Dow Jones futures were up slightly in after-hours trading, along with S&P 500 futures and Nasdaq futures.
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Markets Rise Strongly Again: Focus on NVIDIA, Shake Shack, and Tesla
The stock market posted a strong rally, with all major indexes above their 50-day lines. Strong retail sales and other economic data on Thursday, along with Walmart (WMT) earnings, strengthened the case for a soft landing and a small Fed interest rate cut.
Nvidia (NVDA) recovered from its 50-day record, providing an opportunity for early entry. Fellow Magnificent Seven stock Meta Platforms (META) continues to emit a buy signal. Tesla (TSLA) showed very aggressive entry, though with a caveat.
Shake Shack (SHAK) and GE Burnova (GEV) also cleared buy points.
The rise in the stock market is sending a clear message to investors that they should invest more, but gradually.
Applied Materials (AMAT) reported better-than-expected profits late Thursday night and its current-quarter outlook came in slightly ahead of expectations. AMAT shares were down slightly in late trading. The semiconductor equipment maker rose 5.1% in regular trading on Thursday, recovering above its 21-day moving average but still below its 50-day moving average.
Nvidia stock is on the Leaderboard and the IBD 50. Shake Shack stock and GE Vernova have joined SwingTrader. Shake Shack was the IBD Stock Of The Day on Thursday.
The video embedded in this article discusses Thursday’s bullish market moves and analyzes shares of Nvidia, Shake Shack, and Tesla.
Dow Jones Futures Today
Dow Jones futures rose 0.1% relative to fair value. S&P 500 futures and Nasdaq 100 futures rose 0.1%.
Remember that overnight movements in Dow futures or any other stocks do not necessarily translate into actual trading in the next regular stock market session.
IBD experts break down major stocks and markets on IBD Live.
Stock market rise
The stock market rally started strong and picked up steam, with the Nasdaq Composite Index surging just above its 50-day moving average and the S&P 500 and Russell 2000 both clearly above their 50-day lines.
The Dow Jones Industrial Average rose 1.4% in the stock market on Thursday, led by a rise in Walmart shares. The S&P 500 rose 1.6%. The Nasdaq Composite Index rose 2.3%. The small-cap Russell 2000 rose 2.45%. Both exchanges saw increased trading volume.
Thursday was a follow-through day that turned into an FTD-like session that confirmed the upside, following a follow-through day on Tuesday. Tuesday’s FTD came with some caveats as the bounce back from the lows of August 5 was relatively weak. However, the index remains strong with more stocks clearing key levels and sending buy signals to continue their rise.
The Nasdaq still needs to decisively break above its 50-day line, which may not happen anytime soon. After a string of up days, the market could pull back or pause. But it could be constructive and allow many stocks to lessen the V-shaped pattern and build handles.
U.S. crude oil prices rose 1.5% to $78.16 a barrel.
The 10-year Treasury yield rose 10 basis points to 3.92%, rebounding after generally strong economic data that helped ease recession fears earlier this month. The 2-year yield, which is more closely tied to Fed policy, rose 15 basis points to 4.1%, back above 4%.
IBD Live Podcast with Charles Harris: Trade Tesla with Your Head, Not Your Heart
ETF
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.3%, the iShares Expanded Tech-Software Sector ETF (IGV) gained 1.8%, and the VanEck Vectors Semiconductor ETF (SMH) surged 4.2%. Nvidia stock is SMH’s No. 1 holding, with AMAT stock also a notable holding.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) rose 4.8%, while the ARK Genomics ETF (ARKG) soared 5.4%. Tesla shares are a significant holding across Ark Invest’s ETFs, but Meta is an even bigger holding. Cathie Wood also owns a sizable stake in Nvidia.
The SPDR S&P Metals & Mining ETF (XME) rose 2%, the SPDR S&P Homebuilders ETF (XHB) rose 1.8%, the Energy Select SPDR ETF (XLE) rose 1.2% and the Health Care Select Sector SPDR Fund (XLV) added 0.6%.
The Industrial Select Sector SPDR Fund (XLI) rose 1.35%, while the Financial Select SPDR ETF (XLF) rose 0.9%.
Nvidia volatility spikes ahead of earnings release: how to profit from it
Nvidia stock
Nvidia shares rose 4.05% to $122.86, re-evaluating above its 50-day moving average. The stock has surged 17% this week, but the gains came on light trading volume. Investors could have used Thursday’s price action as a catalyst to enter early or initiate positions. Keep in mind that Nvidia is scheduled to report earnings in less than two weeks.
Tesla stock
Tesla shares rose 6.3% to 214.14, recapturing the 21-, 50- and 200-day lines. The stock also broke a steep downward trend. Investors could use Thursday’s rally as an opportunity to enter TSLA stock aggressively. However, with the stock ticker hidden, investors may want better-looking charts and stronger fundamentals.
MetaStock
Meta shares rose 2% to 537.33, just below its all-time high of 542.81 hit on July 8. With just one more day to go, it could be a new cup base for Facebook and the Instagram parent company. The stock is actionable from a variety of entries, including Tuesday’s move above a short-term high of 527.17 after the company reported Aug. 1 earnings.
GE Vernova stock
GE Burnova shares rose 2.5% to 188.82, breaking above a flat-base buy point of 185.50. The energy company, spun off from the former General Electric Co., went public in late March and quickly rose in value. GEV shares have rebounded strongly from an Aug. 5 low of 150.01.
Shake Shack Stock
Shake Shack shares rose 4.9% to 109.49, above a cup-handle base of 105.68. The handle began with an earnings gap-up on Aug. 1. The stock tested its 50-day line amid a global sell-off on Aug. 5, but quickly recovered.
What to do now
A rising stock market is sending a signal to investors to increase their investments. As long as the market and your holdings are doing well, you can continue making new or additional purchases, but do so gradually.
With the Nasdaq rebounding and NVIDIA climbing above its 50-day line, investors may want to shift their focus from defensive and defensive growth stocks to defensive growth and growth stocks, but that doesn’t mean defensive stocks can’t continue to do well.
Various sectors are performing well, so your watchlist should reflect that.
Read The Big Picture every day to stay on top of market direction, leading stocks and key sectors.
For stock market updates and more, follow Ed Carson on Threads at @edcarson1971 and on X/Twitter at @IBD_ECarson.
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