U.S. stock futures showed modest gains on Sunday evening, with Dow Jones, S&P 500, and Nasdaq futures all edging higher. The U.S. stock market will be closed on Monday in observance of Presidents Day, but global exchanges will remain open.
The previous week saw the stock market rally with heightened volatility, leaving the S&P 500 just shy of its all-time highs. Meanwhile, the Nasdaq and Dow Jones are not far behind, and several growth-focused ETFs are hitting fresh 52-week or record levels. However, small-cap stocks are still facing challenges.
Among the standout stocks, AI leaders Broadcom (AVGO) and Amazon (AMZN) are approaching key buy points. Axon Enterprise (AXON), which is also investing in AI technologies, flashed an early entry signal on Friday.
Nvidia (NVDA), having recovered from the January 27 sell-off, is regaining a key support level, though its consolidation pattern remains less than ideal.
Late Friday, Warren Buffett’s Berkshire Hathaway (BRKB) revealed new moves in its fourth-quarter portfolio, including purchases and sales. Notably, Berkshire continues to hold 300 million shares of Apple (AAPL), despite having sold Apple stock for four consecutive quarters. Berkshire shares are currently forming the right side of a base pattern.
Axon Enterprise is featured on IBD’s Leaderboard and SwingTrader, while Broadcom is included in the IBD 50 and the IBD Big Cap 20 list.
Dow Futures and Stock Market Update
Dow Jones futures opened above fair value, with S&P 500 futures gaining 0.1% and Nasdaq 100 futures rising 0.2%. Although the U.S. markets are closed Monday, Dow futures will continue to trade normally.
The rally seemed weak at the start of the week but reversed sharply, with the S&P 500 and Nasdaq nearly reaching record highs by Friday’s close. Markets reacted positively to economic data, viewing inflation and other indicators as manageable. In addition, President Trump’s announcement of new tariffs, which won’t take effect until April, didn’t seem to rattle investor sentiment.
The Dow Jones Industrial Average rose 0.55% for the week, just over 1% below its early December peak. The S&P 500 advanced 1.5%, nearly touching its all-time high, while the Nasdaq gained 2.6%, reclaiming the 20,000 mark and getting within 1% of its record levels. In contrast, small-cap stocks, as represented by the Russell 2000, closed essentially flat, once again encountering resistance at the 50-day moving average.
ETFs Performance
Among the growth ETFs, the Innovator IBD 50 ETF (FFTY) surged 6.9% last week, marking its best levels since June 2022. The iShares Expanded Tech-Software Sector ETF (IGV) rose 2%, while the VanEck Vectors Semiconductor ETF (SMH) gained 3.1%, driven by strong performances from Nvidia and Broadcom.
The ARK Innovation ETF (ARKK) jumped 6.8%, reaching its highest point since April 2022, further highlighting investor enthusiasm in growth stocks.
Conversely, sector ETFs had a mixed week. The SPDR S&P Metals & Mining ETF (XME) rose 1.2%, and the Energy Select Sector SPDR ETF (XLE) increased 1.7%, while the Health Care Select Sector SPDR Fund (XLV) fell by 1.1%. The Financial Select SPDR ETF (XLF) saw a slight decline, but Berkshire Hathaway’s substantial holdings in the ETF remained a key point of interest.
Individual Stocks to Watch
Axon Enterprise (AXON): Axon rose 0.6% for the week, with a notable 2.8% gain on Friday in above-average volume. The stock is currently forming a cup-with-handle base with a 689.54 buy point. Axon’s focus on AI and drones, along with upcoming earnings on February 25, make it a stock to watch for potential breakout opportunities.
Broadcom (AVGO): Broadcom rebounded 3.6% last week, recovering from the January 27 sell-off that affected many AI hardware stocks. The stock has consolidated for several days and is showing a handle with a 237.93 buy point. Broadcom, which has been a strong player in the semiconductor space, is reportedly exploring potential deals in Intel’s chip design business. Earnings are expected in early March.
Amazon (AMZN): Amazon saw a slight decline of 0.2% for the week but managed to hold above key support levels, including the 50-day and 10-week moving averages. While the stock has pulled back below a 233 flat-base buy point, a strong rebound above the 50-day line could present a fresh entry point.
Nvidia (NVDA): Nvidia stock surged 6.9% for the week, reclaiming the 50-day line for the first time since the sharp sell-off on January 27. The stock now has a base with a 153.13 buy point, though the chart pattern remains uneven. A potential early entry could come from a downward-sloping trendline, though caution is advised given the lighter volume on the rebound.
Conclusion
The market continues to show strength, particularly in growth stocks and AI-related sectors. While small caps remain under pressure, leading tech stocks such as Amazon, Nvidia, and Broadcom are setting up near key buy points. With the market poised near record highs, investors should stay alert for opportunities, especially as earnings reports and economic data continue to shape sentiment in the coming weeks.
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