Last week, the Nasdaq experienced a significant surge, with the S&P 500 also hitting new record highs, driven mainly by strong performances from major tech companies.
Despite this, the Dow Jones and Russell 2000 saw declines, dipping below their 50-day moving averages.
Companies like Apple (AAPL), Nvidia (NVDA), and Microsoft (MSFT) are currently neck and neck in terms of market valuation, all surpassing the $3 trillion mark.
Microsoft’s stock is particularly notable, now within a buy zone, alongside other stocks like Meta Platforms (META), Pinterest (PINS), Spotify (SPOT), Netflix (NFLX), Chipotle Mexican Grill (CMG), and Universal Health Services (UHS).
Additionally, Tesla (TSLA) has established a new base, with shareholders approving a substantial pay package for CEO Elon Musk. However, there are concerns about the stock’s chart weaknesses and ongoing issues with Cybertruck deliveries.
Market fragmentation and caution for new purchases
The market shows signs of fragmentation, with some stocks exhibiting vulnerabilities that could make new investments risky.
Nvidia, Universal Health, and Pinterest are highlighted on the IBD Leaderboard, while Spotify, Netflix, and Chipotle stand out on SwingTrader. Microsoft is recognized among the IBD Long Term Leaders alongside Nvidia and Netflix, which also make an appearance in the IBD 50 list. Nvidia, Netflix, and Pinterest are also in the IBD Big Cap 20.
In the futures market scenario, Dow Jones futures drop below fair value, S&P 500 futures show a minor rise, and Nasdaq 100 futures record a modest increase of 0.1%. The 10-year Treasury yield sees an uptick to reach 4.25%. It’s worth noting that movements in Dow futures during trading may not always align directly with stock market sessions.
Despite tame inflation levels, there are indications of divergence within the stock market rally. Last week saw a surge of 3.2% for the Nasdaq and a gain of 1.6% for the S&P 500. Both hit new highs.
With strong support from companies like Apple, Oracle (ORCL), Broadcom (AVGO), and Adobe (ADBE). On the side, despite contributions from Apple and Microsoft, the Dow Jones Industrial Average experienced a decline of 0.5%, slipping below its 50-day moving line. The Russell 2000 and S&P MidCap 400 also saw declines to hit their points in over a month.
ETF trends
Changes were observed in the performance of growth ETFs as the Innovator IBD 50 ETF (FFTY) rose by 2.2%, and the iShares Expanded Tech Software Sector ETF (IGV) saw a gain of 3.3%, mainly driven by contributions from companies like Microsoft, Oracle, and Adobe. The VanEck Vectors Semiconductor ETF (SMH) experienced a surge of 6.2%, influenced mainly by holdings in Nvidia and Broadcom.
Apple, Microsoft, and Nvidia are currently competing for the leading market cap position. Apple reached a market cap of $3.258 trillion, while Nvidia followed closely at $3.249 trillion, with Microsoft ahead at $3.288 trillion. Collectively, they contribute to over 20% of the S&P 500’s market capitalization.
Chipotle, Meta, Spotify, and Netflix have displayed promising trends regarding stock movements. Netflix’s stock price rose 4.35%, while Microsoft recovered a flat base buy point. Although Tesla’s stock saw an increase, it remains below its 200-day line.
The current market environment is intricate, and investors are advised to exercise caution when making decisions.
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