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Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. The Federal Reserve meeting will take center stage, with policymakers set to cut interest rates for the first time since the Covid crisis in 2020.
The stock market rally saw a dramatic rebound, with the S&P 500 and Nasdaq composite posting their best weekly gains of the year and recouping their 50-day lines after a selloff the week before. The S&P 500 and the Dow Jones are close to record highs. A large number of leading stocks gave buy signals.
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Investors are optimistic about Fed rate cuts and artificial intelligence, the two big catalysts for the stock market recovery this year.
Nvidia (NVDACEO Jensen Huang said demand for the company’s AI chips is “incredible” and that production of the next generation of Blackwell chips is well underway. Nvidia shares soared, boosting other AI plays and the broader market.
Arista Networks (ANET), Interactive real estate agents (IBKR), Shift4 (FOUR), DoorDash (DASH), Royal Caribbean (RCL), Metaplatforms (META), Sea (S.E) And Microsoft (MSFT) flashing buy signals. They all have similar stocks that are also actionable or close to action, for a total of 25 stocks in buy areas highlighted in this article.
It’s been a time for investors to make purchases, although the Fed meeting is worth keeping an eye on.
Nvidia, DoorDash and Meta stock are active IBD rankings. The Interactive Brokers share is listed on SwingTrader. Microsoft stock is listed at IBD Long-Term Leaders. Nvidia, Arista Networks, Meta Platforms and Royal Caribbean Stock are present IBD50. Arista’s stock is on the ropes IBD Bigcap 20. Shift4 stock has run out IBD Industry Leaders.
Interactive Brokers was the IBD stock of the day on Friday. DoorDash stock was the pick Thursday. Sea supply was the September 6 selection.
Dow Jones futures
Dow Jones futures open at 6:00 PM ET, 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.
Fed Meeting September 17-18: How Much Will Powell Cut Rates?
The Federal Reserve meets Tuesday and Wednesday. An official statement is expected at 2:00 PM ET on Wednesday. Fed chief Jerome Powell will speak at 2:30 PM Dutch time.
It is a foregone conclusion that the Fed will cut rates. But markets are divided on whether the Fed’s first rate cut will be 25 or 50 basis points. So it will be a semi-surprise anyway.
Markets have almost fully priced in the 100 basis point cuts by year end, with a greater than 50% chance of 125 basis points.
Fed policymakers will release an updated dot plot showing where they think interest rates are headed, along with economic projections. Investors will be watching Powell’s comments closely for clues about the pace of future Fed rate cuts.
A small rate cut by the Fed or a signal from Powell that future moves will be gradual could disappoint markets.
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Stock market rally
The stock market rally this past week was a positive break from expectations, following the ugly, expectation-busting sell-off the week before.
The Dow Jones Industrial Average fell 2.6% during last week’s stock market trading. The S&P 500 index rose 4% and the Nasdaq index rose 5.95%, their best weekly gain of the year. The small-cap Russell 2000 rose 4.4%.
On Friday, September 6, the Nasdaq closed decisively below the low of the follow-up day of August 13, a very bearish sign. The S&P 500 didn’t, but it wasn’t far off.
Stocks rallied last week, but Wednesday was the turning point. After selling off early in the session, the indices rose sharply, with the S&P 500 closing above the 50-day mark. The Nasdaq followed on Thursday.
On Friday, the Dow Jones and the S&P 500 fell to just below record highs. The Russell 2000 and S&P MidCap 400 moved above that key level after nearly hitting their 200-day mark Wednesday morning.
A host of leading stocks, including some technology names, raced into buying territory during the week
The yield on ten-year government bonds fell by 6 basis points to 3.65%. U.S. crude futures rose 1.45% to $68.65 a barrel after hitting a 52-week low on Tuesday.
ETFs
Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) rose 6.95% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 4.8%, with Microsoft shares taking a major position. The VanEck Vectors Semiconductor ETF (SMH) spiked 10.2%, with Nvidia stock the dominant component.
SPDR S&P Metals & Mining ETF (XME) recovered by 8.2%. The US Global Jets ETF (JETS) rose by 3.7%. SPDR S&P Home Builders ETF (XHB) rose by 6.5%. The Energy Select SPDR ETF (XLE) gained 3.7% and the Health Care Select Sector SPDR Fund (XLV) added 1.4%.
The Industrial Select Sector SPDR fund (XLI) advanced 3.7%. The Financial Select SPDR ETF (XLF) rose by 0.5%.
Time the market with IBD’s ETF market strategy
Arista Stock
Arista Networks shares rose 14.5% to 359.76 last week. On Wednesday, shares crossed the 50-day mark, and on Thursday they offered an early entry by crossing a trend line. On Friday, ANET stock topped a 358.68 buy point after an awkward situation.
Related stocks: Fellow AI hardware plays Broadcom (AVGO) And Taiwanese semiconductor (TSM) have cleared early registrations. Nvidia shares rose 15.8% last week, offering an aggressive entry above the 50-day mark.
Meta stock
Meta shares rose 4.9% to 524.62 last week. Shares rebounded from their 50-day high on Wednesday and then turned actionable as they crossed the 21-day mark and short downtrend. Meta stock has a buy point of 542.81. Investors can also use 544.23 as an alternative entry.
Related stocks: Play online advertisement Trade Bureau (T.D) bullishly recovered from the 10-week line last week, regaining a buy point after a very V-shaped consolidation.
Interactive Brokers shares fell 4.5% to 128.07. Shares briefly hit a buy point of 128.98 on Friday, pulling back but still offering an early entry. IBKR shares found support at the 50-day on Wednesday.
Related stocks: Stifel Financial (SF) And Piper Sandler (PIPR) offer early registrations, while Robinhood Markets (HOOD) has broken out.
Shift4 stock
Shift4 shares rose 9.5% to 82.92, recovering from the 10-week line. Shares broke a handle downtrend on Thursday. On Friday, VIER stock topped the 84.26 cup-with-handle buy point intraday.
Related stocks: Restaurant payments are rivalrous Toast (TOST) and buy now, pay later specialist Confirm holdings (AFRM) are feasible. MasterCard (MA) is in a traditional buying zone.
DoorDash Inventory
DoorDash shares rose 6.3% to 131.35 last week, just passing a 131.21 cup-with-handle buy point on Friday, according to Market wave. The shares were already actionable after recovering from the 21-day line and breaking the handle’s downtrend.
Related stocks: Instacart parent Maple Bear (SHOPPING CART) is just below a buy point and is demonstrably useful. Uber (UBER) was above the 50-day and 200-day lines on Friday, offering an aggressive entry.
Royal Caribbean Stocks
Shares of Royal Caribbean rose 7.3% to 167.96, marking a 169.47 cup-with-handle buy point on Friday. RCL stock can be used by breaking trend lines from the top of the base and handle. The cruise line giant reclaimed its 21- and 50-day lines on Wednesday.
Related stocks: Online travel giant Bookings of holding companies (BKNG) is on the verge of an outbreak. United Airlines (UAL) is in a buy zone.
Sea supply
Sea stocks rose 5.2% to 81.18. The Southeast Asian e-commerce and gaming giant maintained its buy point of 76.60 and 21 days from the previous week. This week, shares rose outside the 21-day line and broke a brief downtrend. Technically, the sea supply is somewhat expanded, but it is still usable.
Related stocks: South Korean e-commerce giant Coupang (CPNG) is in a buy zone.
Microsoft stock
Shares of Microsoft recovered 7.2% to 430.59, back above the 200-day mark and then the 50-day mark, as well as a short-term high. Although MSFT shares are well below the consolidation buy point of 468.35, they are useful here as a long-term leader. The relative strength line is still recovering, but above the 50-day moving average.
Related stocks: ServiceNow (NOW), another software giant with generative AI offerings for end users, is in a buying zone. Amazon.com (AMZN), a Microsoft Azure rival with Amazon Web Services, action can be taken after the 50 days expire.
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What to do now
The stock market rally is back on track. The major indices look strong and the leading stocks look better.
Investors should have taken advantage of the buying opportunities especially in recent days. Continue to do this if the market and your investments are performing well.
While AI and other tech growth stocks are back in business, many other sectors continue to look strong. That should be reflected in your watchlists and your portfolio.
However, the Fed meeting and Powell’s comments represent a major risk event.
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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