Dow Jones Futures Mixed as U.S. Markets Close; 7 Stocks Near Buy Points

Dow Jones futures were little changed Monday morning, while S&P 500 and Nasdaq futures were little changed. US markets will be closed on Monday.

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The stock market rally had a mixed week, despite Nvidia (NVDA) is soaring on soaring earnings and forecasts. The Nasdaq hit a record high, shrugging off Thursday's ugly downside reversal. The S&P 500 was little changed after briefly hitting record highs. The Dow and Russell 2000 posted solid losses as stocks in the consumer, real estate, materials and software sectors struggled.

Microsoft (MSFT) and fellow Dow giant Merck (MRK) are close to the buying points. Netflix (NFLX), Elie Lilly (THERE IS), TJX Cos. (TJX), Arista Networks (ANET) and Crocs (CROX) are in buy zones.

Investors can take advantage of the opportunities, but also should not feel pressured to increase their exposure.

Key gains

Next week, Salesforce.com (CRM), How are you (HOW ARE YOU), Dell Technologies (DELL), Abercrombie & Fitch (ANF), Costco wholesale (COST) and Pure storage (PSTG) are among the notable earnings reports.

Costco and Abercrombie & Fitch are in buy zones, while Cava, Dell and Pure Storage are all expanded. Dow giant Salesforce is struggling, but its report will be crucial for the enterprise software sector after Workday's weak forecast.

Early Friday, the Fed will release its main inflation gauge, the core PCE price index. Economists hope the core PCE price index rose a more moderate 0.2% in April. It is also possible that core inflation will be revised slightly downward in the first three months of the year.

Nvidia, Eli Lilly and Cava stocks are in the IBD rankings. TJX and Crocs stock are on SwingTrader. Microsoft stock is on IBD's Long-Term Leaders. Nvidia, Arista Networks and Netflix stocks are on the IBD 50. Netflix and Arista stocks are on the IBD Big Cap 20. Crocs was Friday's IBD Stock of the Day.

Dow Jones Futures Today

Dow Jones futures fell 0.1% from fair value. S&P 500 and Nasdaq 100 futures rose slightly.

U.S. stock markets are closed Monday for Memorial Day, but other stock markets around the world were open.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading during the next regular trading session.

Join IBD experts as they analyze top stocks and the market on IBD Live

Stock market rally

The stock market rally had a mixed week, with Nvidia and, to a lesser extent, Microsoft increasing the Nasdaq. But much of the market has seen weakness.

The Dow Jones Industrial Average fell 2.3% in last week's stock trading. The S&P 500 index closed slightly higher after briefly hitting a record high on Thursday.

The Nasdaq Composite Index rose 1.4%, its fifth consecutive weekly gain as it set all-time highs. The tech-heavy index rebounded Friday to a record close, but it was an inside day of Thursday's downward reversal.

Market breadth was low, with many sectors falling as well as a number of leading stocks. While Nvidia shares soared, other AI stocks were little changed or declined. That said, plenty of inventory is operating or building up, but not as abundant as a week earlier.

The small-cap Russell 2000 index fell 1.2%, testing the 50-day line on Thursday.

The Invesco S&P 500 Equal Weight ETF (RSP) fell 1.25%, also testing the 50-day line on Thursday.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) edged up 0.2%, lagging the Nasdaq 100's 1.4% gain.

The 10-year Treasury yield rose five basis points to 4.47% for the week.

U.S. crude oil futures fell 2.3% to $77.72 a barrel last week, but rose 1.1% on Friday.

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Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 1.6%. Microsoft stock is a huge IGV holding. The VanEck Vectors Semiconductor ETF (SMH) jumped 6.1%, with NVDA stock the dominant member.

The SPDR S&P Metals & Mining ETF (XME) fell 1% last week. The Global X US Infrastructure Development ETF (PAVE) edged up 0.3%. The US Global Jets ETF (JETS) fell 3.4%. The SPDR S&P Homebuilders ETF (XHB) fell 1.9%. The Energy Select SPDR ETF (XLE) slipped 3.8%.

The SPDR Health Care Select Sector Fund (XLV) fell 1.3%, even though Eli Lilly stock is a major XLV holding. The SPDR Industrial Select Sector Fund (XLI) fell 0.7%

Financial Select SPDR ETF (XLF) fell 2.1%

Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) fell 2.2% last week and the ARK Genomics ETF (ARKG) fell 3.4%.

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Stocks Near Buy Points

Microsoft stock rose 2.4% to 430.16 last week, closing just below a 430.82 buy point on a flat basis. Shares are already actionable after breaking a trendline around 427 on Tuesday.

Merck stock fell 1.3% to 129.48 last week, but is still near a stable base buy point of 133.10, according to MarketSurge analysis. Shares have been trading around the 21-day line and just above the 10-week average for the past few weeks.

Arista stock fell 4.2% to 306.48, slipping below the base entry of 307.74 but almost ending the week back in the buy zone. Shares fell as low as 289.41 on Thursday on concerns that Nvidia poses a significant competitive threat. But ANET stock rebounded from the 10-week line and rose slightly on Friday.

Actions in buying zones

Crocs stock jumped 4.4% Friday to 148.93, clearing a 146.79 cup base buy point. Stocks broke out after surprisingly strong earnings from peers Exterior decks (BRIDGE). On May 7, Crocs passed the 50-day mark with its own strong quarterly report. The Crocs' relative strength line hit a 52-week high on Friday, a bullish sign of a breakout. The RS Line, the blue line in the charts provided, tracks a stock's performance relative to the S&P 500 Index.

Netflix stock jumped 4.1% last week to 646.75, above a 639 cup buy point. The RS line for NFLX stock is just below a 52-week high.

Eli Lilly shares jumped 4.8% to 806.77, surpassing a 795.50 buy point Tuesday from a handle on a shallow double-bottom basis. Lilly reported strong late-stage trial results for the treatment of Crohn's disease.

TJX stock rose 1.9% to 102.17, just above a double buy point of 102.04. Shares jumped to a record 104.98 on Wednesday after earnings, but finished well off the highs.

What to do now

Last week shows why it's a good idea to gradually add exposure. Thursday's downward turn was painful for investors who were very aggressive until the top of the market. But for those who had been buying regularly since early May, Thursday was simply a disappointing session in a bullish streak.

The market recovery has softened somewhat, with various sectors struggling recently. Some of these might be temporary, constructive breaks, but others might be more important.

Investors could choose to add new purchases, depending on their exposure levels or risk tolerance. But if you invest heavily, you can sit back or offset new purchases with a few sales.

Now is definitely the time to prepare and stay engaged. Build your watchlists over the long weekend, but also get your exit strategies in place.

Read The Big Picture every day to stay in tune with market direction and leading stocks and sectors.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

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