Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. From the Federal Reserve meeting and AI events Nvidia (NVDA) and Microsoft (MSFT) headlines the coming week
x
The stock market had a mixed week. The Dow Jones and S&P 500 were little changed, while the Nasdaq and small-cap Russell 200 retreated below their 21-day lines. Software stocks, which looked promising earlier in the week. Oracle (ORCL) earnings, sold on Friday. Adobe (ADBE) guidance.
All three major events are on tap for the coming week. The Federal Reserve will meet Tuesday through Wednesday, with policymakers giving their latest estimates for a Fed rate cut on Wednesday afternoon.
Nvidia will hold a four-day GTC conference starting Monday with a new AI chip and other AI announcements. Microsoft will hold its “New Era of Work” event on March 21, showcasing AI features and more.
The Fed rate outlook will have a big impact on financial markets, but Nvidia and Microsoft events are also key to the AI rally, especially after Adobe rocked AI software runs.
Nvidia and Microsoft are big players in artificial intelligence. Their unveilings, announcements and partnerships can have a major positive or negative impact on tech companies including, but not limited to: Advanced Micro Devices (AMD), Super Microcomputer (SMCI), Arm Holdings (ARM), Arista Networks (a trap), Service Now (now), Oracle (ORCL), Google Parent the alphabet (GOOGL) and more.
Microsoft, Oracle, Google and ServiceNow stocks offered buying opportunities during the week, but pulled back by Friday’s close. Arista Networks has a new base while ARM is working on one.
The current pullback and upcoming major events provide reasons for investors to hold off on new purchases in the very short term.
Nvidia stock, ARM and ServiceNow are on the IBD leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia, Arista Networks, ServiceNow, Microsoft and ARM stocks are on the IBD 50. Nvidia, NOW, SMCI and Arista stocks are on the IBD Big Cap 20. Arista Networks was Friday’s IBD Stock of the Day.
The video included in the article discussed weekly market action and analyzed ServiceNow, Arista Networks and East West Bancorp.
Dow Jones Futures Today
Dow Jones futures open at 6 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and markets on IBD Live.
Stock market rally
The stock market rally looked poised to set fresh record highs later Tuesday, but Friday’s losses helped the major indexes retreat for weekly losses.
The Dow Jones Industrial Average closed partially lower in last week’s stock market trading. The S&P 500 index fell 0.1 percent. The Nasdaq Composite sank 0.7 percent, falling below its 21-day moving average and the 16,000 level. The small-cap Russell 2000 sank 2.1 percent as market sentiment weakened.
The market’s rally is amid a pullback or pause that began with Nvidia’s March 8 downside.
The Nasdaq is back to where it was on February 12, while the Russell 2000 is down from its late December peak. This can lead to new bases and rapid pullbacks. But a number of breakout or buy signals have struggled or failed over the past two weeks.
The yield on the 10-year Treasury rose 21.5 basis points to 4.3 percent, headed for 2024 highs on reports of tepid inflation coming into the Fed meeting.
U.S. crude oil futures rose 3.9 percent last week to $81.04 a barrel. Copper prices rose 5.9 percent to an 11-month high on supply issues.
Time the Market with IBD’s ETF Market Strategy
ETFs
Among growth ETFs, the iShares Tech-Software Sector ETF ( IGV ) rose 1.6%, with Friday’s 2.8% gain below the 50-day line. Microsoft and ServiceNow are the two largest IGV holdings. VanEck Vectors Semiconductor ETF (SMH) fell 3.2% in a pullback to the 21-day line. Nvidia stock dominates SMH, with AMD also a top component.
The SPDR S&P Metals & Mining ETF (XME) retreated 3.5% last week but copper miners had a big week and some steel plays shined. The Global X US Infrastructure Development ETF ( PAVE ) fell 0.4 percent. The US Global Jets ETF ( JETS ) sank 2.2 percent. The SPDR S&P Homebuilders ETF ( XHB ) gained 0.4%. The Energy Select SPDR ETF ( XLE ) gained 3.8 percent and the Healthcare Select Sector SPDR Fund ( XLV ) lost 0.7 percent. The Industrial Select Sector SPDR Fund ( XLI ) fell 0.2%.
The Financial Select SPDR ETF ( XLF ) rose 0.5% to a two-year high. The SPDR S&P Regional Banking ETF ( KRE ) retreated 3.45%.
Reflecting more speculative storied stocks, the ARK Innovation ETF ( ARKK ) fell 4.1% last week and the ARK Genomics ETF ( ARKG ) fell 6.35%.
This Fed rate cut surprise could fool everyone.
FEED MEETING
The Fed will conclude its two-day policy meeting on Wednesday. Policymakers will release their own “dot plot” of Fed rate forecasts. By the end of 2023, they forecast three rate cuts. But with inflation coming in higher than expected recently, there is speculation that the central bank may signal just two Fed rate cuts.
Fed Chief Jerome Powell will further flesh out the Fed’s views on rate cuts and inflation at a post-meeting news conference.
Nvidia GTC
Nvidia CEO Jensen Huang will kick off the four-day GTC conference late Monday with a keynote address. Nvidia is expected to show off its latest AI accelerators as well as data center hardware, PC gear, software and more. Nvidia has AI partnerships with Super Micro, ServiceNow, Oracle and many others.
Nvidia stock rose 0.35% to 878.37 on the week, with some big daily swings after an ugly downward reversal from a record high on March 8.
Why AMD Doesn’t Have to Beat Nvidia to Be the Winner in AI Chips
Microsoft ‘New Era of Work’
Microsoft will discuss what’s new with Windows and Surface computers as well as AI innovations at its “New Era” event.
The Dow giant hit a record Thursday when Microsoft said it would launch Copilot for Security, a creative AI cybersecurity tool, on April 1. Shares cleared a short consolidation that was almost long enough to be a flat base. Investors can consider 420.82 as a legitimate buy point. But shares fell back on Friday on a software retreat led by Adobe. MSFT rose 2.5% for the week to 416.42.
Microsoft is at the forefront of monetizing AI tools for end users, so its success is key to the AI ecosystem. As the Adobe sell-off demonstrated, investors are looking for proof that software makers can turn AI hype into real revenue.
AI stocks near buy points
Oracle stock rose 11.7 percent last week to 125.54, after beating the software giant’s earnings views on Tuesday and pointing to a bullish outlook for AI demand. Shares then softened slightly for the rest of the week. ORCL stock has a 127.42 buy point from a nine-month base. Stocks can also form a higher handle, which allows moving averages to hold.
ServiceNow stock has a new flat base with an 815.32 buy point. Shares flashed aggressive entries after Oracle’s earnings, but sold off on Friday after Adobe’s earnings. Shares fell 1.8 percent to 743.91.
Arista stock has a flat base with a 292.66 buy point. Shares rose 1.7% last week to 277.73 after testing the 10-week line intraday on Monday.
Google stock rose 3.5 percent last week to 140.14, topping its 50-day line on Thursday before retreating on Friday. Thursday’s high will offer an initial entry of 143.59. According to MarketSurge analysis, GOOGL stock has an official 153.78 consolidation buy point. However, the RS line has lagged significantly for months amid fears that Microsoft-backed OpenAI would threaten Google’s search dominance.
ARM stock has been in a potential base for several weeks after skyrocketing on earnings in early February. Shares fell 3.4 percent last week to 126.97, finding support at the 21-day moving average. The end of the IPO lock-up period appeared to have little effect. A possible future buy point is 164, but investors may look for an aggressive entry towards the 150 level or even a downward sloping trend.
Market Rally Analysis
The market rally is getting a long break. This can be healthy, creating multiple buying opportunities and leaving little room for larger indexes to run.
But in the meantime, on the one hand, the market is very difficult for investors. A stock will flash buy signals when a market or sector is bullish, but then falter as the market returns to its midpoint. This has been especially true recently, where the indexes’ modest weekly action belies some of the larger daily swings.
The upcoming Fed meeting and Nvidia and Microsoft AI events offer even more reasons for investors to avoid new purchases in the very short term. They may try to take some profits and cut losses, but overall it’s time to hold.
Be careful about focusing too much on one particular area or theme.
This is an important time to keep your watchlist up to date. An extensive list of stocks as well as a small group of names that are viable or nearly so. While there may be some spurious breakouts in the short term, investors want to be prepared as the market makes its next move higher.
Read The Big Picture every day to stay in tune with market direction and leading stocks and sectors.
Please follow Ed Carson on threads @edcarson1971, X/Twitter. @IBD_ECarson And Bluesky at @edcarson.bsky.social for stock market updates and more.
You may also like:
Want to make quick profits and avoid big losses? Try SwingTrader.
Why the IBD Tool Makes Finding Top Stocks Easy
Best Growth Stocks to Buy and Watch
IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today.