Dow Jones futures fell slightly as President Trump confirmed he has selected a new The Fed Chairman
- Major indexes reclaimed their 50-day moving averages last week led by a 5.5% jump in small caps and a 4.9% rise in the Nasdaq.
- Actionable stocks flashing buy signals include Vertiv, JPMorgan, and Delta Air Lines while market leader Nvidia continues to lag.
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| Photo by Tomas Eidsvold on Unsplash |
Wall Street is holding its breath as December trading kicks off. Dow Jones futures retreated Sunday night alongside dip in S&P 500 and Nasdaq 100 contracts. This pullback comes after a potent holiday-shortened week where major indexes successfully reclaimed key technical levels. The immediate focus has shifted to Washington where President Donald Trump announced on Sunday that he has selected the next Federal Reserve chairman. While he declined to name the nominee immediately he promised an announcement would follow soon. Betting markets currently peg Kevin Hassett, the director of the National Economic Council, as the 72% favorite for the role.
The broader market just wrapped up a spectacular week of gains. The Dow Jones Industrial Average rose 3.2% while the S&P 500 climbed 3.7%. The tech-heavy Nasdaq Composite led the pack with a 4.9% leap. Crucially all these major indexes managed to climb back above their 50-day moving averages on Tuesday and held that ground. This technical recovery signals that institutional money is stepping back in to support the rally. Small caps also joined the party with the Russell 2000 jumping 5.5%. Even the equal-weight versions of these indexes showed strength which proves the rally is widening beyond just a few massive tech giants.
However not every sector is celebrating. Bitcoin took a hit over the weekend tumbling toward the $86,000 level after trading above $91,000 on Friday. Commodities told a different story. Crude oil futures rose more than 1% following expected production adjustments from OPEC+. Meanwhile yields on the 10-year Treasury note edged up slightly to 4.04% after briefly dipping below the 4% mark last week. Global economic data remains mixed as China’s factory activity unexpectedly contracted in November signaling continued weakness in the world's second-largest economy.
Investors have a busy week ahead centered on the cloud and AI sectors. The Amazon Web Services "re:Invent" conference kicks off Monday. This event often serves as a catalyst for Amazon stock which already jumped 5.7% last week. It could also move the needle for the broader AI ecosystem. Earnings reports from software heavyweights like MongoDB, CrowdStrike, and Snowflake are also on tap. These companies are currently trading near potential buy points and their results will test the market's appetite for high-growth software stocks.
Several individual stocks are flashing buy signals right now despite the futures dip. Vertiv, an AI infrastructure firm, bounced 12.45% last week to break a short downtrend. Banking giant JPMorgan rallied 5% finding support at its 50-day line. Energy is also showing life with Expand Energy clearing a "cup-with-handle" buy point after surging 6%. In the travel sector Delta Air Lines flew past a flat-base buy point gaining over 9% for the week.
One notable absentee from this rally is Nvidia. The AI chip leader fell 1.1% last week and hit a two-month closing low on Friday. Investors are growing concerned that major customers like Google and Broadcom are designing custom chips that could eat into Nvidia's margins. While the semiconductor sector as a whole surged almost 8% Nvidia remains stuck in the mud. This divergence suggests traders are rotating capital into other opportunities rather than blindly buying the biggest name in AI.
The strategy for the coming week involves cautious optimism. The market's surprising rebound is a signal to add exposure gradually. Leadership is broadening out to include medical, energy, and travel stocks so investors should cast a wider net. However, discipline remains key. If the major indexes undercut their 50-day lines again it will be time to step back and preserve capital.