After experiencing an abrupt sell-off in the stock market rally last week, the major indexes demonstrated resilience by rebounding and closing near weekly highs. Despite concerns, the Dow Jones Industrial Average rose by 0.2%, the S&P 500 climbed 0.75%, the Nasdaq composite gained 1.2%, and the small-cap Russell 2000 jumped 2.5%, hitting a 20-month high.
Key Market Insights
Pause or Pullback Considered Constructive: While the market rally continues to show strength, there is acknowledgment that a pause or pullback would be considered constructive. The Nasdaq and many leading stocks are appearing extended.
Magnificent Seven Stocks: Noteworthy stocks like Nvidia (NVDA), Tesla (TSLA), and Microsoft (MSFT) are in focus. Nvidia and Microsoft are on IBD Leaderboard, while Microsoft is on IBD Long-Term Leaders. Tesla has forged a new buy point.
Other Stocks to Watch: Samsara (IOT) is trading tightly, and Tenaris (TS), a specialty steel play, is flirting with a buy area. Nu Holdings (NU), backed by Warren Buffett, is positioned around several key levels.
Dow Jones Futures Today: Dow Jones futures showed a 0.2% climb, S&P 500 futures rose 0.2%, and Nasdaq 100 futures climbed 0.25%. The 10-year Treasury yield dipped to 3.89%.
Holiday Observance: The U.S. stock market was closed on Monday in observance of the Christmas holiday, aligning with most exchanges around the world.
Market Resilience: The stock market rally demonstrated resilience, with the major indexes rising for an eighth straight week.
