Dow Jones Futures: Nvidia Reversal Is Wake-Up Call For AI-Led Market Rally; What To Do Now

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.

X

The stock market rally generally retreated last week. The S&P 500 and Nasdaq hit fresh all-time highs on Friday before reversing lower in an outside day.

Nvidia (NVDA) was the clear culprit Friday, staging a bearish reversal after the AI chip leader had become historically extended. That reversal hit the broader market but especially fellow AI stocks like Advanced Micro Devices (AMD), Taiwan Semiconductor Manufacturing (TSM), Arm Holdings (ARM) and Super Micro Computer (SMCI).

Nvidia’s reversal — which continued Friday night — could be a blip or a character change after a massive run. It’s definitely a wake-up call for complacent and euphoric investors.

It’s a time to be careful and review your portfolio, especially if you have heavy exposure to AI plays.

Square parent Block (SQ) and Brazilian brokerage XP Inc. (XP) flashed buy signals Friday. DraftKings (DKNG) is consolidating nicely.

Nvidia stock and Arm Holdings are on IBD Leaderboard, with SQ stock on the watchlist. Taiwan Semiconductor stock and Square-parent Block are on SwingTrader. Nvidia, DraftKings and ARM stock are on the IBD 50. Nvidia, AMD and Super Micro stock are on the IBD Big Cap 20. XP was Friday’s IBD Stock Of The Day, with Square Wednesday’s selection.

The video embedded in the article discusses the weekly market action and analyzes Nvidia, Square-parent Block and XP stock.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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

Stock Market Rally

The stock market rally has paused, generally retreating last week after a pair of hefty tech-led sell-offs.

The Dow Jones Industrial Average fell 0.9% in…