Futures Fall Ahead Of Fed Meeting

Futures Fall Ahead Of Fed Meeting

The Dow Jones Industrial Average rose Tuesday morning ahead of the Federal Reserve’s two-day meeting. The 10-year Treasury yield ticked lower following Monday’s new high.


BP (BP), Avis Budget Group (CAR) and Nutrien (NTR) all made sharp advances after late-Monday/early-Tuesday earnings reports.

Other key earnings movers ahead of the open included Arista Networks (ANET), Devon Energy (DVN), Diamondback Energy (FANG), Expedia (EXPE), Mosaic (MOS), NXP Semiconductors (NXPI) and Pfizer (PFE).

Arista slipped 4% in morning trade despite strong earnings results. Devon shares climbed about 5%. FANG shares rose almost 3%. Expedia tumbled around 9%. Mosaic slid around 3%. NXP shares moved down about 1%. Pfizer shares inched higher in early trade.

Twitter (TWTR) edged higher after Monday’s 0.2% rise. And electric-vehicle giant Tesla (TSLA) traded down nearly 1% Tuesday morning, still looking to add to Monday’s gains.

Among the Dow Jones leaders, Apple (AAPL) and Microsoft (MSFT) were down a fraction in today’s stock market.

Amid a new stock market rally attempt, Dow Jones leader Merck (MRK) — along with IBD Leaderboard stock Cheniere Energy (LNG), Exxon Mobil (XOM) and World Wrestling Entertainment (WWE) — are among Tuesday’s top stocks to watch.

Cheniere Energy, Microsoft and Tesla are IBD Leaderboard stocks. Exxon and Merck were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Today: Treasury Yields, Oil Prices, Fed Meeting

After Tuesday’s open, the Dow Jones Industrial Average moved up 0.1%. The S&P 500 lost 0.1%. And the tech-heavy Nasdaq dropped 0.4% in morning trade.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 0.4%. The SPDR S&P 500 ETF (SPY) lost a fraction.

The 10-year Treasury yield ticked down to 2.92% Tuesday morning after briefly topping 3% Monday. On Monday, the 10-year Treasury yield hit a new 52-week high and reached its highest level since December 2018.

Meanwhile, U.S. oil prices slid more than 1%. West Texas Intermediate crude dipped narrowly below $104 a barrel after disappointing first-quarter growth data in China pointed to weaker-than-expected energy demand.

The Fed’s two-day policy meeting kicks off Tuesday. That doesn’t mean much for Tuesday’s market action. But markets fully expect policymakers to announce a half-point rate-hike when this week’s Federal Reserve meeting wraps up on Wednesday at 2 p.m. ET. That’s expected to be followed by more of the same — if not an even bigger hike — in the next two Fed meetings. Any significant deviation to those expectations could stir a market reaction.

Stock Market Rally Attempt

On Monday, the major stock indexes hit new correction lows before reversing higher. While one day doesn’t make a trend, it was a step in the right direction. In technical terms, Monday was Day 1 of a new rally attempt. That means a follow-through day — which would launch a new confirmed uptrend — could occur as soon as Thursday.

Still, investors should remain on the defensive. That means avoiding new purchases until a follow-through day. For now, keep a watchlist of stocks that are holding up well in a down market. They could be some of the stock market’s leaders in the next uptrend.

Searching for the next uptrend’s leaders while the market is still correcting is a challenge. One helpful method is to use a stock’s relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.

Monday’s The Big Picture column commented, “After a brutal April, the month of May started with a bullish reversal as bargain hunters came into the stock market late Monday afternoon. What happens next could depend on the Federal Reserve.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Merck

Dow Jones drug stock Merck is below a cup-with-handle base’s 89.58 buy point following a brief breakout attempt last week. Shares dipped 1.2% Monday, ending about 2% below the latest entry. Merck stock was down nearly 1% Tuesday morning.

On a positive note, the stock’s relative strength line is at new highs, indicating big stock market outperformance during the current stock market correction.

Three Top Growth Stocks To Watch In The Current Stock Market Correction

Stocks To Watch: Cheniere, Exxon, WWE

IBD Leaderboard stock Cheniere Energy is one of the top stocks to watch after finding support around its 50-day moving average Monday. Shares are etching a flat base that shows a 149.52 buy point, according to IBD MarketSmith chart analysis. LNG shares inched higher Tuesday morning.

Last week, energy giant Exxon Mobil added a handle to a cup base, moving the correct buy point from 91.61 to 89.90. Shares reversed from early losses to climb 1.4% Monday. Exxon stock is about 4% away from the new entry, and shares were slightly lower early Tuesday.

World Wrestling Entertainment remains below its 50-day moving average despite Monday’s 2.4% climb. A decisive retake of the 50-day benchmark would be bullish for the stock’s prospects. Meanwhile, shares are just below a 60.94 buy point in a cup with handle. WWE shares edged higher Tuesday morning.

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla Stock

Tesla stock dropped almost 1% Tuesday morning, looking to add to Monday’s 3.7% gain. Shares remain below their 50- and 200-day moving averages following last week’s 13% dive.

Shares of the EV giant finished Monday about 22% away from a cup-with-handle base’s 1,152.97 buy point. The stock traded as high as 1,243.49 on Nov. 4 and is about 27% away from that all-time high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares reversed from sharp losses Monday, moving up 0.2%. The stock is still below its long-term 200-day line. Apple stock lost 0.2% Tuesday.

Software leader Microsoft rallied 2.5% Monday, recovering a part of Friday’s 4.2% skid. Shares are sharply below their 50- and 200-day lines. The stock closed around 20% off its 52-week high. MSFT shares moved down 0.5% Tuesday morning.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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