Dow Jones Futures: Tough Market Rises; Palantir, Robinhood Top Earnings

Stock Market Rally and Key Earnings

The stock market rally experienced a mix of surprises in October, with some notable performances from key companies. Palantir (PLTR), Robinhood (HOOD), Advanced Micro Devices (AMD), AppLovin (APP), and Astera Labs (ALAB) are set to release earnings this week, adding to the excitement. Dow Jones futures, S&P 500 futures, and Nasdaq futures will open on Sunday evening, offering investors early insights into potential market movements.

Berkshire Hathaway (BRKB) reported a 34% increase in Q3 operating earnings compared to the previous year, surpassing expectations. The company's cash reserves reached a record $381 billion. However, BRKB stock has faced challenges since Warren Buffett announced his decision to step down as CEO at the end of the year.

Major stock indexes hit record highs on Wednesday, driven by strong earnings reports and other positive news. The week ended with modest to solid gains for the major indices, although small-cap stocks fell significantly due to weak breadth.

The ongoing stock market rally is seen as healthy but requires careful navigation. Investors are advised to consider adding exposure but remain prepared to quickly adjust their positions if necessary.

MongoDB (MDB) is currently in a buy zone, along with Eli Lilly (LLY) and Interactive Brokers (IBKR). Palantir, Robinhood, and AppLovin are featured on various watchlists, including the IBD 50 and the IBD Big Cap 20. MongoDB and Palantir are also highlighted on the SwingTrader list.

Market Performance and Futures

Dow Jones futures opened at 6 p.m. ET on Sunday, alongside S&P 500 and Nasdaq 100 futures. It is important to note that overnight trading activity does not always translate directly into the next day's market session.

Investors can join IBD experts for live analysis of leading stocks and market trends during IBD Live.

Weekly Gains and Weakness

The stock market rally saw weekly gains across major indexes, particularly the Nasdaq, which surged after a strong start on Monday. The Dow Jones Industrial Average rose 0.75%, the S&P 500 climbed 0.7%, and the Nasdaq composite jumped 2.2%.

However, the market showed signs of weakness in other areas. The small-cap Russell 2000 declined 1.4%, while the Invesco S&P 500 Equal Weight ETF (RSP) dropped 1.7%. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) dipped slightly, holding its 21-day line.

Many leading stocks demonstrated strength through earnings, but several top performers reversed course as the week progressed.

Treasury Yields and Oil Prices

The 10-year Treasury yield increased by 10 basis points to 4.10%. U.S. crude oil futures fell 0.85% to $60.98 per barrel last week.

AI Spending and ETF Performance

Big Tech companies have signaled that the AI spending boom will intensify, influencing Wall Street's strategies. Among growth ETFs, the Innovator IBD 50 ETF (FFT) rallied 2.3% last week. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.4%, with Palantir being a significant holding. The VanEck Vectors Semiconductor ETF (SMH) surged 3.4%, with AMD as a key component.

The ARK Innovation ETF (ARKK) fell 0.4%, and the ARK Genomics ETF (ARKG) declined 2.35%. Palantir, Robinhood, and AMD are among the top holdings in ARK Invest's ETFs.

Other ETFs showed mixed results. The SPDR S&P Metals & Mining ETF (XME) retreated 3.2%, while the Energy Select SPDR ETF (XLE) rose less than 0.1%. The Health Care Select Sector SPDR Fund (XLV) declined 1.2%, with Eli Lilly as the top holding. The Industrial Select Sector SPDR Fund (XLI) edged up 0.1%, and the Financial Select Sector SPDR ETF (XLF) sank 1.4%, with Interactive Brokers as a minor component.

Key Earnings and Buy Zones

Palantir, Robinhood, AMD, AppLovin, and Astera Labs are among the companies releasing earnings this week. Palantir and AMD are considered extended, while Robinhood and AppLovin are pausing within consolidations before their results. Astera Labs needs to surpass its 50-day line after hitting resistance on Friday.

MongoDB jumped 7.9% to $359.78, clearing a flat-base buy point of $344.85. The buy zone extends to $362.09. Eli Lilly rallied 4.5% to $862.86, rebounding from the 21-day line following strong earnings. Interactive Brokers rose 2.3% to $70.36, with the stock in a range from a cup-base buy point cleared on September 29.

What To Do Now

The stock market had a strong October, continuing a powerful rally from the April lows. However, the month was marked by both opportunities and challenges.

Depending on individual moves and trading styles, growth investors may have experienced varying outcomes. If struggling, it is advisable to maintain a modest investment stance until finding a clear path forward.

The market rally has become narrower, with potential for broader breadth or a pause. Let the market and your own stocks guide your next steps.

Stay updated with daily insights from The Big Picture to align with market direction and leading stocks and sectors.

Follow Ed Carson on X/Twitter at @IBD_ECarson for regular stock market updates.

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