Dow Jones futures edged higher Monday morning, along with S&P 500 futures and Nasdaq futures, while crude oil prices kept rising as Israel-Iran attacks continued. The Federal Reserve is on tap this week.
The stock market rally fell solidly Friday and modestly for the week as Israel hit Iranian nuclear sites and Tehran responded.
AI chip giants Nvidia, Broadcom and Taiwan Semiconductor have cleared buy points, at or near record highs. Investors should also watch AMD, Astera Labs, Micron, Super Micro, Vertiv, Arm and Arista Networks.
Dow Jones Futures Today
Dow Jones futures climbed 0.1% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures rose 0.25%.
U.S. crude oil futures climbed 1% to nearly $74 a barrel, but well off Sunday evening highs. Oil prices vaulted 13% last week to $72.98 a barrel, but hit $77 intraday Friday.
China reported May retail sales grew 6.4% vs. a year earlier, up from April's 5.1% and views for 4.9%. Industrial production climbed 5.8%, down from April's 6.1% and forecast for 6%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Israel-Iran News
Israel, which quickly established air supremacy, has been striking key Iranian targets consistently. Iran has retaliated with several waves of ballistic missiles. Those making it through defenses have killed several civilians.
Israel expanded its targets over the weekend to strike Iranian energy assets, including a refinery, gasoline depot and a natural gas processing site. However, Israel so far has not hit Iran's oil fields or energy exports. Crude oil prices came off highs Friday in part because Israel did not target Iranian energy in the initial wave of attacks.
Israel has killed many of Iran's military leaders and nuclear scientists. Its attacks have damaged Iran's nuclear sites, but some experts say they haven't penetrated the key underground areas in Natanz where uranium enrichment takes place.
Israel reportedly targeted leaders of the Iran-backed Houthi militia in Yemen on Sunday.
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Stock Market Rally
The stock market rally gave up modest weekly gains on Friday.
The Dow Jones Industrial Average fell 1.3% in last week's stock market trading, plunging below its 200-day and 21-day lines Friday. The S&P 500 index lost 0.4% and the Nasdaq composite gave up 0.6%, both holding above their late May ranges and not far from record highs. The small-cap Russell 2000 sank 1.5%, tumbling back from the 200-day line.
Leading stocks were mixed. Breakouts have been tricky, even before Friday, with stocks often quickly pulling back. Some have quickly rebounded. Plenty of names are in buy zones or setting up.
Nuclear stocks jumped on news while oil stocks surged with prices. Credit card companies and many financials were losers.
The 10-year Treasury yield fell 8.5 basis points to 4.42%. That's despite rising 6.5 basis points on Friday, with Treasuries not acting like a safe haven amid the Israel-Iran conflict.
The Federal Reserve will conclude a two-day meeting on Wednesday afternoon. Markets see no real chance of a rate cut, but quarterly economic projections, policymakers' "dot-plot" and Fed chief Jerome Powell could offer some clues. However, with Trump tariffs in flux, policymakers may still want more clarity.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 2.3% last week. The iShares Expanded Tech-Software Sector ETF edged up 0.25%. The VanEck Vectors Semiconductor ETF climbed 1.7%. Nvidia, Broadcom and Taiwan Semiconductor are the three largest SMH holdings, but Micron and AMD also are key members. ARK Innovation ETF advanced 18% last week.
SPDR S&P Metals & Mining ETF rose 1.5% last week. The Energy Select SPDR ETF soared 5.6% and the Health Care Select Sector SPDR Fund advanced 1.3%. The Industrial Select Sector SPDR Fund declined 1.6%. The Financial Select SPDR ETF slumped 2.6%.
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AI Hardware Stocks
Nvidia stock is still within a buy zone while Broadcom and Taiwan Semiconductor stock are extended from handle entries. All have mounted big comebacks from the Deepseek sell-off starting in late January.
Some other AI chip and hardware plays also have rebounded over the past two months but have a long way to reach their all-time highs. They're setting up potential aggressive entries. But buying stocks that have lagged the sector and market leaders is always tricky.
Micron stock is the strongest of these names recently, blasting above an early entry around 99 above the 200-day line and continuing to run. A pause around current levels — above key resistance around 112-114 — could create a new opportunity. But Micron earnings are due in late June.
On the other extreme, AMD stock has hit resistance at the 200-day line, though it's found support at a rising 21-day. Clearing the 200-day would offer an aggressive entry.
Arista Networks stock has been finding support around the 21-day line, also stalling below the 200-day. A move to the 100 level would clear the 200-day and some short-term levels.
Meanwhile, AI chip plays Astera Labs and Arm Holdings, AI server maker Super Micro and AI cooling and infrastructure play Vertiv are all above their 200-day lines, pausing recently but generally finding support at or above their 21-day lines.
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What To Do Now
The stock market rally hasn't wanted to cede ground, though it did so Friday, with Wall Street wary heading into a weekend of Israel-Iran attacks.
Investors may have needed to cut some losers over the past few days, or chosen to take partial profits for individual or portfolio reasons.
But, for now, it's still a time to be heavily invested.
Work on watchlists. A large number of stocks from a variety of groups are setting up. If the market rebounds soon, several buying opportunities will appear.
But if selling continues, investors will have to cut exposure more significantly. Review your portfolio for laggards or losers and have your exit strategies ready.
Dow Jones futures opening Sunday and U.S. markets' Monday open will be important to watch. The Fed meeting headlines a holiday-shortened week.
Broadcom stock is on IBD Leaderboard, while Nvidia is on the Leaderboard watchlist. Broadcom stock also is on the IBD Big Cap 20. Nvidia stock is on IBD Sector Leaders.
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