Dow Jones Futures Drop as U.S. Debt Loses Luster; Broadcom and Meta Scout Acquisitions

Dow Jones futures dropped on Sunday night, alongside S&P 500 futures and Nasdaq futures, following Moody's downgrade of the U.S. sovereign debt rating on Friday.

Last week saw a robust upturn in the stock market as tensions between the U.S. and China eased, shifting sentiment back toward enthusiasm for AI investments from earlier concerns. This positive shift caused all key indices to confidently surpass their 200-day moving averages.

The S&P 500 and Nasdaq have now moved into power trend Indicating a particularly robust market upswing. While a powerful trend doesn’t serve as a standalone buying indicator, it suggests being notably committed and more inclined to maintain high-growth investments.

Kindly view the video on Investors.com where upcoming retail and software earnings will highlight tariffs and artificial intelligence.

Broadcom , Construction Partners , Meta Platforms and Sprouts Farmers Market are setting near buy points .

Earnings season continues , with Snowflake , TJX Cos. and Trip.com Among the investments, retail and China travel seem to be promising near-term opportunities.

Broadcom's stock is currently performing as follows: IBD Leaderboard Watchlist. The stock for Sprouts is being monitored. IBD 50 Both of them are on the IBD Big Cap 20 Construction Partners was mentioned on Friday. IBD Daily Stock Pick .

Dow Jones Futures Today

Dow Jones futures dropped by 0.6% from their expected values. The S&P 500 futures decreased by 0.7%, and the Nasdaq 100 futures also went down by 0.7%.

The 10-year Treasury yield rose slightly to 4.48%.

Bitcoin rose above $106,500 following trades slightly over $104,000 by 4 p.m. ET.

Keep in mind the rapid movement from last night. Dow futures And this does not automatically lead to real trades in subsequent regular sessions. stock market session.

Moody's Lowers U.S. Sovereign Debt Rating

Nevertheless, Moody's Investors Service lowered the U.S. government credit rating from AAA to AA1, stating that this downgrade "indicates the rise over more than ten years in government debt and interest payment ratios to levels considerably above those of comparable-rated sovereign entities."

This occurred over a year following Moody's downgrade of the U.S. debt rating outlook to negative. Previously, both Fitch Ratings and S&P Global Ratings had downgraded the highest credit ratings assigned to the U.S. government.

On NBC’s “Meet The Press” on Sunday, Treasury Secretary Scott Bessent stated, “Moody's is considered a trailing indicator.” He attributed the present financial difficulties to the Biden administration and emphasized, “Our aim is to reduce expenditures.”

A major tax and spending bill, being crafted by the Republican-controlled Congress, is anticipated to substantially increase federal deficits which are currently elevated and projected to continue rising sharply.

Moody's downgrade might not significantly affect U.S. borrowing costs, yet it serves as a clear indication that America’s worsening financial situation over time could eventually lead to severe repercussions.

Participate with IBD specialists as they examine top-performing stocks and the overall market on IBD Live.

Stock Market Rally

Once more, the stock market experienced significant weekly growth. Most of this progress occurred at the beginning of the week; however, both the indices and top-performing stocks demonstrated minimal inclination to rest, not to mention experiencing any decline.

On Monday, the U.S. and China reduced tariffs. Earlier on Friday, President Donald Trump mentioned that the U.S. plans to establish tariff levels for other trading partners within the coming two to three weeks, noting that the administration does not have the capability to finalize agreements with all these countries simultaneously.

The Dow Jones Industrial Average increased by 3.4% over the previous week. stock market trading The S&P 500 index rose by 5.3%, the Nasdaq Composite climbed up by 7.15%, and the small-cap Russell 2000 increased by 4.5%.

The Dow Jones clearly rose above its 200-day moving average, despite UnitedHealth It was quite tedious. The S&P 500 and Nasdaq surged past that crucial threshold. Additional prominent stocks either broke new ground or indicated buying opportunities, with those that had moved first still ascending.

The 10-year Treasury yield increased by six basis points to reach 4.44%, retreating from a four-month peak of over 4.5% at close.

U.S. crude oil futures or rose 2.4% to $62.49 a barrel last week.

Stock Market Power Trend

A powerful momentum has started on the S&P 500 and Nasdaq, fulfilling all four requirements.

The minimum value has been above the 21-day exponential moving average for at least 10 consecutive days. The 21-day EMA has remained above the 50-day simple moving average for a minimum of five days. Additionally, the 50-day line shows an upward trend. Furthermore, the market finishes the day with gains.

A power trend typically concludes when the 21-day line crosses back underneath the 50-day line.

ETFs

In the realm of growth exchange-traded funds, the Innovator IBD 50 ETF saw an increase of 5.6% over the past week. The iShares Expanded Tech-Software Sector ETF experienced a rise of 5.5%, whereas the VanEck Vectors Semiconductor ETF jumped significantly by 10.3%. Among these, Broadcom stands out as a major component within the Semiconductors Select Sector SPDR Fund (SMH).

The ARK Innovation ETF surged by 13.4% over the past week, while the ARK Genomics ETF saw an increase of 3.3%.

The SPDR S&P Metals & Mining ETF gained 1.8% over the past week. The Global X U.S. Infrastructure Development ETF surged 5.6%, while the U.S. Global Jets ETF rose 4.3%. Additionally, the SPDR S&P Homebuilders ETF recovered 4.7%, and the Energy Select SPDR ETF increased by 3.7%. In contrast, the Health Care Select Sector SPDR Fund saw only a slight gain of 0.3%.

The Industrial Select Sector SPDR Fund increased by 5.6%, whereas the Financial Select SPDR ETF rose by 3.5%.

Timing The Market Using IBD's ETF Strategy

Stocks Near Buy Points

Last week, Broadcom’s stock surged by 9.8%, reaching $228.61, marking four consecutive gains and five increases within the latest six sessions. The AVGO stock is moving closer towards a potential buy point at 251.88. Over the past several days, the shares have remained relatively stable as they might be forming a handle which could adjust the buy point downward. This consolidation phase is occurring slightly beneath certain resistance levels around the 238 mark.

After initially plunging beginning in late January due to expenditure concerns sparked by DeepSeek, Broadcom is now capitalizing on the surge in demand for AI hardware. Nvidia Last week plans to sell over 18,000 advanced processors to Saudi Arabia, which stands as one of multiple favorable factors driving artificial intelligence advancements.

The share price of Construction Partners increased by 5.6%, reaching $101.14, which is slightly under $103.69. cup-base Purchase trigger. The ROAD stock rose above the entry level on Tuesday but did not end within the buying range. Despite this, earnings remain robust with sales growth speeding up over the last two quarters to reach 54% in the quarter ending in March.

Meta's stock surged by 8.1%, reaching $640.34 last week, yet it appears to be forming a possible handle. Currently, the shares have a 740.91 purchase point within a cup formation that is approximately 35% deep, as indicated. MarketSurge .

Shares of Sprouts surged 4.3%, reaching $168.68, after testing a support level at the 10-week trendline. The price climbed above its 21-day moving average on Friday and also broke through a downward trend within a handle formation, providing an initial buy signal. The target for SFM stock stands at 178.16. cup-with-handle Purchase point. The natural foods retailer has reported multiple consecutive quarters of increasing profits and revenue growth.

All these stocks dropped slightly on Friday evening after the U.S. debt was downgraded.

Top S&P 500 Titans, With Tesla’s Key Competitor at Forefront, Highlight 5 Stocks Close to Purchase Levels

What To Do Now

The surge in the stock market has initiated a strong upward trend. This is an opportune moment to have significant investments, possibly complete investment, showing greater readiness to purchase high-growth stocks with aims of holding onto them for substantial profits.

Avoid being careless. Do not pursue overextended shares. There will likely be a significant reversal soon. Additionally, many solid stocks remain in attractive buying zones or forming patterns such as Broadcom and Meta. Hence, strengthen your watchlist.

Read The Big Picture Each day to remain aligned with the market trend and prominent stocks and industries.

Kindly follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson For stock market updates along with additional information.

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