Dow Jones futures were higher early Tuesday as the stock market continues to fall in the wake of Friday’s plunge – sparked by aggressive talk from Federal Reserve Chair Jerome Powell – heading into the last two sessions of August. The Labor Department’s jobs report for August will be released Friday morning.
Stock market today
On Monday, the Dow Jones Industrial Average fell 0.6%, while the S&P 500 lost 0.7%. The tech-heavy Nasdaq composite fell 1%. And the small-cap Russell 2000 fell 0.9%.
Of the exchange-traded funds, the Nasdaq 100-tracker Invesco QQQ Trust (QQQ) fell 1% and the SPDR S&P 500 (SPY) fell 0.7%.
Overview US stock market today
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Last update: 4:40 PM ET 8/29/2022
EV giant Tesla (TSLA) slipped 1.1% on Monday. Among Dow Jones leaders, Apple (AAPL) and Microsoft (MSFT) fell 1.4% and 1.1% respectively in today’s stock market.
In the ongoing weakness in the stock market, Arista Networks (A NET), Costco (COST), GlobalFoundries (GFS) and Ulta Beauty (ULTA) — as well as Dow Jones stocks Chevron (CVX) and McDonald’s (MCD) — are among the top stocks to buy and watch. Keep in mind that the increased volatility of the market is a good reason for investors to be more defensive.
Costco is an IBD Leaderboard stock in the wake of a recent breakout, while Chevron and Ulta Beauty featured in the Stocks near a buy zone column this week.
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Dow Jones Futures Today: Government Bonds, Oil Prices, Jobs Report
Prior to Tuesday’s opening, Dow Jones futures were up 0.7% relative to fair value, and S&P 500 futures gained 0.8%. Nasdaq 100 futures recovered 1.1% from fair value. Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
The 10-year government bond yield rose to 3.11% on Monday, extending last week’s gains. The 10-year Treasury yield closed at its highest level since June 28. Meanwhile, US oil prices rose more than 4%, while West Texas Intermediate futures traded around $97 a barrel.
The Labor Department’s jobs report for August will be released Friday morning. The US economy is expected to add 293,000 jobs in August — according to Econoday estimates — less than the 528,000 increase in July. Average hourly wages in August are expected to rise 0.4% from the previous month and 5.2% year over year.
What to do in the current stock market weakness?
On Friday, weakness in the stock market resulted in a change in IBD’s market outlook to “trend upwards under pressure”.
An “uptrend under pressure” is a warning signal that the uptrend may be about to run out and about to slide into a correction. While the underlying uptrend is still intact, now is the time to proceed with caution.
During “upward trends under pressure”, investors should be cautious about making new purchases. Focus only on stocks with exceptional fundamental and technical strength. Stay disciplined and flexible. At this point, the market could stabilize and move back into a “confirmed uptrend”, or it could fall into a correction.
The current environment is the perfect time to look for stocks that hold up best. An easy way to identify leadership in the stock market is to use the relative strength line. A strong RS line as the stock market struggles is a strong technical indicator.
Friday’s column in The Big Picture noted, “The stock market was recovering in hopes of a soft landing for the US economy. But Powell’s speech reminded Wall Street that more rate hikes are on the way so inflation doesn’t become stubborn. Fed fund futures traders estimate a little over a 60% chance that the Fed will raise its key borrowing rate by another 75 basis points in September, bringing the Fed fund rate to 3% to 3.25%.”
If you’re new to IBD, consider checking out CAN SLIM’s stock trading system and basics. Recognizing chart patterns is a key to investment guidelines. IBD offers a wide variety of growth stock lists such as Leaderboard and SwingTrader.
Investors can also create watchlists, find companies approaching a buying point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks to Watch Now
Dow Jones Stocks to Watch: Chevron, McDonald’s
Dow Jones stock Chevron is building a cup base with a buy point of 182.50 amid strong performance from energy stocks so far this year. An early entry at 164.76 is also in play. The stock rose 0.75% on Monday.
CVX stocks show a strong 97 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical statistics.
According to the IBD MarketSmith chart analysis, McDonald’s shares are now about 3% below a 265.56 cup-and-handle entry after Monday’s 0.5% drop. Stocks are trying to find support around their key 50-day line.
4 top growth stocks to keep an eye onrent Stock Market Rally
Top Stocks to Watch: Arista, Costco, GlobalFoundries, Ulta
Arista Networks added a handle to a double bottom base and placed the correct entry at 132.97, according to the IBD MarketSmith chart analysis. Arista’s relative strength remains close to recent highs despite recent market weakness, a bullish sign. ANET shares fell 1.2% on Monday.
IBD Leaderboard share Costco fell further below its 552.81 handle cup buy point, as shares moved lower Monday. Costco stocks stopped their slide around their 200-day line on Monday. Wait for a bullish revival in the entry before buying stocks.
GlobalFoundries fell below the double bottom’s 61.98 buy point on Friday, slipping 6%. An alternate entry, from a handle, is in play on 66.06. GFS shares fell another 2.65% on Monday.
Cosmetics leader Ulta Beauty is just above the 417.08 buy point of a double bottom after Monday’s 1.5% gain. Stocks are in a buy zone, but the current weakness in the market should give you some pause.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares fell 1.1% on Monday, extending a losing streak to three sessions. Shares of the electric vehicle giant continue to see strong resistance around their 200-day line.
Tesla is now more than 30% lower than the 52-week high.
Dow Jones Leaders: Apple, Microsoft
Of the Dow Jones stock, Apple shares fell another 1.4% on Monday as they traded about 10% of a head with a buy point off the handle at 176.25. The stock closed right on the 200-day line. Bullish, the stock’s relative strength is holding new highs, indicating stable stock market outperformance.
Microsoft fell 1.1% Monday, slipping through the 50-day line and closing at its lowest level since July 26. The stock is about 24% off its 52-week high.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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