Dow Jones Futures: Stock Market Movements Leading Up to Trump's Inauguration

Dow Jones futures are set to open on Sunday evening, coinciding with S&P 500 and Nasdaq futures. It's important to note that U.S. markets will be closed on Monday due to the Martin Luther King holiday. On the same day, Donald Trump will be inaugurated as President, where he is expected to sign several executive orders right from day one.

Last week, the stock market experienced a strong rally, with both the Nasdaq and S&P 500 indexes climbing back above their 50-day moving averages. This positive momentum was supported by falling Treasury yields and solid earnings reports, further boosting the major indexes. Bitcoin also saw a notable increase, nearing record highs as traders anticipated pro-crypto moves from the new administration.

Several stocks are signaling buying opportunities. Notable names include Tesla (TSLA), ServiceNow (NOW), Vertiv (VRT), Amazon.com (AMZN), and Broadcom (AVGO). Other actionable stocks include Goldman Sachs (GS), Energy Transfer (ET), Viking Holdings (VIK), and Quanta Services (PWR), along with several of their peers.

While Nvidia (NVDA) made modest gains, it remains below its 50-day moving average, showing a somewhat mixed performance. Overall, the market appears to be showing bullish signs, though this may be part of a choppy trading pattern seen in recent weeks.

Investors are encouraged to gradually increase their exposure to the market during this uptrend. Nvidia is featured on various watchlists, with Tesla also being closely monitored. Other stocks like ServiceNow, Goldman Sachs, and Amazon are found on different stock trading lists indicating their growth potential.

Anticipated Executive Orders from Trump

Donald Trump will be officially sworn in on Monday and is expected to swiftly issue around 100 executive orders on his first day. These orders are expected to address multiple areas, including energy policies, deportations, cryptocurrency regulations, and more. Given the impact these moves could have on Wall Street, various sectors and specific stocks may react significantly. However, it's worth noting that the markets may have already factored much of this news into current valuations.

On the same day, Trump conducted a call with Chinese President Xi Jinping discussing trade and other important matters, which was described as a "very good" conversation. This could potentially ease tensions surrounding the U.S.-China trade relations.

Upcoming Market Openings

Dow Jones futures will open at 6 p.m. ET on Sunday, alongside S&P 500 and Nasdaq 100 futures. With the U.S. stock and bond markets closed on Monday for the holiday, investors may not receive immediate feedback on Trump's initial actions until trading resumes on Tuesday.

Meanwhile, Bitcoin and other cryptocurrencies will continue to trade, as will international stock markets.

It’s essential for traders to understand that movements in Dow futures may not necessarily predict actual trading trends in the following regular stock market session.

Market Rally Overview

The stock market rally demonstrated significant strength over the past week, with the Dow Jones Industrial Average increasing by 3.7%, briefly surpassing its 50-day moving average. The S&P 500 saw a rise of 2.9%, and the Nasdaq composite climbed 2.45%, both moving above their 50-day lines.

The small-cap Russell 2000 index increased by approximately 4% but remains below its 50-day line. Two key ETFs, the Invesco S&P 500 Equal Weight ETF and the First Trust Nasdaq 100 Equal Weighted Index ETF, also showed positive results, gaining 3.9% and 3.7% for the week. While all major indexes are still operating within ranges established since December, the performance of leading stocks from various industries has been encouraging.

The 10-year Treasury yield dropped by 16 basis points to 4.61%, retracting from a recent high of 4.81%. Meanwhile, crude oil futures increased by 1.7% to $77.88 a barrel, though they had earlier peaked above $80 midweek. Bitcoin surged to just below its all-time high on Friday, trading at about $104,767.70 amidst buzz surrounding an anticipated pro-crypto executive order from Trump.

Sector Performance

Growth-oriented ETFs showed positive movement as well, with the Innovator IBD 50 ETF climbing 3.6% last week. The iShares Expanded Tech-Software Sector ETF rose by 3.2%, driven by significant holdings like ServiceNow, while the VanEck Vectors Semiconductor ETF increased by 4.5%. Tesla also boasts a major presence across various ARK Invest ETFs.

Furthermore, the SPDR S&P Metals & Mining ETF saw a rise of 5.6%, with the SPDR S&P Homebuilders ETF soaring by 8.1%. Other sectors such as Energy, Health Care, and Industrials also experienced gains, reflecting a broad-based recovery.

Tesla Stock Highlights

Last week, Tesla's stock rose by 8.05%, trading at $426.50, as it recovered from previous lows. It appears to be breaking out of a recent downtrend and could form a new base, with a potential target buy point around $488.54. With Tesla's earnings report due on January 29, much attention is on CEO Elon Musk’s updates regarding self-driving technologies and new vehicle models.

Identifying Buy Opportunities

Several stocks, including ServiceNow, Amazon, Broadcom, Quanta Services, and Vertiv, have shown promising entry points for investment. Stocks such as Goldman Sachs and Viking Holdings are currently breaking out.

The overall stock market rally is on a positive trend, with bullish signals evident over the past week. Investors should capitalize on current buying opportunities, enhancing their exposure gradually. It’s advisable to look for investments outside the typical tech and AI focuses, given the broader leadership throughout various sectors.

However, caution is advised—be prepared to pull back if market trends shift unexpectedly. The inauguration of Trump could become a pivotal event for market reactions following the holiday break.

As the earnings season advances, notable names such as Netflix (NFLX), and American Express (AXP) are set to report, which could influence market directions further.

For continued insights on market trends and individual stock performances, review daily summaries to stay informed on the market landscape.

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