Jul. 4 at 1:07 PM
$DIA $SPY $QQQ $IWM $TLT
From Investors Business Daily last night:
"Dow Jones Futures: Techs' Rise Signal AI Trend Isn't Over; Apple, Robinhood Flash Buy Signals"
Dow Jones futures lost a fraction Friday afternoon, while S&P 500 futures and especially Nasdaq futures rose, as U.S. stock markets enjoy a holiday weekend.
The stock market showed saw solid to strong weekly gains on the major indexes. But the Dow Jones hit record highs Thursday while the Nasdaq slipped below key moving averages amid hefty losses in AI names. Biotechs and many medical groups did well, along with several other groups.
Apple (AAPL) and Robinhood Markets (HOOD) made bullish moves Thursday, but Tesla (TSLA) tumbled despite easily beating delivery forecasts, a day after sister company SpaceX (SPCX) gave up an aggressive entry. Sandisk broke below a key level for the first time in months, offering a possible sell signal.
Investors should be cautious amid the current volatility and sector rotation, perhaps cutting exposure in AI leaders.
Delta Air Lines (DAL) will report earnings next Friday while Taiwan Semiconductor (TSM) will release June sales. South Korean memory giant SK Hynix (SKHY) will begin trading on the Nasdaq on July 10.
-- Dow Jones Futures Today --
Dow Jones futures edged lower as of 1 p.m. ET Friday. S&P 500 futures climbed 0.4%. Nasdaq-100 futures jumped 1.2%, suggesting that the Nasdaq composite could regain its 50-day and 21-day lines on Monday.
U.S. stock markets were closed ahead of the Fourth of July holiday. But other markets around the world were open.
Dow futures will reopen at 6 p.m. ET on Sunday.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
-- Stock Market Rally --
The stock market rally saw strong weekly gains on the major indexes, but it didn't feel that way. The Dow Jones hit a new high on Thursday. The Nasdaq, after big rallies to start the week, fell back below the 21-day and 50-day lines on Thursday, though it pared losses a bit by the close.
The Dow Jones Industrial Average jumped 2% in last week's stock market trading. The S&P 500 index popped 1.8% just above the 21-day moving average. The Nasdaq composite rallied 2.1%. The small-cap Russell 2000, which hit a record high intraday Wednesday, finished with a 0.55% weekly loss.
The Invesco S&P 500 Equal Weight ETF (RSP) gained 2.2%, hitting a record high Thursday.
The Nasdaq in particular is at important levels. A strong move above the 50-day line and this past week's highs would be a bullish sign, breaking a monthlong trendline. But the composite also isn't that far from June's lows. The S&P 500 looks somewhat similar, though it's above the 21-day and 50-day lines.
Chips and most AI hardware stocks had ugly downside reversals for the week. Many broke below key levels while others are testing support.
But much of the market is acting well, with healthcare, transportation, aerospace and financials doing well. Software had a strong week, including the handful of true leaders.
The 10-year Treasury yield jumped 10.5 basis points to 4.48% for the week.
U.S. crude oil futures dipped 0.8% to
$68.69 a barrel for the week.
-- ETFs --
Among growth ETFs, the CapForce IBD 50 ETF (FFTY) lost 2% for the week. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 6.1%. The VanEck Vectors Semiconductor ETF (SMH) sank 3.2%.
ARK Innovation ETF (ARKK) rallied 4% for the week and ARK Genomics ETF (ARKG) added 3.6%. Tesla stock is the No. 1 holding across ARK Invest, with Robinhood a major position. Cathie Wood also has built up a SpaceX stake since its IPO.
SPDR S&P Metals & Mining ETF (XME) declined 2.7% last week. U.S. Global Jets ETF (JETS) dipped 0.2%. SPDR S&P Homebuilders ETF (XHB) stepped down 2.7%. The Energy Select SPDR ETF (XLE) slipped 1.15% and the Health Care Select Sector SPDR Fund (XLV) climbed 2.1%. The Industrial Select Sector SPDR Fund (XLI) gained 1.5%.
The Financial Select SPDR ETF (XLF) jumped 3.8%, with Robinhood stock in XLF.
-- Stocks To Watch --
- Apple stock jumped 8.8% to 308.63 for the week, regaining a prior 288.62 buy point on Tuesday, the 50-day line on Wednesday, and then breaking a trendline Thursday with a 4.8% pop. On June 25, AAPL stock dived 6.1% after the iPhone maker said it was raising iPad and MacBook prices due to high memory prices.
Two news reports buoyed AAPL stock on Thursday. Japan's Nikkei said Apple plans to make 10 million foldable iPhones for launch later this year. Also, Apple plans redesigned MacBook Pro and iPad Pro devices for the first half of 2027.
- Tesla reported blowout second-quarter deliveries on Thursday, but TSLA dived 7.5% to 393.45 for the day, back below the 21-day, 50-day and 200-day moving averages. Shares had been on the cusp of an aggressive buy point. Tesla did rise 3.6% for the week.
- SpaceX rose 5.8% for the week to 162, but retreated from Tuesday's push to 172.40 that offered a very aggressive entry. SPCX stock is trying to find its footing and build the right side of an IPO base.
- Robinhood stock surged 4.2% to 112.73 for the week, rebounding above the 200-day line and then clearing a short-term high of 112.50 on Thursday. That level roughly corresponds to a trendline entry. While HOOD stock pared Thursday's intraday gain, it closed high in the weekly range. The trading app surged on a big product launch and global expansion event on Wednesday and an analyst upgrade the following day. There is still a lot of overhead in Robinhood.
- Sandisk stock dived 16.5% for the week to 1,745, including Thursday's 14.1% plunge, knifing well below the 21-day moving average for the first time since the end of March. For longtime SNDK holders, breaking the 21-day was a possible place to trim the position. Meanwhile, the memory-chip giant, by far the biggest S&P 500 winner in 2026, is approaching the 50-day and especially the 10-week lines.
-- What To Do Now --
Is this a sector rotation? If so, are AI stocks taking a brief pause or going to be out of the favor for a substantial period? If it's the latter, will medicals, transports and other rising sectors soldier on or soon falter as well?
The simple truth is that nobody knows. Don't try to guess. Focus on what the market is doing right now. AI stocks have been whipsawing for the past month, with most losing ground. Those losses are coming incredibly fast in growth names with average true ranges around 10%. Round-tripping losses can turn into losers in a matter of minutes while small losses can become outsize just as fast.
That's been a signal to reduce exposure in that area, replaced by leading stocks in other sectors and by building up cash.
While there's a defensive tone to end the week, investors have to be ready for anything. Further losses in the Nasdaq and leaders like Sandisk could signal the need for a more-significant exodus from chips and AI. But a good day or two could revive bullish spirits.
So have watchlists and exit strategies ready.
