Dow Jones futures rise as fears ease after Iranian drone and missile attack

Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures, as US officials urged Israel to exercise restraint after thwarting an Iranian drone and missile attack. The focus was on Tesla, Apple, Salesforce, and Goldman Sachs.

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Israel, the United States and other allies shot down 99% of about 350 Iranian drones and missiles. Saturday's attack caused minor damage to an Israeli military base.

Tehran had vowed to retaliate against the raid launched by Israel on its consulate in Damascus on April 1. The well-directed attack may have been an attempt to show a strong response while minimizing the risk of broader escalation.

President Biden and his fellow G7 leaders condemned the Iranian attack in a statement on Sunday, but called for calm. The Israeli war cabinet met to consider its options.

Goldman Sachs (A) announced first-quarter earnings that were much better than expected. Goldman stock rose strongly, indicating a move back above the 50-day line.

Charles Schwab (SCHW) views narrowly topped early Monday. Schwab stock fell slightly in premarket trading, trying to stay above a buy point.

Dow jones futures today

Dow Jones futures rose 0.6% versus fair value, with all Dow Jones components like Goldman, Apple and Salesforce present. S&P 500 futures rose 0.6%, and Nasdaq 100 futures rose 0.7%.

Crude oil futures fell 1%.

The yield on 10-year Treasury bonds jumped to 4.58%, with safe-haven flows reversing on Friday into US Treasuries.

Copper, aluminum and nickel prices rose due to new US and British sanctions against Russian metals.

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

This may be especially true as futures traders try to digest geopolitical news that continues to unfold.

The stock market sold off on Friday amid fears of an Iranian attack. The Nasdaq fell during the week, despite 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 IndexOil prices, or VIX, rose on Friday to the highest levels of the market's fear gauge since late October on concerns about Iran.

Nvidia tops 5 stocks near buy points

Tesla news

Tesla (TSLA(The company confirmed Monday that it will lay off more than 10% of its global workforce, or 15,000 jobs.)

Late Friday, Tesla 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.

TSLA stock lost more than 1% early Monday.

Other news

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. CRM stock was down modestly and Informatica was down slightly before the open.

apple (CameliPhone shipments fell 9.6% from January to March, according to IDC estimates on Sunday. AAPL stock fell.

Major earnings loom

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 (Avgo), 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.

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.

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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 the foundry giant reported better-than-expected first-quarter sales on April 10.

Taiwan Semi is benefiting from strong demand for artificial intelligence chips. TSMC's earnings and capital spending guidance 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. While Treasury yields fell on Friday, the weekly rise — and push back on Federal Reserve interest rate cuts — represents broader headwinds.

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 the 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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