation reports

But investors’ attention will be focused on the big inflation reports. The producer price index follows on Tuesday, the consumer price index on Wednesday. The PPI report is important because key components contribute directly to the main PCE price index, the Fed’s preferred inflation gauge.

Inflation rates have held steady or even increased in recent months, prompting the Fed to lower expectations for rate cuts. Friday’s University of Michigan consumer confidence index showed inflation expectations were picking up.

Nvidia, Martin Marietta and Taiwan Semiconductor shares rose IBD rankings. Nvidia and JPMorgan shares are listed on SwingTrader and the IBD50. Taiwan Semiconductor was the IBD stock of the day on Friday.

Dow Jones futures today

Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.

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Stock market rally

The stock market rally started the week strong, with the Dow Jones, S&P 500 and Russell 2000 regaining their 50-day moving averages on Monday. The Dow Jones and S&P 500 continued to move toward record highs for the rest of the week, while the Nasdaq and Russell took a break.

The Dow Jones Industrial Average rose 2.2% in last week’s stock market trading, extending its winning streak to eight trading sessions. The S&P 500 index fell 1.85%. The Nasdaq composite rose 1.1%. The small-cap Russell 2000 rose 1.2%

The advance of the market rally was broad. Leading stocks come from different sectors.

Ten-year government bond yields rose slightly to 4.5% after hitting a one-month low of 4.42% on Tuesday.

U.S. crude futures rose 0.2% to $78.26 a barrel last week.

ETFs

Of the growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.7% in last week’s trading. The VanEck Vectors Semiconductor ETF (SMH) rose by 2.6%. Nvidia and Taiwan Semiconductor are the two largest holdings in SMH, with AVGO stock and Applied Materials also being key holdings.

SPDR S&P Metals & Mining ETF (XME) advanced 1.25% last week. The Global X US Infrastructure Development ETF (PAVE) rose 2.85%, with Martin Marietta shares a major component. US Global Jets ETF (JETS) rose by 0.8%. SPDR S&P Home Builders ETF (XHB) rose 2.2%, with PulteGroup shares taking a significant position. The Energy Select SPDR ETF (XLE) gained 1.3% and the Health Care Select Sector SPDR Fund (XLV) rose almost 2%. The Industrial Select Sector SPDR fund (XLI) rose by 2.4%.

The Financial Select SPDR ETF (XLF) rose 3.2%, with JPMorgan as a key component.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 5.6% last week and ARK Genomics ETF (ARKG) fell by 0.5%. Tesla stock is the #1 stock in Ark Invest’s ETFs.

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Taiwanese semiconductor stocks are breaking out

TSM shares rose 4.5% to 149.26 on Friday, hitting a double-bottom buy point of 148.43. Shares rose 5.4% this week.

Before Friday’s opening, Taiwan Semiconductor reported April sales rose 59.6% from a year earlier in local currency. AI and other advanced chips are leading the way for Taiwan Semi.

Nvidia stock

Nvidia shares rose 1.2% this week to 898.78, pausing after Monday’s 3.8% gain capped a three-session peak of 11%. The AI ​​chip leader has a consolidation buy point of 974, according to Market wave. NVDA stock is on track to gain traction after Monday. That would offer a lower buy point of 922.20.

Nvidia’s earnings will be released on May 22.

Broadcom stock

Shares of Broadcom rose 4.3% last week to 1,332.82. On Friday, shares recovered above the 50-day line and flirted with an aggressive entry around 1,355. AVGO stock has a consolidation buy point of 1,438.17. Investors could use 1,403.98 as an early entry.

JPMorgan stock

JPMorgan shares rose 4.3% this week to 198.75, almost a buy point from a flat base level of 200.94. On Wednesday, shares rebounded from the 50-day mark, breaking a trendline and hitting near-term highs. JPM shares are still usable from that date.

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Martin Marietta Stock

Shares of Martin Marietta rose 1.2% to 610.43 on Friday, decisively breaking the 50-day mark, breaking a trendline and hitting near-term highs, all of which offered early entry. MLM stock has a new flat base with a buy point of 626.67.

Martin Marietta is benefiting from a US infrastructure boom, with earnings growth increasing.

Tesla shares

Shares of Tesla fell 7% to 168.47 last week, falling back below the 50-day line. Shares have now spiked 15% on April 29, after Tesla cleared major hurdles in introducing full self-driving in China.

Investors are concerned about Tesla’s growth prospects, with demand falling despite a series of price cuts since late 2022. Its vehicle supply is aging and has a limited pipeline as rivals build up strength, especially in China.

On Friday evening, Tesla offered 0.99% financing on sales of the American Model Y, a quiet incentive to boost sales.

What to do now

A number of stocks have given buy signals in the past week. Investors can continue to increase their exposure if the market rally continues to work well. But do this gradually.

This week’s inflation reports could push the major indexes to record highs or push them back toward the 50-day index.

Build your watchlists. It’s a broad-based rally, which means you should pay attention to top stocks from a wide variety of sectors.

Check your belongings. Are there any laggards to cut, or leaders to offer additional entries?

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.

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Nvidia leads five stocks near buy points