Dow Jones futures, along with S&P 500 futures and Nasdaq futures, fell slightly overnight as the focus was on the US Federal Reserve (Fed) meeting.
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Tuesday’s stock market rally ended with a slight decline as U.S. Treasury yields hit long-term highs, but the S&P 500 and Nasdaq avoided closing below critical levels.More mainstream stocks are starting to show cracks, including: elf beauty (fairy). The pressure on the uptrend is increasing.
Investors should be very careful with new purchases, perhaps reducing their exposure further, but they should still work on their watchlists.
tesla (TSLA), meta platform (meta), adobe (adobe), Uber Technologies (Uber), caterpillar (Cat), Reservation held (BKNG), Akamai (Akamu), costco wholesale (Fee), general electric (G.E.), baker fuse (BKR), Manhattan Associates (man), next tracker (NXT) and Argenx (ARGX).
Meta, Tesla, Uber, Baker Hughes, Booking Holdings participate. IBD Leaderboard, Argenx and ELF Beauty are on the leaderboard watchlist. Adobe, Booking, Tesla, Argenx, Manhattan Associates, Caterpillar are participating IBD50.Tesla and Caterpillar IBD big cap 20.
In the video embedded in the article, we discussed the weak move in the market rally on Tuesday and analyzed ELF Beauty. Duolingo (Duor) and Uber.
Fed meeting
Policymakers are expected to conclude a two-day Fed meeting Wednesday afternoon and make an announcement at 2 p.m. ET. The market overwhelmingly expects no action. But Fed policymakers will likely offer new interest rate hike expectations and staff will release economic forecasts. Stocks and bonds are likely to fluctuate based on these rate hike expectations and Fed Chairman Jerome Powell’s 2:30 p.m. ET press conference.
Mr. Powell and other policymakers may want to keep the option of raising rates open and delaying any discussion of cutting rates. But investors are hoping the Fed will continue to be patient. The Fed is expected to continue releasing assets acquired during the pandemic, which will push Treasury yields higher. Rising market interest rates have tightened credit, even as the federal funds rate has stabilized in recent weeks.
Recent data shows weaker underlying trends in inflation and economic growth, reducing the probability of a rate hike on November 1 to less than 30%.
Dow Jones futures today
Dow Jones futures fell 0.1% to fair value. S&P 500 futures fell slightly, while Nasdaq 100 futures rose 0.1%.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
The stock market rally continued its weak trend, with all major indexes falling a little more compared to their 50-day lines. However, the bulls stepped into an important level, breaking off the session lows.
The Dow Jones Industrial Average fell 0.3% in stock market trading on Tuesday.
The S&P 500 Index and Nasdaq Composite fell 0.2%. Both fell below the intraday lows of the August 29 follow-through day on Tuesday morning, but managed to close above them. A close below the FTD low would be a very bearish signal that the market rally will ultimately fail.
The bulls continue to resist, but will this be their last stand?
The small-cap Russell 2000 has already fallen below its 200-day line, down 0.4% to its lowest point since early July. Invesco S&P 500 Equal Weight ETF (RSP) fell 0.2%, ending below the 200-day line for the first time since early June. All of these reflect weak market breadth. The NASDAQ up/down line continues to make new long-term lows. New lows have dominated new highs in recent days.
Leadership continues to shrink. ELF stock, which has been performing incredibly well, fell 8.55% on Tuesday, snapping an eight-session losing streak and dropping 18.4%.
US crude oil prices fell 0.3% to $91.20 per barrel after reaching $93.74 in morning trading.
The yield on the 10-year Treasury note rose 5 basis points to nearly 4.37%, its highest level since October 31, 2007. The two-year bond yield rose 5 basis points to 5.11%, the highest level in 17 years.
ETF
Among growth ETFs, Innovator IBD 50 ETF (FFTY) fell 1%. iShares Enhanced Technology Software Sector ETF (IGV) held a large amount of ADBE stock, which fell 0.1%. VanEck Vectors Semiconductor ETF (SMH) fell 0.9%.
ARK Innovation ETF (Arkku) 1.2%%, ARK Genomics ETF (arcg) fell 0.3%. Tesla stock is the No. 1 holding among Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 0.7%. US Global Jets ETF (jets) and SPDR S&P Home Builders ETF (XHB) rose less than 0.1%. Energy Select SPDR ETF (XLE) fell 0.9% and BKR stock held. Healthcare Select Sector SPDR Fund (XLV) rose 0.1%.
Industrial Select Sector SPDR Fund (XLI) fell 0.4%. GE and CAT stocks are large XLI components. Financial Select SPDR ETF (XLF) fell 0.1%.
Top 5 Chinese stocks to watch right now
Up-and-coming stocks
Tesla stock rose 0.5% to 266.50. The stock price is in the process of taking the wheel after rising above the 50-day line on September 11th.
ADBE stock rose 1.7% to 541.69, finding support at its 50-day line after plunging last week following earnings results.
META stock rose 0.8% to 305.07, above its 50-day line. Scheers is considering the possibility of a cup-based handle.
Uber stock rose 2.3% to 47.59, finding support near the 50-day within a cup-with-handle base.
CAT stock fell 0.45% to 279.67, trading sideways as the 10-week line caught up.
BKNG stock fell 1.4% to 3,112.75, testing its 10-week line. Stock prices have remained flat.
AKAM stock rose 1% to 106.62, clearing most of its sideways base and suggesting an early entry on Tuesday with a relative strength line at a new high.
According to MarketSmith analysis, GE stock fell 0.3% to 116.21, continuing to move within the 7% range.
COST stock edged up 0.3% to 564.35, pausing not far below a flat base next to an extended consolidation.
BKR stock fell 0.8% to 36.18, down to its 10-week line. A strong rebound could create new buying opportunities.
MANH stock is trading sideways within the cup with handle, with support at the 21-day line. The stock price rose 0.3% to 202.53.
NXT stock rose 0.2% to 41.60. The Sun Tracking IPO comes with a cup base with a handle. Nextracker stock has been volatile on the daily chart, but weekly closing prices have been tight at times.
ARGX stock rose 0.2% to 524.13, within a cup-with-handle base.
Timing the Market with IBD’s ETF Market Strategy
what to do now
The stock market continues to rise. While more leading stocks and sectors are breaking out, the recent buying hasn’t worked.
It’s just not the right time to buy stocks. Investors are likely holding back on recent purchases.
Investors will need to decide when to take some or all of the gains from strong 2023 performance, but holding some for the long term is still possible.
Perhaps if the market bounces back after the Fed meeting, many stocks will look interesting soon. However, that scenario involves adding exposure incrementally as major indexes face a series of resistance levels.
Continue working on your watchlist, focusing on stocks that hold significant support and are showing strong relative strength.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
X/ Follow Ed Carson on Twitter. @IBD_ECarson The latest information on the stock market, etc.
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