Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures, after Treasury Secretary Scott Bessent claimed «substantial progress» following U.S.-China trade talks.
The stock market rally diped last week, with the major indexes still rangebound. However, many leading stocks broke out or flashed buy signals.
Tesla cleared an aggressive entry Friday. Palantir Technologies forged a new buy point.
Chinese giants Alibaba and Tencent are due this week, both near entries. Walmart kicks off retail earnings, with WMT stock in a buy zone. Two recent IPOs, Nvidia-backed data center play CoreWeave and aerospace systems firm Karman, also are on tap.
Palantir stock is on IBD Leaderboard. Palantir and CoreWeave stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures.
Dow futures are indicated solidly higher amid the positive comments following the U.S.-China trade talks.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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U.S.-China Trade Talks ‘Productive’
On Sunday, Treasury Secretary Scott Bessent claimed «substantial progress» after lengthy, «productive» weekend discussions in Geneva with China Vice Premier He Lifeng and other top Chinese officials. U.S. Trade Rep. Jamieson Greer said the U.S.-China trade talks were very constructive and said two sides «were able to come to an agreement» quickly.
The White House website touted «U.S. Announces China Trade Deal in Geneva,» but the actual release only included comments from Bessent and Greer.
Despite some hints, Bessent and Greer didn’t announce a deal Sunday, but said they will provide more details on the talks Monday.
On China’s side, Vice Premier He said the two sides agreed to establish a U.S.-China trade consultation mechanism.
The real question for investors is whether there will be big tariff reductions in the short run to de-escalate the trade war while more substantive negotiations go on.
President Donald Trump has imposed 145% tariffs on China. Beijing has responded with 125% tariffs on most American goods and rare earths export controls.
Various reports late last week suggested the U.S. might cut China tariffs from to 50%-60%, but President Trump posted Friday that 80% «seems right.» The 50%-60% range would likely be the outer limit to allow for substantial U.S.-China trade.
Trump did says he would leave the China tariff decision up to Bessent.
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Stock Market Rally
The stock market rally paused after big weekly gains in the prior two weeks and three of the last four.
The Dow Jones Industrial Average dipped 0.2% in last week’s stock market trading. The S&P 500 index sank 0.5%. The Nasdaq composite fell 0.3%. All are above their 50-day moving averages, but slightly below the 200-day line.
The small-cap Russell 2000 edged up 0.1%.
Leading stocks showed strength, with many breaking out or extending moves.
The 10-year Treasury yield rose six basis points to 4.37%.
U.S. crude oil futures jumped 4.7% to $61.02 a barrel last week.
Growth ETFs
The Innovator IBD 50 ETF rose 0.3% last week. The iShares Expanded Tech-Software Sector ETF edged up 0.2%, with PLTR stock a big holding. The VanEck Vectors Semiconductor ETF popped 2%.
ARK Innovation ETF fell 1.1% last week and ARK Genomics ETF plunged 6.8%. Tesla stock is the No. 1 holding across ARK Invest’s ETFs. Cathie Wood’s ARK also owns a big Palantir stake.
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Key Earnings
Alibaba and Tencent report this week, with both stocks around their 50-day lines within bases. Strong earnings moves could offer early entries. Alibaba and Tencent aren’t especially affected by the U.S.-China trade war, but may give insight into how Trump tariffs are impacting the Chinese economy.
Walmart stock fell last week, but held above a cup-with-handle buy point, according to MarketSurge. The Dow heavyweight may offer insight into Trump tariff impacts and its response.
CoreWeave stock will report for the first time as a public company. CRWV stock is in an IPO base. Investors could use Friday’s high of 56.82 as a potential post-earnings entry.
Space and aerospace play Karman will release its second post-IPO earnings report. Shares are flirting with record highs. A post-earnings move could offer a buy point.
Tesla Stock
Tesla stock popped 4.7% on Friday to 298.26, punching above its 200-day and several weeks of trading. That offered an aggressive entry above the May 2 high of 294.78.
Tesla stock has a lot of overhead, far below the Dec. 18 peak of 488.54.
Tesla stock is riding robotaxi optimism, with CEO Elon Musk sticking to plans for a June launch. The actual business is struggling, with Q1 earnings down 40%. Tesla told Austin workers on the Model Y and Cybertruck lines to stay home for Memorial Day week, Business Insider reported Friday.
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Palantir Stock
Palantir stock fell 5.6% to 117.30 last week, but rebounded from the 21-day line. PLTR stock now has a handle. The new cup-with-handle base buy point of 125.26 is only fractionally lower. But the pause is giving some time for the moving averages to try to catch up.
Palantir reported strong earnings May 5 that met views, while a seventh straight quarter of accelerating revenue growth beat. The AI data analytics giant also guided higher.
What To Do Now
The market rally is showing constructive action. The indexes held steady after big gains while many leaders offered buying opportunities.
Investors could have added more exposure last week.
The indexes decisively clearing the 200-day line would be a green light to keep adding exposure. A break below the 50-day line, especially for the Nasdaq and S&P 500, would be a reason to scale back positions.
Weekend U.S.-China trade talks could be a catalyst.
Earnings season is still on, including Alibaba, Walmart and CoreWeave.
Keep working on those watchlists. Have your exit strategies set up, just in case.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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