25 new purchases after the best week of the year; Now Powell is up

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. The Federal Reserve will take center stage in 2020 with policymakers set to cut rates for the first time since the Covid crisis.

The stock market rally saw a dramatic revival with the S&P 500 and Nasdaq Composite posting their best weekly gains of the year to reclaim their 50-day lines after a selloff the previous week. The S&P 500 and Dow Jones are near all-time highs. A large number of leading stocks flash buy signals.

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Investors are excited about Fed rate cuts and artificial intelligence, two big catalysts for this year's stock market rally.

Nvidia ( NVDA ) CEO Jensen Huang said demand for the company's AI chips is “incredible” and that production of its next-generation Blackwell chips is in full swing. Nvidia's stock rose, picking up other AI plays and the broader market.

Arista Networks (ANET), Interactive Brokers (IBKR), Shift4 (four), Doordash (DASH), Royal Caribbean (RCL), Meta platform (meta), the sea (SE) and Microsoft (MSFT) is flashing buy signal. A total of 25 buy stocks highlighted in this article all have peers that are also actionable or close to being so.

This has been a time for investors to buy, even as the Fed watches the meeting.

Nvidia, DoorDash and Meta Stock are on the IBD leaderboard. Interactive Brokers Stocks Swingtrader. Microsoft stock is on IBD's long-term leaders. Nvidia, Arista Networks, Meta Platform and Royal Caribbean stocks are in the IBD 50. Arista stock is in the IBD Big Cap 20. Shift4 stock is among the IBD sector leaders.

Interactive Brokers was the IBD stock of the Friday. DoorDash stock was Thursday's pick. C stock was elected on September 6.

Fed meeting September 17-18: How much will Powell cut rates?

The Federal Reserve meets Tuesday-Wednesday. An official statement is due Wednesday at 2 pm ET Fed chief Jerome Powell will speak at 2:30 pm ET.

It is a foregone conclusion that the Fed will cut interest rates. But markets are divided on whether the first Fed rate cut will be 25 basis points or 50. So it's going to be semi-surprising either way.

With more than 50% odds of 125 basis points, markets have almost fully priced in a 100 basis point cut by the end of the year.

Fed policymakers will release an updated “dot plot” indicating where they think rates are headed, along with economic projections. Investors will pay close attention to Powell's comments for clues about the pace of future Fed rate cuts.

A small Fed rate cut or Powell indicating that future moves will be gradual could depress markets.

Dow Jones Futures

Dow Jones futures open at 6 pm ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Note that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

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Stock market rally

The stock market's rally last week was a positive disappointment after the previous week's ugly, expectations-defying sell-off.

The Dow Jones Industrial Average popped 2.6% in last week's stock market trading. The S&P 500 index jumped 4% and the Nasdaq Composite vaulted 5.95%, their best weekly gain of the year. The small-cap Russell 2000 jumped 4.4%.

On Friday, September 6, the Nasdaq closed decisively below its August 13 follow-through daily low, a very bearish sign. The S&P 500 didn't, but wasn't far off.

Stocks bounced back this past week, but Wednesday was the turning point. After selling off to start the session, indexes reversed strongly higher, with the S&P 500 closing above its 50-day high. The Nasdaq followed on Thursday.

On Friday, the Dow and S&P 500 moved just below record highs. The Russell 2000 and S&P MidCap 400 rose above those key levels on Wednesday morning after nearly touching their 200-day lines.

A large number of leading stocks, including several technology names, ran into buying positions during the week

The 10-year Treasury yield fell 6 basis points to 3.65%. U.S. crude oil futures rose 1.45% to hit a 52-week low at $68.65 a barrel on Tuesday.

ETF

Among growth ETFs, Innovator IBD 50 ETF (FFTY) rose 6.95% last week. The iShares Expanded Tech-Software Sector ETF ( IGV ) jumped 4.8%, with Microsoft stock a major holding. The Vanneck Vector Semiconductor ETF ( SMH ) rose 10.2%, with Nvidia stock the dominant component.

The SPDR S&P Metals & Mining ETF (XME) rebounded 8.2%. The US Global Jets ETF (JETS) rose 3.7%. The SPDR S&P Homebuilders ETF (XHB) rose 6.5% The Energy Select SPDR ETF (XLE) gained 3.7% and the Healthcare Select Sector SPDR Fund (XLV) added 1.4%.

The Industrial Select Sector SPDR Fund ( XLI ) advanced 3.7%. The Financial Select SPDR ETF ( XLF ) rose 0.5%.

Time the market with IBD's ETF Market Strategy

Arista Stock

Arista Networks stock rose 14.5% last week to 359.76. On Wednesday, its shares cleared the 50-day line and they cleared a trendline, offering an early entry on Thursday. On Friday, ANET stock rose from an awkward handle to a high of 358.68 buy points.

Related stocks: Co-workers play AI hardware Broadcom (AVGO) and Taiwan Semiconductor (TSM) cleared the initial entry. Nvidia stock vaulted 15.8% last week, offering an aggressive entry above the 50-day.

Meta stock

Meta stock rose 4.9% last week to 524.62. Shares recovered from their 50-day on Wednesday, then rallied as they cleared the 21-day line and minor downtrend. Meta stock has a 542.81 buy point. Investors can use 544.23 as an alternative entry.

Related stocks: Online advertising game Trade Desk (TTD) rebounded bullishly from the 10-week line last week and recovered a buy point from a very V-shaped consolidation.

Interactive Stock Broker

Interactive Brokers' stock rose 4.5% to 128.07. Shares briefly cleared a 128.98 handle buy point on Friday, backing off but still offering an early entry. IBKR stock hit 50-day support on Wednesday.

Related stocks: Stifel Financial (SF) and Piper Sandler (PIPR) offers early entry, while Robinhood Markets (Hood) is broken.

Shift4 stock

Shift4 stock jumped 9.5% to 82.92, rebounding from a 10-week line. Shares broke a bearish trend on Thursday. On Friday, the four stocks topped 84.26 cup-with-handle buy points intraday.

Related stocks: Restaurant Payment Competitors toast (TOST) and buy now, pay the expert later Confirm holdings (AFRM) actionable. MasterCard (MA) is in a traditional buying region.

DoorDash Stock

DoorDash stock rose 6.3% last week to 131.35, clearing a 131.21 cup-y-handle buy point on Friday, according to MarketSurge. Shares were already in action after rebounding from the 21-day line and breaking the handle's downtrend.

Related stocks: Instacart is the parent Maple beer (CART) is just below a handle buy point and is logically functional. Uber ( UBER ) broke above its 50-day and 200-day lines on Friday, suggesting an aggressive entry.

Royal Caribbean Stock

Royal Caribbean stock rose 7.3% to 167.96, teasing a 169.47 cup-with-handle buy point on Friday. The RCL stock is effective from breaking the trendline from the top of the base and handle. The cruise line giant reinstated its 21-day and 50-day lines on Wednesday.

Related stocks: The online travel giant Booking Holdings (BKNG) on the verge of breakout. United Airlines (UAL) is in a buy zone.

Sea stock

Ocean stocks rose 5.2% to 81.18. The Southeast Asian e-commerce and gaming giant held its 76.60 buy point and 21-day line from the previous week. This week, shares rallied from the 21-day line and broke a short downtrend. Technically, the sea stock is slightly stretched, but still workable.

Related stocks: South Korean e-commerce giant Kupang (CPNG) is in a buy zone

Microsoft stock

Microsoft stock rebounded 7.2% to 430.59, above the 200-day line and then the 50-day, as well as a short-term high. Although below the 468.35 consolidation buy point, MSFT stock is effective as a long-term leader here. The relative strength line, though still recovering, is above its 50-day moving average.

Related stocks: Service now (Now), another software giant with generative AI offerings for end users, is in a buy zone. Amazon.com (AMZN), a Microsoft Azure competitor with Amazon Web Services, is effective after a 50-day clearing.

These Bitcoin miners are moving to AI. They have a big advantage.

what to do now

The stock market rally is back. Major indices look strong and top stocks look even better.

Investors should have taken the opportunity to buy, especially in the last few days. If the market and your holdings are doing well, keep doing it.

While AI and other tech growth stocks are back in play, many other sectors look strong. This should be reflected in your watchlist and your portfolio.

But the Fed meeting and Powell's comments are a big risk event.

Read The Big Picture daily to stay in tune with market direction and leading stocks and sectors.

Please follow Ed Carson at @edcarson1971 and on X/Twitter @IBD_ECarson For stock market updates and more.

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