Dow Jones futures chased tech futures lower Wednesday, pointing to further losses after a tough session on Tuesday. Tech stocks fell farthest in early trade, with chipmakers and software names taking hard early hits. The 10-year Treasury yield jumped ahead of this afternoon’s release of minutes from the Federal Open Market Committee’s March meeting.
Simply Good Foods (SMPL) reported its quarterly earnings results ahead of Wednesday’s open. Simply Good shares gained 1.5% in early morning trade.
Among the Dow Jones leaders, Microsoft (MSFT) and Salesforce.com (CRM) led the early declines, down around 2% apiece. Apple (AAPL) slipped 1.6% in today’s stock market. Chevron (CVX) headed the industrials, up 0.8% as oil prices bobbed higher.
Electric vehicle giant Tesla (TSLA) skidded 2% early Wednesday, on pace to add to Tuesday’s sharp losses.
As the stock market’s uptrend runs into increasing turbulence, Dow Jones financial leader American Express (AXP) — along with Alphabet (GOOGL), Broadcom (AVGO), IBD Leaderboard stock Darling Ingredients (DAR), Regeneron Pharmaceuticals (REGN) and Shell (SHEL) — are Wednesday’s top stocks to buy and watch.
Arista, Microsoft and Tesla are IBD Leaderboard stocks. Darling Ingredients and Tesla stock were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Fed Minutes
Before Wednesday’s open, Dow Jones futures lost 0.7% vs. fair value, and S&P 500 futures declined 1%. Nasdaq 100 futures sold off 1.6% vs. fair value in early morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) lost 1.6%, and the SPDR S&P 500 ETF (SPY) was down 1% ahead of Wednesday’s open.
On Tuesday, the 10-year U.S. Treasury yield surged to 2.55%, hitting a new 52-week high. Federal Reserve Governor Lael Brainard, widely regarded as one of the more dovish Fed members, said she expects rapid reductions to the Fed’s bloated balance sheet starting as early as May.
The 10-year yield continued higher Wednesday morning, jumping to 2.64%, its highest level since March 2019. Meanwhile, U.S. oil prices gained more than 1% Wednesday morning with West Texas Intermediate crude moving back above $103 a barrel.
Minutes from the Federal Reserve’s March policy meeting are due out at 2 p.m. ET Wednesday. On March 16, the Federal Reserve hiked its key interest rate for the first time since 2018. Policymakers revealed their expectation for a total of seven quarter-point rate hikes this year and at least three more in 2023.
Fed chief Jerome Powell said in his post-meeting news conference that the minutes will present the parameters of the Fed’s balance-sheet tightening, the unwinding of its $4.5 trillion in asset purchases during the pandemic.
Stock Market Rally
On Tuesday, stock market posted a disappointing performance, as the Nasdaq composite sold off 2.3%.
The Big Picture column commented, “The stock marked ended firmly in the red Tuesday as Wall Street got another reminder that the Federal Reserve is intent on fighting inflation aggressively with interest rate hikes and balance sheet reduction.”
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Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Four Dow Jones Stocks To Watch Now
Dow Jones Stocks To Buy And Watch: American Express
Dow Jones financial stock American Express is tracing a cup with handle with a 194.45 buy point. Shares declined 1.2% Tuesday, closing just above the 50-day moving average line. AXP shares were down 0.3% Wednesday morning.
Keep an eye on the stock’s relative strength line. Amid its recent ascent, the RS line is nearing its old highs, but does have some work cut out for it ahead of a potential breakout. The RS line measures a stock’s price performance vs. the S&P 500. The RS line should hit a new high on the breakout day or shortly thereafter to confirm the strength of stock’s breakout.
Four Top Growth Stocks To Buy And Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Alphabet, Broadcom, Darling, Regeneron, Shell
Tuesday’s IBD 50 Stocks To Watch pick, Alphabet, is nearing a 2,875.97 buy point in a cup with handle, according to IBD MarketSmith chart analysis. GOOGL shares are just 1% away from the entry amid Tuesday’s 1.2% loss. The FANG stock declined 1.5% Wednesday morning.
Broadcom tumbled 3.3% Tuesday, as the chip stock continues to hold above an early entry at 614.74. Shares have put in a new buy point, a handle entry at 645.41. AVGO shares were down 1.5% Wednesday morning.
IBD Leaderboard stock Darling Ingredients finished Tuesday just below an 80.31 cup-with-handle buy point. Shares were down 2.5% Wednesday morning.
Biotech leader Regeneron Pharmaceuticals remains in buy range above a 673.96 flat-base entry in the wake of a March 16 breakout move. REGN shares tested the buy point on March 23 before regaining the buy point on March 24. The 5% buy zone tops out at 707.66. The stock was flat Wednesday.
Oil-and-gas producer and Friday’s IBD Stock Of The Day, Shell, is within striking distance of a flat base’s 56.23 buy point despite Tuesday’s 1.6% drop. Shares jumped 1% Wednesday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla stock skidded more than 2% early Wednesday, threatening to add to Tuesday’s 4.7% decline. Shares of the EV giant are closing in on a cup base’s 1,208.10 buy point and are about 10% away from the latest entry. Meanwhile, Tuesday’s weakness could be the start of a proper handle that would offer a more risk-optimal entry.
The stock traded as high as 1,243.49 on Nov. 4. and ended Tuesday about 12% away from that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares slid 1.9% Tuesday, falling back below a double bottom’s 176.75 buy point. The 5% buy area goes up to 185.59. AAPL stock fell 1.5% early Wednesday.
Software leader Microsoft declined 1.3% Tuesday, as shares continue to build the right side of a new base formation. Microsoft shares traded 1.9% lower Wednesday 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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