Dow Jones futures showed little movement Sunday night, with S&P 500 and Nasdaq futures similarly steady. As earnings season winds down, upcoming economic data on inflation and other factors could impact market trends.
Following the global sell-off on August 5, the stock market has been attempting a rally, but it requires confirmation through a follow-through day.
Consumer Giants’ Earnings: Potential Economic Indicators
In the current environment, earnings from major consumer companies might provide insights into the overall health of the economy.
Key AI Stocks Displaying Strength
Nvidia (NVDA) remains under pressure, yet several AI-focused stocks are performing well. Notable names include Meta Platforms (META), Palantir Technologies (PLTR), ServiceNow (NOW), Samsara (IOT), Arista Networks (ANET), and Taiwan Semiconductor (TSM).
Stocks Above Key Moving Averages
Several stocks have recently moved above their 50-day moving averages, indicating potential early buy signals. These include Eli Lilly (LLY), CAVA (CAVA), TradeDesk (TTD), On Holding (ONON), and Costco Wholesale (COST). ONON is scheduled to report earnings early Tuesday.
Musk-Trump Conversation
On August 6, former President Donald Trump announced an upcoming conversation with Tesla (TSLA) CEO Elon Musk on Musk’s X platform. Scheduled for 8 p.m. ET, the discussion is expected to cover Trump’s electric vehicle policies, including his stance on EV subsidies, and potentially touch on cryptocurrencies.
Stock Market Performance
After a rough start to the week due to yen-carry trade unwinding, Nvidia chip delays, and recession fears, the market showed resilience. The indexes began a rally attempt, though they are still testing key levels. Last week, the Dow Jones Industrial Average fell 0.6%, the S&P 500 was nearly flat, the Nasdaq dipped 0.2%, and the Russell 2000 retreated 1.35%.
Economic Data and Market Trends
Key economic reports are expected this week, including the July Producer Price Index (PPI) and Consumer Price Index (CPI), July retail sales, industrial production, weekly jobless claims, and August regional manufacturing indexes from the Philly Fed and New York Fed. These reports could influence market direction and confirm the rally attempt.
ETFs Performance
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.2%, the iShares Expanded Tech-Software Sector ETF (IGV) increased 2.8%, and the VanEck Vectors Semiconductor ETF (SMH) gained 2.9%. The SPDR S&P Metals & Mining ETF (XME) and the SPDR S&P Homebuilders ETF (XHB) saw declines of 0.8% and 2.9%, respectively.
AI Stocks to Watch
- Palantir Technologies (PLTR): Surged 21.3% last week, hitting a three-year high. The stock is extended from its 50-day line and previous buy point but remains worth monitoring.
- Meta Platforms (META): Rose 6.1% to 517.77, reclaiming its 50-day line. A prior buy point of 514.01 or the August 1 post-earnings high of 527.17 could serve as entry points.
- ServiceNow (NOW): Increased 2.65% for the week to 811.59, breaking past its handle buy point.
- Samsara (IOT): Gained 8% to 38.24, with a cup-with-handle buy point at 39.21. Volatile but worth watching for earnings trends.
- Arista Networks (ANET): Rallied 5.2% to 335.87. Above the 50-day line and potentially forming a new base.
- Taiwan Semiconductor (TSM): Surged 11.55% to 167.17, fueled by strong July sales of AI chips.
Nvidia’s Struggles
Nvidia stock experienced a fourth consecutive weekly decline, falling 2.35% to 104.75. Concerns about AI spending fatigue and production delays for its next-gen AI chip are weighing on the stock.
Investment Strategy
Investors might consider gradual purchases in promising stocks but should remain cautious, awaiting a confirmed follow-through day (FTD) to signal a stronger market rally. Maintaining a broad watchlist and focusing on top potential targets is advisable.
For now, balance readiness to act with the patience to wait for clearer market signals.
I’m a finance writer with three years of experience in investment analysis. At Investorwelcome , I translate complex financial concepts into clear, actionable insights to help investors navigate the market with confidence. Combining my solid academic background with practical industry knowledge, I’m dedicated to providing readers with accurate and timely information. My goal is to empower both new and seasoned investors by simplifying intricate data and offering strategic advice. When I’m not writing, I stay engaged with market trends and investment innovations to ensure my content remains relevant and valuable.
