Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered significant losses for a second straight week, with Federal Reserve chief Jerome Powell saying Friday that more “pain” is needed to bring down inflation.
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The major indexes sold off Friday, moving back toward 50-day moving averages. Several stocks that flashed buy signals Thursday, such as Axcelis Technologies (ACLS), tumbled back on Friday. Some, such as Steel Dynamics (STLD), did not.
Investors should be cautious about adding exposure with the market still retreating. They may need to step back if they became too exposed or bought extended stocks in recent days.
However, the current “pain” for the market rally could be setting up opportunities for big gains, though when is unclear. A number of stocks are forming handles, while others are working on bases or possibly tracking toward bullish pullbacks.
Apple (AAPL) and Arista Networks (ANET) have forged handles in the recent pullback. Apple stock and Arista are no longer quite so extended from key moving averages. Tesla stock, meanwhile, is trading tightly around some key levels.
ACLS stock and Steel Dynamics are on IBD Leaderboard. STLD stock also is on SwingTrader. ANET stock and Tesla (TSLA) are on the IBD 50 list. Arista and STLD stock are on the Big Cap 20. Arista Networks was Friday’s IBD Stock of The Day, with Apple stock and Steel Dynamics the picks for the prior two days.
Meanwhile, China stocks Pinduoduo (PDD), Baidu (BIDU), BYD (BYDDF), Nio (NIO) and Li Auto (LI) are in focus this coming week with key news on tap. U.S.-listed Chinese stocks bounced Thursday, sometimes strongly, on a report that a U.S.-China auditing deal was close. The preliminary accord, confirmed Friday, should end delisting fears.
PDD stock and Baidu in particular showed bullish action, but have earnings early this coming week. Tesla EV rivals BYD, Nio and Li Auto need some work, but are worth watching.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
ETFs trading the Dow, S&P 500 and Nasdaq 100 fell modestly Friday evening, as selling pressure continued.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally fell significantly last week with some positive action bookended by a Monday retreat and Friday’s sharp sell-off on Powell’s speech.
Powell’s short-but-not-so-sweet Jackson Hole speech on Friday stressed the 1970s lesson for policymakers not to let their guard down quickly. The Fed chief said the U.S. needs a “sustained period of below-trend growth.” That will mean some “pain” for households and businesses, he said, but the alternative is “far greater pain.”
Bottom line: The…
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