Dow Jones, S&P 500, and Nasdaq futures are set to open Sunday evening following Moody’s cut of its U.S. sovereign outlook to negative. The stock market rally rebounded on Friday, with leading stocks performing well. Nvidia, Broadcom, Taiwan Semiconductor, KLA, and Lam Research flashed buy signals, while MercadoLibre, Roku, and Datadog are recent earnings winners that may offer a buying opportunity.
Investors should be looking for stocks setting up and taking advantage of buying opportunities, especially as Nvidia stock, Datadog, and MELI stock are on the IBD Leaderboard and IBD 50, with DDOG stock on the IBD Big Cap 20 and MercadoLibre as Friday’s IBD Stock Of The Day.
Moody’s Investors Service cut its U.S. outlook to negative from stable, citing high budget deficits and political polarization, reaffirming, for now, its AAA rating on U.S. sovereign debt. ETFs indicated a 0.1% drop for the Dow Jones, S&P 500, and Nasdaq 100, following the Moody’s negative U.S. outlook.
The stock market rally snapped long winning streaks on the major indexes this past week, finishing with solid gains. Market breadth was better Friday but still a concern for the week. Market leadership is strong, with leaders across various sectors. IGV, SMH, XHB, XLE, and XLV ETFs fared differently, reflecting more-speculative story stocks.
Chip stocks like Nvidia, Broadcom, Lam Research, KLA, and TSM are in buy zones, with TSM stock signaling a turnaround after three quarters of declining earnings and revenue due to a 15.7% rise in October sales. Meanwhile, MELI, Roku, and Datadog offer a second chance for investors as they offer another buying opportunity.
The stock market rally is looking healthy, rebounding quickly from Thursday’s pullback. Investors can continue to gradually add exposure and work on their watchlists, ready if new leaders break out or clear other buy points. With a busy week ahead for economic reports and ongoing earnings season, investors can stay in sync with the market direction and leading stocks and sectors through The Big Picture and updates from Ed Carson.
