Dow Jones futures fell slightly Monday morning, along with S&P 500 futures and Nasdaq futures. Tesla fell on yet another valuation downgrade.
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The stock market rally retreated last week, with a long-awaited pullback taking hold. The selling has been orderly for the Nasdaq and S&P 500. Nvidia (NVDA),Apple (AAPL) and Meta Platforms (META) held their ground or marched higher, while Google parent Alphabet (GOOGL) regained a key level by Friday's close. Tesla (TSLA) retreated modestly last week, but after huge recent gains.
However, the Dow Jones, Russell 2000 and other measures showed more damage.
MongoDB (MDB), HubSpot (HUBS), Chipotle Mexican Grill (CMG), Shockwave Medical (SWAV) and DexCom (DXCM) are holding up well, trading near buy points.
MDB stock, HubSpot, Chipotle and Shockwave all have traded tightly among other bullish technical action. DXCM stock is trading right around the top of a base.
Friday night, DexCom raised its fiscal 2025 revenue guidance at its investor day.
With the market rally pulling back, this is a time to be watching leading stocks closely, seeing which names hold up best. Remember, a stock may find support or rebound from a key level on a given day, such as Super Micro Computer (SMCI), but then reverse lower.
NVDA stock continues to stand out as the true chip and AI leader. Meanwhile Advanced Micro Devices (AMD) and speculative plays such as C3.ai (AI) broke hard below their 21-day lines.
Apple stock quietly set a fresh record high with META stock marching to a 16-month best.
Tesla, Nvidia, MongoDB, Meta Platforms and HUBS stock are on IBD Leaderboard, with CMG stock on the Leaderboard watchlist. CMG stock is also on SwingTrader. Tesla stock and HubSpot are on the IBD 50. Tesla, Chipotle, HubSpot and MDB stock are on the IBD Big Cap 20.
The video embedded in this article discussed the market rally's action and analyzed HubSpot, Rockwell Automation (ROK) and Google stock.
Dow Jones Futures Today
Dow Jones futures lost 0.1% vs. fair value. S&P 500 futures dipped 0.1% and Nasdaq 100 futures declined 0.2%. TSLA stock and Google weighed slightly on S&P 500 and Nasdaq futures, both hit by analyst downgrades.
The 10-year Treasury yield fell to 3.7%.
Crude oil futures rose slightly.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally Last Week
The stock market rally snapped multiweek win streaks, with the Nasdaq showing modest declines while small caps struggled.
The Dow Jones Industrial Average slumped 1.7% in last week's stock market trading. The S&P 500 index and Nasdaq composite fell 1.4%. The small-cap Russell 2000 tumbled 2.95%.
The 10-year Treasury yield fell 3 basis points to 3.74%.
U.S. crude oil futures slumped3.85% to $69.16 a barrel last week. Copper futures sank 2%, including Friday's 2.1% slide. In addition to global demand concerns, the U.S. dollar had a strong week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.65% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) sank 1.7%. The iShares Expanded Tech-Software Sector ETF (IGV) slid just over 3%, with HUBS stock a component. The VanEck Vectors Semiconductor ETF (SMH) gave up 3.8%. Nvidia stock is the No. 1 holding in SMH, with AMD stock also a notable component.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 4.9% last week and ARK Genomics ETF (ARKG) lost 5.3%, following seven weeks of gains for both. Tesla stock is the top holding across Ark Invest's ETFs, though Cathie Wood sold 27,800 shares on Friday.
SPDR S&P Metals & Mining ETF (XME) fell just over 2% last week. The Global X U.S. Infrastructure Development ETF (PAVE) edged down 0.5%. U.S. Global Jets ETF (JETS) descended 1.75% after three big weekly gains. SPDR S&P Homebuilders ETF (XHB) edged up 0.5%. The Energy Select SPDR ETF (XLE) tumbled 4.3% and the Health Care Select Sector SPDR Fund (XLV) inched down 0.2%. The Industrial Select Sector SPDR Fund (XLI) retreated 2.1% after a three-week boom.
The Financial Select SPDR ETF (XLF) sank 2.5% and the SPDR S&P Regional Banking ETF (KRE) tumbled 8.1%.
This Big Cathie Wood Stock Is Outperforming Even Tesla
Stocks Near Buy Points
MongoDB stock rose 2.7% to 389.99 in an outside, upside week. MDB stock is within a three-weeks tight pattern or a high-tight-flag with a 398.89 buy point. The relative strength line is around a 10-month high, and up sharply since early May. That reflects MDB's strong outperformance vs. the S&P 500.
MDB stock popped 4.1% Thursday as the database software firm made several AI announcements and an expanded Google Cloud partnership at its investor day. That provided an aggressive entry around 385 or 389. MongoDB stock edged higher on Friday, holding strong as several Thursday winners sold off.
HubSpot stock fell 1.4% to 512.21, continuing to find support at the 21-day line. HUBS stock has a 535.12 buy point from a four-weeks-tight pattern. A move above Friday's high of 522.20 could offer an early entry.
Chipotle stock closed off highs, but edged up 0.5% last week to 2,043.68, continuing to trade around the 21-day and 10-week lines. CMG stock has a five-weeks-tight pattern that's now also a flat base, both with a 2,139.88 buy point, according to MarketSmith analysis. However, investors could use a move above Wednesday's high of 2,092.51 as an early entry.
Shockwave stock has had some wild moves on a daily chart, but on a weekly chart has shown tight closes. Shares dipped 0.6% to 292.63, ending four weeks of modest gains. SWAV stock has been finding support at the 21-day and 10-week lines. Investors could still use the 308.09 cup-with-handle buy point. The 300 level has been a key level and could serve as an early entry.
DexCom stock fell 2.6% to 126.75 last week. But DXCM stock did snap a four-day losing streak on Friday, finding support at the 21-day line and holding the 126.44 buy point. The diabetes products giant is trying to clear a range going back to the start of November.
Late Friday, Dexcom said it expects 2025 sales of $4.6 billion to $5.1 billion. That's an increase of $600 million from its previous range. The company also slightly raised some 2025 profit margin forecasts. DXCM stock isn't moving much early Monday.
Nvidia Stock
Nvidia fell 1.1% to 422.09 last week, only edging down from a record high to its 10-day line. A pullback to the 21-day line could potentially offer a buying opportunity.
AMD stock skidded 8.4% to 110.01, knifing through its 21-day line and tumbling to just above its 10-week line. Shares are 17% off a 52-week intraday high of 132.83 on June 13, when AMD unveiled new AI chips aimed at rivaling Nvidia's offerings.
Meanwhile, AI stock plunged 25% to 33.39. On Friday, C3.ai stock tumbled 10.8%, below its 21-day line and now back into a deep consolidation cleared earlier this month. AI stock is still essentially a double from its early May low, but it's now almost 32% off its 52-week high of 48.87 set just a week earlier.
Tesla Stock
Tesla stock fell 1.5% to 256.60 after reversing from 276.99 on Tuesday, the highest point in nearly nine months. That came amid three analyst downgrades during the week, mostly on valuation.
After a second big rally in 2023, including a record 13-day win streak, Tesla stock is due for a break, especially amid a broad market pullback. It's still extended from even the 21-day moving average.
It's possible TSLA stock is starting to forge a handle on a consolidation going back to late September. Given the depth of the consolidation and the powerful recent run, Tesla could use a handle with some length and depth.
Tesla stock fell over 1% in premarket trading. Goldman Sachs downgraded the EV giant to neutral but raised the price target to 248 from 185. That follows three TSLA stock downgrades last week, at least two involving higher price targets.
Apple Stock, Meta
Apple and Meta stock didn't act like there was a market pullback. Both kept finding support from their fast-rising 10-day lines. AAPL stock climbed about 1% to hit a fresh record high. Meta stock advanced 2.7% to a 16-month best.
Market Forecast For The Next Six Months
Market Rally Analysis
The stock market rally pulled back last week. So far it's been an orderly retreat for the S&P 500, Nasdaq and most leading stocks, though breadth remains an issue.
The Nasdaq, which had gotten extended after an eight-week run, fell back to around its 10-day line, but came well off Friday's lows and never undercut Thursday's low. The S&P 500 dropped slightly below the 10-day line. Apple stock, Meta, Nvidia and Tesla holding up provided some support.
The Dow Jones fell below its 21-day line to test its 50-day line on Friday. The Russell 2000 also fell through its 21-day and is nearing its 200-day and the top of a prior range.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) slumped 2.8% for the week, far worse than the Nasdaq 100's 1.5% decline. QQEW fell to its 21-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) slumped 2.7%, falling below the 21-day line and its April highs. It's not far from a 50-day line test. The RS line for RSP continues to weaken, falling to its worst level since late 2020. That shows how RSP continues to underperform the S&P 500.
The advance-decline lines weakened significantly last week. While it's natural to see losers take control in a market pullback, a little more strength outside of growth leaders would be nice.
Is the market pullback almost finished? It's possible. But with the Nasdaq 6.5% above its 50-day and the Nasdaq 100 7.7% above that line, they would quickly look significantly extended again if they marched higher.
The Nasdaq and S&P 500 retreating to their 21-day lines over a week or two would be helpful. That would bring the 50-day lines much closer.
During a strong-trending market, second-tier names and even laggards will advance. The pullback is separating the true leaders, but it's an ongoing process. Some resilient stocks today could start to buckle, while others that took some hits may shore up. Google stock is an example of the latter. After falling below its 21-day line on Wednesday and nearing its 10-week line Thursday morning, GOOGL stock rebounded back above the 21-day line. (Google was signaling a dip back below the 21-day on Monday, following a UBS downgrade.)
Chip, software and megacap growth names are still market leaders, including MongoDB and HubSpot, along with homebuilders and some other housing stocks. Medical products is an emerging area, with SWAV stock and DexCom in that field. Some restaurants such as CMG stock are on the menu as well.
Time The Market With IBD's ETF Market Strategy
What To Do Now
The stock market rally appears to be in a healthy, normal pullback, with relatively modest losses. But it could grow more intense. Also, you don't know how individual stocks and sectors will hold up.
Investors generally should be holding steady, waiting for signs that the pullback is ending. Look for stocks that are respecting key levels and showing improving relative strength.
If you feel compelled to trade now, be ready to jump back out. Thursday's market bounce flashed some aggressive entries. MDB stock is holding up for now, but several others quickly turned into slim or even solid losers.
The current pullback may be setting the stage for numerous buying opportunities in the coming days or weeks. So it's a time to get prepared, building up your watchlists. Stay engaged, watching the action of the overall market and being ready to pounce close to buy points.
ReadThe Big Pictureevery day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarsonfor stock market updates and more.
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