Dow Jones Futures: Stocks Rise Ahead of Trump's Inauguration

Dow Jones futures are set to begin trading Sunday evening, in addition to S&P 500 and Nasdaq futures. The U.S. stock market will be closed on Monday due to the Martin Luther King holiday, coinciding with Donald Trump's presidential inauguration, where the new president is anticipated to announce several executive orders on his first day.

The stock market experienced a strong rally last week, with both the Nasdaq and S&P 500 moving back above their 50-day moving averages. Tame inflation data led to a drop in Treasury yields, while strong corporate earnings contributed to the rise of major market indexes. Bitcoin also made headlines by rallying to near record heights as speculation swirled around upcoming pro-cryptocurrency actions from Trump.

Several stocks indicated buy signals during this bullish market, including Tesla (TSLA), ServiceNow (NOW), AI-driven data center company Vertiv (VRT), Amazon.com (AMZN), and Broadcom (AVGO). Other actionable stocks include Goldman Sachs (GS), Energy Transfer (ET), Viking Cruises (VIK), and Quanta Services (PWR).

While AI giant Nvidia (NVDA) saw a modest rise for the week, its stock is still under the 50-day moving average.

The current market sentiment appears bullish; however, this may represent a continuation of the previous weeks' volatility. Therefore, investors are encouraged to gradually increase their market exposure.

Nvidia stock ranks on the IBD Leaderboard, with Tesla stock making the watchlist. Stocks from Viking, ServiceNow, Goldman, and Amazon are listed on SwingTrader, while Broadcom, Quanta Services, and Vertiv are part of the IBD 50. Vertiv, Broadcom, and ServiceNow stocks are also included in the IBD Big Cap 20.

Anticipated Executive Orders from Trump

Trump will officially take the oath of office on Monday and is expected to sign around 100 executive orders on his first day. These orders will likely address topics such as energy policies, immigration, cryptocurrency, and social media apps like TikTok.

The impact of these executive actions could significantly affect various sectors and individual stocks on Wall Street, although the markets may have already adjusted for some of this news.

On the eve of his inauguration, Trump engaged in a beneficial call with Chinese President Xi Jinping, discussing trade and other matters, potentially alleviating trade war tensions as he resumes his role in office.

Current Market Overview and Futures Outlook

Dow Jones futures will open at 6 p.m. ET on Sunday alongside the S&P 500 and Nasdaq futures. As U.S. stock and bond markets will be closed on Monday, American investors may not see immediate reactions to Trump's actions until the opening on Tuesday.

Bitcoin and other cryptocurrencies will continue to trade, as will global markets.

Investors should note that overnight movements in futures do not always reflect the actual market conditions at the next regular trading session.

The stock market rally showed positive momentum last week. The Dow Jones Industrial Average climbed 3.7%, briefly surpassing its 50-day moving average. The S&P 500 grew by 2.9%, and the Nasdaq composite rose 2.45%, both moving above their 50-day markers.

The smaller-cap Russell 2000 index surged about 4% but remains under the 50-day line.

The Invesco S&P 500 Equal Weight ETF (RSP) and the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) also experienced recoveries from their 200-day moving averages, gaining 3.9% and 3.7% respectively over the week. The RSP is just below the 50-day line, while QQEW has finally crossed this key threshold for the first time in a month.

All major indexes and their respective equal-weight ETFs are still maintaining ranges established since December.

On a bullish note, many leading stocks from various sectors have shown strong performances.

The yield on the 10-year Treasury fell by 16 basis points to 4.61%, retreating from a 52-week high of 4.81% reached earlier in the week.

U.S. crude oil prices increased by 1.7% last week, settling at $77.88 per barrel, although they dipped from midweek highs over $80.

Bitcoin surged to near $106,000, closing at approximately 104,767.70 by the end of the week. This rally was influenced by expectations of a pro-crypto executive order from Trump, which could create a crypto advisory council. The decline in Treasury yields and a general risk-on sentiment also contributed to Bitcoin's upward movement.

Top ETFs Performance

Among growth-oriented ETFs, the Innovator IBD 50 ETF (FFTY) rose by 3.6% over the past week. The iShares Expanded Tech-Software Sector ETF (IGV) increased by 3.2%, with notable holdings including ServiceNow. Meanwhile, the VanEck Vectors Semiconductor ETF (SMH) gained 4.5%. Nvidia and Broadcom are significant contributors to this ETF.

The ARK Innovation ETF (ARKK) saw a rebound of 3.7%, while the ARK Genomics ETF (ARKG) fell by 2.55%. Tesla remains a major holding distributed across various Ark Invest ETFs.

The SPDR S&P Metals & Mining ETF (XME) skyrocketed by 5.6% last week, while the SPDR S&P Homebuilders ETF (XHB) surged by 8.1%. Additionally, the Energy Select SPDR ETF (XLE) gained 6.3%, and the Health Care Select Sector SPDR Fund (XLV) saw a slight increase of 0.4%. The Industrial Select Sector SPDR Fund (XLI) jumped 4.9%. The Financial Select SPDR ETF (XLF) rose 6.15%, with Goldman Sachs being a notable holding.

Tesla's Weekly Surge

Tesla stock increased by 8.05%, closing the week at 426.50. This movement indicated a rebound from the 10-week moving average while breaking a recent downtrend seen in the stock. After another week, TSLA may establish a new base with a potential buy point of 488.54. Tesla's earnings report is due on January 29, raising expectations for updates regarding Elon Musk’s plans for self-driving technology and a more affordable EV model.

Elon Musk has been a long-time supporter and adviser to Donald Trump.

Other Stocks in Buy Zones

ServiceNow, Broadcom, Amazon, Quanta Services, and Vertiv stocks have indicated early buy opportunities within their respective bases. Stocks from Viking, Goldman Sachs, and Energy Transfer are establishing breakouts.

Overall, the current stock market rally is characterized by potent bullish signals from last week. While this could merely represent a short-term rise amidst a fluctuating market, the present action from the indexes and leading stocks appears positive.

Investors are encouraged to identify and act upon buying opportunities, gradually increasing their exposure. It's wise to seek investments beyond just AI and technology, given the wide array of leadership present right now.

Compile watchlists to highlight stocks and sectors showing strength and readiness for growth, but remain prepared to reduce holdings if the market starts to decline.

The inauguration of Trump could either lead to a buying or selling opportunity when the stock market reopens on Tuesday.

Looking ahead, the upcoming week marks an uptick in earnings reports, with companies like Netflix (NFLX), GE Vernova (GEV), GE Aerospace (GEV), and American Express (AXP) among the many significant names expected to report.

Keep abreast of market directions and key stocks by following daily updates.

market, stocks, Trump