Dow Jones Futures Loom After Iranian Drone and Missile Attack on Israel

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures, after Israel thwarted Saturday's drone and missile attack on Iran.

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Israel, the United States, and other allies shot down 99% of Iran's more than 300 drones and missiles. The attack caused minor damage to an Israeli military base.

Tehran had vowed to respond to the raid launched by Israel on April 1 on its consulate in Damascus, which resulted in the death of a senior general. Iran told the United Nations that the matter “can be considered closed.” The well-reported attack appeared to be an attempt to show a strong response while minimizing the risk of broader escalation.

President Biden, who condemned the attack, said he would seek a “diplomatic response” while Israel considers its options.

How will Dow Jones futures respond? Bitcoin fell on Saturday, falling from around $67,000 to a low of $60,908. It's currently under $64,000. Bitcoin's price fell 5.1% to $66,870.29 on Friday.

The stock market sold off on Friday amid fears of an Iranian attack. The Nasdaq fell even after hitting a record closing high on Thursday Nvidia (NVDA) Shares of Megacap and another AI company rebounded. The S&P 500, Dow Jones and Russell 2000 indexes had larger weekly losses.

the CBOE Volatility IndexThe market's fear index rose on Friday to its highest levels since late October on concerns about Iran.

Dow jones futures today

Dow Jones futures open at 6pm EST, along with S&P 500 futures and Nasdaq 100 futures.

Remember, an overnight move in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Nvidia tops 5 stocks near buy points

Other news

late on friday, Tesla (TSLA) Reduced the price of Full Self-Driving subscriptions to $99 per month from $199. Tesla has halted Cybertruck deliveries, according to online chatter over the weekend.

Salesforce.com (Customer relationship management) is in late-stage talks to buy a data management software maker Informatica (INFA), the Wall Street Journal reported Friday night.

Major earnings loom

Goldman Sachs (A) And Charles Schwab (SCHW) report early Monday. Goldman Sachs stock fell below its 50-day line on Friday, while Schwab stock remained in a buy zone.

Chip equipment giant ASML (ASML) and chip maker Nvidia Taiwan Semiconductor Co., Ltd (TSM) may be the two most important gains for this week. Their findings and guidance have major implications for the chip industry, including Nvidia, Broadcom (Afgo), L Research (LRCX), Applied materials (deaden) And Kosovo Liberation Army Company (KLAC).

All of these chip stocks have new rules or potential entries.

Nvidia stock is on IBD LeaderboardAnd SwingTrader Bahraini dinar 50. KLA stock is on the IBD Long-Term Leaders list. Nvidia, ASML, and Broadcom stocks are in the market IBD Big Cap 20.

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

Stock market pool

The stock market rally had a tough week due to a hot CPI inflation report and concerns in the Middle East, with Friday's losses erasing the bullish signs seen on Thursday.

The Nasdaq, which posted a record close on Thursday, fell 1.6% in stock market trading on Friday to end the week with a 0.45% loss. The index ended below the 21-day line but just above the 50-day and 10-week lines. It is also still trading with the big reversal day on April 4th.

The S&P 500 fell 1.55% for the week, below its 21-day level. The main index closed just above the 50-day line but below the 10-week line.

The Dow Jones Industrial Average fell 2.4% to its lowest level since late January, while the Russell 2000 small-cap index fell 2.9% to its lowest level since late February. Obviously both are less than 50 days.

Invesco S&P 500 Equal Weight Fund (RSP) fell 2.6%, breaking the 50-day line on Friday. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEWIt fell 1.7%, below the 50-day line to its worst levels since late February.

The price of crude oil fell 1.4% to $85.66 per barrel during the week, down from Friday's high of $87.67. Gold rose 1.3% to $2,356.20 an ounce, which is also far from its highest levels on Friday.

The 10-year Treasury yield jumped 12 basis points to 4.5%, with Thursday's peak of 4.59%, the highest level in five months. Investors see only a modest chance of a rate cut by the Fed in June and are only leaning toward a move in July.

The fear gauge in the stock market is rising

The CBOE Volatility Index rose 16.1% on Friday, reaching its highest levels since late October. Excessive fear can herald at least a short-term bottom. But the market's fear gauge is still far from the October highs, let alone the Covid highs.

Another measure of sentiment, esp Read Bulls vs Bearswas near excessively bullish levels heading into last week.

If tensions in the Middle East subside, there could be a rapid rally in stocks. Various indicators that the market is oversold also reinforce this hopeful state.

But the escalating conflict between Iran and Israel could lead to a significant rise in fears and a significant decline in stocks.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) Declined 1.7% during the week. VanEck Vectors Semiconductor ETF (Trait) decreased by 0.9%. Nvidia and Taiwan Semiconductor are SMH's largest holdings, with shares of ASML, Lam Research, KLA and AMAT as well.

Time the market with IBD's ETF market strategy

ASML, Taiwan half of profits

Dutch chip equipment giant ASML will report Wednesday morning, and Taiwan Semiconductor Corp. is scheduled to report early Thursday.

Analysts expect ASML's profits to decline in the first quarter, but expect a rebound in the second half. Earnings are expected to be nearly flat in Taiwan, although unofficial targets may be higher after the foundry giant reported better-than-expected first-quarter sales on April 10.

Taiwan Semi is benefiting from strong demand for artificial intelligence and other advanced chips. TSMC's guidance on earnings and capital spending will be key to the industry.

ASML stock fell 1.8% to 961.84 last week, near its 50-day and 10-week lines. It now has a flat base with a buy point of 1,056.34. Investors can use the trendline entry level around 1,000 to initiate a 10-week outside position, or the April 1 high of 1,002.66.

TSM stock rose 0.85% to 142.56 during the week. The stocks have been consolidating for a few weeks, but need another week to get a proper base. Investors can use the April 10 high of 148.43 as input if Taiwanese semi stocks rise on earnings.

Chip stocks

Nvidia stock rose 0.2% to 881.86 during the week. Shares rebounded from their 10-week line on Wednesday and Thursday before pulling back on Friday, still holding at 21 days. NVDA stock now has a flat base at 974 buy points. Investors can use Thursday's high of 907.39 as an early entry.

Broadcom has a consolidation base with a buy point for the handle. Lam Research and KLA have flat bases, according to Marketsorg. The applied material has a truly flat base, as well as a three-week textured pattern.

What are you doing now

After Thursday's strong move, expectations were that the market would continue to rise, especially the Nasdaq and leaders like Nvidia.

Instead, there was a significant pullback on Friday in anticipation of an Iranian strike against Israel. While Treasury yields fell on Friday, the weekly rise — and push back on Federal Reserve interest rate cuts — represents broader headwinds.

Whatever the reason, this is still a sideways market for the Nasdaq, and it is difficult to navigate. For the Dow Jones and Russell 2000 — and perhaps the S&P 500 — it looks more and more like a pullback or an emerging correction.

Investors should reevaluate after Friday and last week. If you take new positions on Wednesday and Thursday, you may need to reduce them or exit them completely.

It's still a good time to work on your watch lists. If the war drums die down and the upcoming earnings feedback is positive, you'll need to be ready. But you also have to be prepared to expand more aggressively.

As earnings season begins, know when your holdings will report, as well as when your key competitors, customers and suppliers will be present.

Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.

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