Dow Jones futures were little changed early Monday, along with S&P 500 futures and Nasdaq futures.
The stock market rally continued to advance last week, with the S&P 500 moving above 5,000 for the first time. The Nasdaq composite powered higher, briefly topping 16,000 and nearing all-time highs.
Several huge AI-related earnings gaps took place, including Arm Holdings, Palantir Technologies and Cloudflare. Those reports also buoyed other AI- and cloud-focused chip and software stocks.
UiPath, a big Cathie Wood AI play, flashed buy signals Friday. Samsara, another AI stock, also is in a buy area. SPS Commerce broke out, while Intra-Cellular Therapies and Shift4Payments are actionable.
But with the market rally looking extended, investors should be cautious about new buys.
Dow Jones Futures Today
Dow Jones futures lost a fraction vs. fair value. S&P 500 futures and Nasdaq 100 futures were flat.
The 10-year Treasury dipped to 4.15%.
Crude oil futures fell about 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Earnings
Earnings season remains in force. Monday.com easily beat Q4 EPS views before Monday's open, while also topping on revenue. The workplace management software maker guided in line for Q1 and 2024 revenue. But shares tumbled 11% after surging 12% last week to their best levels in nearly two years.
Arista Networks, Cadence Design Systems and Medpace Holdings report Monday night, while Shopify and Datadog are due early Tuesday.
Other News
Diamondback Energy will buy rival Endeavor Energy for $26 billion including debt in cash-and-stock deal, creating another Permian shale giant. The companies confirmed the deal after multiple reports Sunday that an agreement was close. Diamondback stock climbed slightly early Monday.
Tesla cut prices on two Model Y variants by $1,000 through February, the EV giant announced Saturday. Shares lost a fraction early Monday.
Arm stock and Shopify are on IBD Leaderboard. Cadence Design stock is on the IBD Long-Term Leaders list. Arm, Arista, Samsara, Cloudflare, Datadog and Intra-Cellular are on the IBD 50. Arista, Shopify, Datadog and Cadence Design are on the IBD Big Cap 20.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally had another solid week, with AI and other tech names leading the way.
The Dow Jones Industrial Average just gained a fraction in last week's stock market trading. The S&P 500 index rose 1.4%, moving above 5,000. The Nasdaq composite popped 2.3%, briefly topping 16,000 level.
The small-cap Russell 2000 rebounded 2.4% in a big outside week after testing key levels. It closed above the key 2,000 level for the first time this year.
With Nasdaq and Russell 2000 picking up steam late in the week, more stocks flashed buy signals. Some were huge earnings gap-ups such as Palantir, but not all.
Still, the number of buying opportunities remains fairly modest, while many of the big leaders are greatly extended.
It's definitely an AI-led rally. Not only are AI plays enjoying big gains, but tech titans are planning heavy spending to push ahead on artificial intelligence. That bodes well for AI chip and software plays, and those stocks reflect that.
Market leadership is broader than AI and tech, with housing, construction and industrial stocks faring well, as well as many travel, financial and health care names.
However, the Nasdaq is now 6.8% above its 50-day moving average. The tech-heavy composite could get more extended, but the risks of a pullback would continue to increase. Many AI leaders are becoming extremely extended.
The 10-year Treasury yield leapt 16 basis points to 4.19%.
U.S. crude oil futures jumped 6.3% to $76.84 a barrel last week.
Tesla Cuts Model Y Prices For A Limited Time — At Least For Now
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF rallied 2.9%, with PLTR, UiPath, SPS Commerce and Samsara in IGV. The VanEck Vectors Semiconductor ETF surged 6.6%.
The SPDR S&P Metals & Mining ETF fell 2% last week. The Global X U.S. Infrastructure Development ETF popped 2.1%. U.S. Global Jets ascended 2.9%. SPDR S&P Homebuilders stepped up 2.7%. The Energy Select SPDR ETF edged down 0.25%, and the Health Care Select Sector SPDR Fund climbed 1.4%. The Industrial Select Sector SPDR Fund rose 1.2%.
The Financial Select SPDR ETF edged up 0.3%, and the SPDR S&P Regional Banking ETF fell 1%.
Reflecting stocks with more speculative stories, the ARK Innovation ETF jumped 6.3% last week. ARK Genomics tacked on 4.3%. UiPath stock is a top-five holding across Cathie Wood's ARK Invest.
Time The Market With IBD's ETF Market Strategy
Stocks In Buy Zones
Samsara stock leapt 9.5% for the week to 35.47, rebounding from the 50-day line on Thursday and topping a 35.13 short-term high on Friday. IOT has a 36.91 official buy point, according to MarketSmith analysis.
SPS Commerce jumped 14.8% to 211.08 on Friday, racing past a 198.35 flat-base buy point. At this point, SPSC stock is extended, but investors can look for a pullback into the buy zone or perhaps a shelf or tight pattern. Late Thursday, the supply-chain management software firm reported that fourth-quarter earnings and sales both rose 19%, while offering bullish guidance.
Shift4 stock climbed nearly 2% to 77.44 for the week, moving back above a 76.51 buy point. It didn't close above a 77.51 resistance level, which would clear the bulk of several weeks of tight trading.
UiPath stock surged 12.4% last week to 26.35, including Friday's 8.2% spike. The Cathie Wood stock briefly cleared the official 26.51 buy point Friday morning. On Thursday, UiPath stock was actionable from the 50-day line bounce and a 24.40 short-term high.
Intra-Cellular Therapies stock advanced 8.2% to 72.77, moving toward a 74.17 buy point. Shares are still actionable from a short-term high of 70.15 cleared on Thursday.
What To Do Now In The Stock Market
In this TikTok era, patience is a lost art. The market rally has been doing well, but is looking somewhat extended. Also, there aren't many stocks to buy.
You can try some incremental buys, but it's not a time to be ramping up exposure. You can consider partial profits are greatly extended winners, depending on your conviction and trading style.
For the most part, it's a time to enjoy the ride.
You do need to keep running your screens, looking for possible setups. Have your exit strategies ready.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
