[Dow Jones futures](https://examplelink.com) are set to open Sunday evening, alongside [S&P 500 futures](https://examplelink.com) and Nasdaq futures. Apple (AAPL), the Federal Reserve, and the October jobs report will be the primary focus of news in the upcoming week. This past week, the stock market experienced a significant correction, with major indexes reaching multimonth lows due to mixed earnings. However, the Nasdaq managed to gain slightly on Friday, largely driven by Amazon.com (AMZN). Despite this, it was still a generally weak session, and investors are urged to exercise caution and hold cash for the time being.
There are four noteworthy big-cap tech stocks worth monitoring: Amazon, Meta Platforms (META), Microsoft, and ServiceNow. All four are close to buy points and have already released earnings reports, showing multiple quarters of accelerating growth.
On Monday, EV chipmaker On Semiconductor (ON) will announce its third-quarter earnings, followed by Arista Networks (ANET) on Monday night. Apple will release its earnings report on Thursday night. Apple stock has recently fallen below its 200-day moving average due to concerns about iPhone 15 demand, particularly in China.
The Federal Reserve will also meet this week, and it is widely expected that there will be no rate hike on Wednesday. Several policymakers have indicated that further action is unnecessary, especially with the recent surge in long-term Treasury yields. Fed chief Jerome Powell is likely to reinforce this message after the meeting announcement on Wednesday.
The week will conclude with the release of the October jobs report on Friday.
Meta stock is part of IBD Leaderboard, with ServiceNow stock on the Leaderboard watchlist. Microsoft stock is part of IBD Long-Term Leaders, and both Microsoft and Meta are included in the IBD 50. Microsoft and ServiceNow stocks are also part of the IBD Big Cap 20.
The article includes an embedded video that discusses the week’s market action and provides analysis on Microsoft stock, UnitedHealth Group (UNH), and Weatherford (WFRD).
[Dow Jones futures today](https://examplelink.com) will open at 6 p.m. ET on Sunday, alongside S&P 500 futures and Nasdaq 100 futures. It’s important to note that overnight movements in futures don’t always translate to the actual stock market session.
To stay updated on the latest market analysis and leading stocks, join IBD experts as they discuss the market on IBD Live.
The stock market correction has worsened in recent weeks. Although there was a brief attempt at a bounce early in the week, the indexes quickly fell lower. Ongoing tensions between Israel and Hamas likely contributed to this decline, as Israeli forces intensified their efforts in Gaza. Last week, the Dow Jones Industrial Average fell 2.1%, the S&P 500 index dropped 2.5%, and the Nasdaq composite declined 2.6%. The Nasdaq did experience a modest increase on Friday, but it remained below the 200-day moving average. This indicates that a new stock market rally attempt is underway, but further confirmation is needed to signal a convincing uptrend. It’s worth noting that not only did the Dow decline to a seven-month low on Friday, but the Russell 2000 also reached its lowest level since November 2020. The small-cap Russell 2000 fell 2.5% for the week. Additionally, various ETFs experienced declines, including the Invesco S&P 500 Equal Weight ETF (RSP), the VanEck Vectors Semiconductor ETF (SMH), the ARK Innovation ETF (ARKK), and the ARK Genomics ETF (ARKG). However, the SPDR S&P Metals & Mining ETF (XME) did rise 1% for the week, while the SPDR S&P Homebuilders ETF (XHB), the Energy Select SPDR ETF (XLE), the Health Care Select Sector SPDR Fund (XLV), the Industrial Select Sector SPDR Fund (XLI), and the Financial Select SPDR ETF (XLF) all experienced declines. Chinese stocks to watch include Microsoft, Meta, Amazon, ServiceNow, and Weatherford.
Microsoft stock rose 1% last week, reaching 329.81. However, it pulled back from its October 25 high of 346.20. Microsoft is currently the only Magnificent Seven stock above its 50-day moving average. The relative strength line for Microsoft stock is also at a new high. With a consolidation buy point of 366.78, investors may consider the Oct. 25 high as an early entry point. Microsoft reported a 27% increase in earnings for fiscal Q1 2024 compared to the previous year, along with a 13% revenue growth to $56.5 billion. This marks the third consecutive quarter of accelerated growth for the company. Microsoft exceeded expectations for cloud-computing services growth, setting it apart from Amazon and Google-parent Alphabet.
Meta experienced a surge in earnings of 168% in Q3, thanks to cost-cutting measures and an increase in ad sales. The company’s revenue also grew by 23% to $34.1 billion, signaling the third consecutive quarter of faster growth. Despite this, Meta’s stock fell by 3.9% to 296.73 last week. However, it did bounce back slightly on Friday, reaching just below the 50-day moving average. Meta is currently in consolidation, with buy points at either 326.20 or 330.54. A decisive move above the 50-day line could serve as an early entry point, although market conditions should be considered.
Amazon’s earnings skyrocketed by 236% in the last quarter, surpassing expectations. The company’s revenue also increased by 13% to $143.1 billion, marking the second consecutive quarter of accelerated growth. EPS has consistently risen sequentially over the past three quarters. Although Amazon Web Services revenue slightly missed expectations, the company is optimistic about its momentum into Q4 and the potential for AI-driven gains. Amazon’s stock saw a 6.8% jump on Friday, reaching 127.74 and rebounding from the 40-week line. It climbed just over 2% for the week. Investors may view this as a short consolidation and consider it a double-bottom base with a 134.48 buy point. Reclaiming the 50-day line would be a significant factor in confirming this.
ServiceNow stock rose by 2.1% last week, reaching 554.01 and remaining just below the 50-day line. The stock briefly reclaimed this level on Thursday. ServiceNow currently has a 607.90 buy point from a flattish double-bottom base, with Thursday’s high of 507.90 serving as an early entry point. The RS line for ServiceNow stock is already at a new high, indicating a bullish sign. Furthermore, ServiceNow reported a 49% increase in earnings with a 25% revenue growth, marking the second consecutive quarter of faster growth. The software giant also provided positive guidance on subscription revenue.
In the current market correction, it is advised to have a primarily cash position. Investors with long-term winners may continue to hold those stocks. However, it is crucial to establish a threshold for cutting or exiting a winning position at some point. It is not recommended to rush back into the market. Several consecutive days of strong performance are needed to indicate that the downturn may be ending. Morning bounces, like the narrow gains led by Amazon on Friday, are insufficient. There are only a limited number of stocks currently in a favorable position, so it is important to focus on those showing relative strength. Microsoft and ServiceNow are examples of stocks in this category, as well as some energy plays like Weatherford. The stocks and sectors that will lead the market in the next uptrend are still unclear, so it is crucial to continuously assess and stay engaged with market trends. Reading The Big Picture daily will help to stay synchronized with market direction and identify leading stocks and sectors. To stay updated with stock market updates and more, please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971, and Bluesky at @edcarson.bsky.social.
