Dow Jones Futures Fall Ahead Of Fed Rate Hike Decision, Powell Comments; Tesla Stock Rallies
Dow Jones futures fell 190 points Wednesday ahead of the Federal Reserve’s rate hike decision, due in the afternoon. Social media company Snap (SNAP) plunged as much as 15% after falling short of revenue estimates. And Tesla (TSLA) stock briefly raced higher after Reuters reported the electric-vehicle giant plans to increase production at its Shanghai plant due to rising demand.
The Fed’s two-day policy meeting concludes Wednesday, with a rate policy decision at 2 p.m. ET, followed by comments from Fed Chair Jerome Powell. The Fed is widely expected to raise the federal funds rate by 25 basis points to a range of 4.50% to 4.75%. Another quarter-point increase is expected in March, which would bring the Fed funds rate very close to the Fed’s terminal rate of 5% to 5.25%. That’s where the Fed thinks it can pause rate hikes to let prior increases work their way through the economy.
ADP issued its employment report Wednesday, and it showed January payrolls came in at 106,000, below the 158,000 estimate and down from 235,000 in the previous month. ADP’s report is a precursor to Friday’s jobs report from the Labor Department.
Key Earnings Movers: AMD, Amgen
Advanced Micro Devices (AMD) rallied 2.6% after the company topped fourth-quarter targets late Tuesday, while guiding lower for its sales outlook in the current quarter. Dow Jones drug giant Amgen (AMGN) dropped 1% after its mixed fourth-quarter earnings report.
Early Wednesday, Peloton Interactive (PTON) jumped 5.6% after its fiscal second-quarter results.
Meta Platforms (META) will report after the market closes, while Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL) are scheduled for late Thursday.
Stock Market Today
Electric-vehicle leader Tesla erased early gains Wednesday morning after rallying as much as 2%. Dow Jones tech giants Apple and Microsoft (MSFT) were mixed ahead of today’s stock market open.
IBD Leaderboard stock Impinj (PI), Etsy (ETSY) and Wingstop (WING) — as well as Dow Jones stock JPMorgan Chase (JPM) — are among the top stocks to buy and watch, with the ongoing strength of the market rally.
Impinj is an IBD Leaderboard stock. Etsy was a recent IBD Stock Of The Day. Impinj and Wingstop were featured in this week’s Stocks Near A Buy Zone column.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Wednesday’s opening bell, Dow Jones futures fell 0.55% vs. fair value, and S&P 500 futures moved down 0.3%. Nasdaq 100 futures fell 0.1%, propped up by the rally in AMD shares and Tesla stock.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded flat and the SPDR S&P 500 ETF (SPY) dipped 0.25% early Wednesday.
The 10-year U.S. Treasury yield ticked lower to 3.48% Wednesday morning ahead of today’s Fed decision. The 10-year yield continues to trade below its 50-day line and just off its recent lows.
Oil prices crept higher after Tuesday’s modest advance. West Texas Intermediate futures gained less than 1% in morning trade, bouncing between $79 and $80 a barrel, as investors await Wednesday’s OPEC production decision.
Stock Market Rally
On Tuesday, the Dow Jones Industrial Average rallied 1.1%, and the S&P 500 moved up 1.5%. The tech-heavy Nasdaq composite advanced 1.7%.
Tuesday’s The Big Picture column commented, “Distribution days have been virtually nonexistent since Jan. 6. The S&P 500 currently shows three, but only one had the feeling of meaningful institutional selling. That was on Jan. 18, when the index fell 1.6% in higher volume. The Big Picture on Friday bumped up its invested percentage to a range of 60% to 80% when the Nasdaq surged above its 200-day line.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: JPMorgan
Banking giant JPMorgan is in the 5% buy range above a 138.76 flat-base buy point after a 0.6% rise Tuesday. The 5% buy zone tops out at 145.70. JPM shares traded down 0.4% early Wednesday.
JPM stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Impinj, Etsy, Wingstop
IBD Leaderboard stock Impinj ended Tuesday back above a 129.12 buy point in a cup base following its recent breakout move, as shares raced 3.9% higher Tuesday. The 5% buy area goes up to 135.58. PI stock was unchanged Wednesday.
Backstory: Impinj’s expertise lies in radio frequency semiconductors to identify, locate and authenticate items. While losing money in 2020, the company earned 25 cents per share in 2021. And annual earnings are expected to surge 284% to 96 cents per share this year.
Etsy is back above a 137.01 buy point in a cup with handle after Tuesday’s 2.1% rise. With the stock regaining the entry, the 5% buy area goes up to 143.86. Etsy shares were flat Wednesday morning.
Backstory: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that, in the last few years, has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.
Wingstop is rapidly approaching a 170.97 buy point in a lopsided cup base, with a 1.2% gain Tuesday. Keep an eye out for a potential handle to offer a lower entry. WING stock was inactive early Wednesday.
Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Columbia, Panama, Singapore and the U.K. The company added a net 40 stores in the prior quarter. Earnings are due out Feb 22.
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Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Base|
|Axon||(AXON)||189.72||Cup with handle|
|Etsy||(ETSY)||137.01||Cup with handle|
Source: IBD Data As Of Feb. 1, 2023
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Tesla stock rallied 3.9% Tuesday, rebounding after Monday’s dive. Despite their strong rebound since Jan. 6, shares are still below the 200-day line. And Tesla stock closed about 57% off its 52-week high Tuesday.
Shares looked to add to Tuesday’s gains, rallying as much as 2% Wednesday before erasing those gains in early morning trade. According to Reuters, the electric-vehicle giant plans to raise production at its Shanghai plant over the next two months to meet increase demand due to its recent price cuts.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares moved up 0.9% Tuesday, recovering a part of Monday’s 2% sell-off. Shares are still holding above their 50-day line following strong gains in recent sessions. The stock remains around 20% off its 52-week high. Apple will report its quarterly earnings late Thursday. AAPL stock moved down 0.1% Wednesday.
Microsoft stock climbed 2.1% Tuesday, bouncing off support at its 50-day line, which it regained last week. Shares remain 22% off the 52-week high. MSFT traded up a fraction Wednesday.
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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