Dow Jones Dives Nearly 500 Points On China Covid Protests, Fed Official Comments

Dow Jones futures were higher before Tuesday’s open after the Dow Jones Industrial Average sold off nearly 500 points on Monday. Investors will soon turn their attention to Fed Chairman Jerome Powell’s speech on Wednesday, while key inflation data is due on Thursday.


Monday’s stock market weakness was due to protests over the spread of Covid-19 in major Chinese cities and comments from St. Louis Federal Reserve President Jim Bullard on interest rates.

In a webcast interview with MarketWatch, Bullard, when asked how long he expected the Fed funds rate to remain in the 5% to 7% range, said, “I think we’ll see 2023 and Stay through 2024.”

Bullard believes markets are still discounting the degree to which the Fed will need to keep policy tight to prevent inflation. Traders have a 72% chance of a 50-basis-point rate hike at the central bank’s next meeting, down from 80% a week ago, according to CME’s FedWatch tool.

This week includes earnings reports CrowdStrike (CRWD) Dollar General (DG) and Intuit (INTU). Dow Jones stocks are also included Sales force (CRM), with the snow (snow) Ultra beauty (ULTA) and working day (WDAY).

The stock market today

On Monday, the Dow Jones Industrial Average lost 1.45%, or 497 points, and the S&P 500 fell 1.5%. The tech-heavy Nasdaq Composite sold off 1.6%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 1.5% and the SPDR S&P 500 ( SPY ) fell 1.6%.

Solar stocks sold off sharply on Monday, as analysts downgraded The first solar (FSLR) impacted the rest of the industry. FSLR stock fell 3.4% after JPMorgan downgraded the stock to neutral from overweight due to the stock’s strong performance in recent weeks. Yes technology (ARRY) Oh Schulz Technology ( SHLS ) declined 7.1% and 6.4%, respectively. Array Technologies gave up a recent buy point, while SHLS stock fell to a buy range above the 28.57 buy point.

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Electric vehicle giant Tesla ( TSLA ) raised a share on Monday. Among the Dow Jones stocks, Appl ( AAPL ) traded down 2.6% and Microsoft (MSFT) is down 2.3% in today’s stock market.

IPO Leader Siri Technologies, IBD Stock Leaderboard Arista Network (a trap), Celsius (CELH) and wood (CB) – Also named Dow Jones Boeing (BA) Caterpillar (CAT) and Chevron (CVX) – is one of the best stocks to buy and watch.

Arista Networks is an IBD Leaderboard stock and was the last IBD stock of the day. Boeing is an IBD swing trader stock and was one of four leaders featured in this week’s Stocks Near Buy Zone column. Celsius was the best to watch Monday’s IBD 50 stocks.

4 High Growth Stocks to Buy and Watch on CurrStock market rally

Dow Jones futures today: Treasury yields, oil prices

Earlier Tuesday, Dow Jones futures rose 0.1%, while the S&P 500 gained 0.3%. Technically, Nasdaq 100 futures were up 0.5% against fair value. Note that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield rose to 3.7% on Monday, holding near its recent lows. On Friday, the 10-year Treasury yield closed at 3.69%, its lowest close since Oct. 4. Meanwhile, US oil prices rose after hitting their lowest level since December 2021. West Texas Intermediate futures are trading around $77 a barrel.

IBD’s latest newsletter, MarketDiem, brings you actionable ideas for stocks, options and crypto right in your inbox.

What to do in a stock market rally

Now is an important time to read IBD’s Big Picture column with stock market trends back in “Confirmed Uptrends.”

While it’s good to put money to work on the current stock market, keep your exposure on the conservative side with small positions to begin with. Just because the stock market is in a confirmed boom doesn’t mean you should invest 100%. And given the volatile nature of the market, don’t be afraid to take a 10% profit.

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(See IBD’s stock lists, such as the IBD 50 and Stocks Near the Buy Zone, for additional stock ideas.)

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Boeing, Caterpillar, Chevron

Aircraft maker Boeing fell 3.7% on Monday, falling back below a cup-base buy point of 173.95. Before considering buying Boeing shares, look for a decisive reversal of this entry.

Dow Jones member Caterpillar is close to regaining its cup-base 238 buy point, According to IBD MarketSmith sample identification, and is less than 2% of the entry. CAT stock, with heavy exposure to China, fell 1.4% on Monday.

CAT stock has an impressive 96 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup.

Energy giant Chevron fell 2.9% on Monday, leaving a 182.50 buy point on the consolidation base.

Best stocks to buy and watch: Ari, Arista, Celsius, Chubb

Solar leader and IPO stock Array Technology left its 22.40 buy point on a cup with a handle on Monday, According to IBD’s MarketSmith sample introduction. Shares are about 3% below entry. Further weakness will create a 7%-8% loss reduction sales rule.

IBD Leaderboard Stock Arista Network remains in buy range above the 132.97 buy point despite Monday’s 1.5% loss.

Energy drink maker Celsius fell 1.3% on Monday, as the stock continued to form a cup base with a 118.29 buy point. Monday’s weakness may be the start of a potential handover that suggests a lower entry.

Chubb is trading below the 216.10 buy point with the cup in hand on Monday after minor losses in the session. A 5% buy zone would top out at 226.91.

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Join IBD’s experts as they analyze the leading stocks in the current stock market rally on IBD Live

Tesla stock

Tesla stock rose on Monday, but remains sharply above its 50- and 200-day moving average lines. Shares are about 55% off their 52-week highs.

Last week, the stock hit its lowest level since November 23, 2020, hitting a 52-week low of 166.19.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares fell 2.6% on Monday, breaking below their 50-day support level. Apple’s iPhone Pro production may drop below 6 million units due to civil unrest and Covid restrictions in China, according to reports. The stock is up more than 20% from its 52-week high.

Bloomberg reported that unrest at the Foxconn plant in Zhengzhou could lead to a 6 million unit reduction in 2022 iPhone Pro production. And that number could grow if the Covid restrictions are extended for a few more weeks, according to sources. The Zhengzhou factory produces the vast majority of iPhone 14 Pro and Pro Max smartphones.

Microsoft skidded 2.3% on Monday, falling for a second straight session. Shares continue to hold above the 50-day line. The software giant remains about 30% off its 52-week high.

Be sure to follow Scott Leitnen on Twitter @IBD_SLehtonen For more on growth stocks and the Dow Jones Industrial Average.

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