Dow Jones futures turned higher early Tuesday, while S&P 500 futures and Nasdaq futures fell modestly after President Donald Trump returned to the White House and as a lawmaker said a House panel wants to break up Big Tech companies such as Apple, Amazon.com (AMZN), Facebook (FB) and Google parent Alphabet (GOOGL).
On Monday, the stock market rally closed near session highs as President Trump said he would leave Walter Reed Medical Center after spending three days there for coronavirus treatment.
Semiconductor stocks were big winners Monday, with Marvell Technology Group (MRVL) breaking out. Nvidia stock, Advanced Micro Devices (AMD), Qualcomm (QCOM) and Taiwan Semiconductor (TSM) made solid gains and arguably are all actionable.
Nvidia (NVDA) touted chip advances at its GPU Technology Conference.
Meanwhile, Apple stock, Amazon and Facebook and reclaimed their 50-day moving averages, while Microsoft (MSFT) rallied to just short of the line. Google still has a ways to go to return to its 50-day.
President Trump Leaves Hospital
President Trump left Walter Reed Medical Center Monday evening after a three-day say, returning to the White House where he will continue to get coronavirus treatment. Just before leaving, Trump tweeted that he’ll “be back on the Campaign Trail soon!”
President Trump tweeted Monday afternoon that he would leave Walter Reed, saying: “Feeling really good! Don’t be afraid of Covid.”
I will be leaving the great Walter Reed Medical Center today at 6:30 P.M. Feeling really good! Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!
— Donald J. Trump (@realDonaldTrump) October 5, 2020
The Trump hospital news pushed the major indexes even higher to close near session highs. On Friday, the Nasdaq led Friday’s retreat on the news that President Trump had tested positive for the coronavirus.
The Dow Jones Industrial Average and S&P 500 index moved above last week’s highs, with the Nasdaq composite stopping just short. The S&P 500 and Nasdaq reclaimed their 50-day moving averages.
Nvidia, Microsoft and Taiwan Semiconductor stock are on IBD Leaderboard. Apple (AAPL) joined IBD SwingTrader on Monday. Microsoft stock is on IBD Long-Term Leaders. AMD stock, Qualcomm, Nvidia, Marvell, Taiwan Semiconductor and Microsoft are all on the IBD 50 list.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures retreated 0.1% and Nasdaq 100 futures lost 0.5%. Apple, Facebook and Amazon edged lower, providing a Big Tech drag on the futures.
Stimulus deal talks are set to continue today.
Alteryx stock skyrocketed 24% before the open, signaling a gap above its 50-day and 200-day lines. Alteryx (AYX), a database software maker, late Monday raised its Q3 revenue guidance to $126 million to $128 million vs. views for just over $113 million. Also, board member Mark Anderson succeeded Dean Stoecker as CEO, effective immediately. Stoecker will be Alteryx chairman.
Coronavirus cases worldwide reached 35.77 million. Covid-19 deaths topped 1.04 million.
Coronavirus cases in the U.S. have hit 7.67 million, with deaths above 215,000.
President Trump will finish his five-day course of remdesivir at the White House on Tuesday. The Gilead Sciences (GILD) antiviral has been shown to reduce hospitalization times.
Dow Jones giant Pfizer (PFE) and Germany’s BioNTech (BNTX) began a rolling submission to European regulators for their coronavirus vaccine candidate, which is currently in phase three trials. The European Medicines Agency has begun reviewing the Covid vaccine’s early trial data. The could speed up the approval process.
Pfizer rose modestly while BioNTech stock jumped.
Stock Market Rally
U.S. Stock Market Today Overview
Last Update: 4:30 PM ET 10/5/2020
The stock market rally rebounded strongly Monday, essentially erasing Friday’s losses on President Trump’s apparent quick recovery.
The Dow Jones Industrial Average rose 1.7% in Monday’s stock market trading after slipping just 0.5% on Friday. The S&P 500 index popped 1.8% and the Nasdaq composite tacked on 2.3%
The 10-year Treasury yield rose to its highest level in months, though it remains low. Housing stocks reversed lower but pared or even erased losses by the close.
Apple stock rose 3.1%. Microsoft climbed 2%, and Amazon stock added 2.4%. Facebook rose 1.8% and Google stock 1.9%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied 2.6%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.5%, with big holdings Microsoft (MSFT), Salesforce.com (CRM) and Adobe (ADBE) up modestly. The VanEck Vectors Semiconductor ETF (SMH) leapt 3.4% Taiwan Semi and Nvidia are the top two holdings of SMH, with Qualcomm, AMD and Marvell also part of the chip ETF.
Big Tech Breakup?
A Democrat-led House antitrust panel aims includes a “thinly veiled call to break up” Big Tech giants, according to Ken Buck, a Republican member of the panel. He said the report, still in draft, would limit tech giants to a “single line of business.” That would prevent Apple from owning the App Store. Amazon might not be allowed to own its marketplace, while its vast Amazon Web Services is a money spinner. Facebook owns several social media apps, including Instagram and WhatsApp. Google’s Alphabet controls the Google search engine and the Android operating system, as well as several, mostly money losing, ventures.
The House panel report news comes amid reports that the Justice Department and several states could file an antitrust suit vs. Google within days. Facebook could faces its own antitrust case by year-end.
Apple, Amazon and Facebook stock all fell a fraction early Tuesday. Google was not yet trading.
Marvell stock rose 4.4% to 41.52, just clearing a 41.44 buy from a flat base, according to Marketsmith analysis. The flat base is part of a base-on-base formation. The base-on-base pattern is especially bullish during weak or choppy markets; it shows a strong stock continuing to advance or hold its ground. The relative strength line for MRVL stock hit a record high and was trending higher during the brief market correction.
Marvell was Monday’s pick for IBD 50 Growth Stock To Watch.
Nvidia stock also jumped 4.4%, to 545.70. Investors still could buy the chip giant off the 10-week line, though it’s now 9% extended from that key level. After this week, NVDA stock would have a new base with a 589.17 buy point.
Nvidia began its virtual GPU event on Monday. CEO Jensen Huang touted his “age of AI” vision. He also announced several moves related to data centers, edge AI, collaboration tools and health care.
Qualcomm stock climbed 4.4% as well, closing at 120.52. Shares topped last week’s high and are just 5.4% above their 10-week line, offering early entries. Last week, Qualcomm rebounded from its 10-week line, clearing a short, downward-sloping trend line. QCOM stock has a flat base with a 124.03 buy point. The RS line is already at a record high.
Taiwan Semiconductor Stock
Taiwan Semiconductor stock leapt 4.6% to 84.54, rebounding from its 10-week line and offering a buying opportunity. TSM also moved back to an old 84.10 buy point. That entry technically is no longer valid after a failed breakout, but shares did find support at their 50-day line.
AMD stock jumped 5.3% to 86.15, rebounding yet again from its 10-week line and clearing last week’s high. Like rival Nvidia, AMD is on track to a have a base after this week, offering a 94.38 buy point.
Stock Market Trend Improves
The stock market rally is clearly driven by headlines, as the past two sessions have shown. Expect choppy action in the major indexes and leading stocks, as Trump health updates, stimulus deal talks, coronavirus vaccine hopes and election headlines swing the market.
But there is a world of difference between the current choppy market with an upward bias vs. September’s choppy, downward-trending market. When the stock market trend is your friend, making money in stocks is much easier.
This is a time to be buying stocks, but don’t rush in. Do your research, build your watchlists and let the stock market rally pull you further in.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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