Dow Jones futures were higher ahead of Tuesday’s open, as the Federal Reserve’s two-day meeting gets underway. The Dow Jones Industrial Average had its best month since 1976, rising nearly 14% in October.
late monday Arista Networks (ANET) and Apple suppliers NXP Semiconductors (NXPI) was the key earnings mover. ANET stock fell 1% in extended trading, while NXPI shares rose around 1%.
The Fed’s two-day meeting begins Tuesday, with a decision on interest rates set for Wednesday afternoon. Investor sentiment points to an 85% probability of a 75 basis point increase, according to CME.
The Fed says it won’t pivot — meaning slow its pace of rate hikes — until the strong labor market shows clear signs of slowing. But once the labor market begins to roll over, the Fed’s strategy and a host of economic factors are likely to change. That puts Friday’s jobs report under further scrutiny.
Stock Market Today
On Monday, the Dow Jones Industrial Average fell 0.4% and the S&P 500 lost 0.7%. The technology-heavy Nasdaq composite sold off 1%.
Among the exchange traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 1.2% and SPDR S&P 500 (SPY) fell 0.7%.
Giant EV Tesla ( TSLA ) declined 0.4% Monday. Among Dow Jones stocks, Apple (AAPL) traded down 1.5% and Microsoft (MSFT) lost 1.6% in the stock market today.
Among the top stocks to buy and watch, Dycom (DY), Cheniere Energy (LNG), Dollar general (DG) and Pure Storage (PSTG) – as well as the name Dow Jones Chevron (CVX) and UnitedHealth Group (UNH) – are among the top stocks to buy and watch. Keep in mind that the ongoing stock market rally is the perfect time for investors to look for stocks in buy zones.
Cheniere is an IBD Leaderboard stock. Dollar General is an IBD SwingTrader stock. Pi Depo was featured in this week’s Stocks Near A Buy Zone column, along with three other top stock ideas.
4 Top Growth Stocks To Buy And Watch In Current Stock market rally
Dow Jones Futures Today: Treasury Yields, Oil Prices
Before the opening bell on Tuesday, Dow Jones futures rose 0.5% above fair value, while S&P 500 futures rose 0.8%. Nasdaq 100 futures gained 1.1% versus fair value. Remember that overnight actions in Dow Jones futures and elsewhere do not necessarily translate into actual trading in the next regular stock market session.
The 10-year Treasury yield ticked higher at 4.07% on Monday, recovering some of last week’s losses. Meanwhile, US oil prices fell 2% as West Texas Intermediate futures traded near $86 a barrel.
Salary Season: AMD earnings on deck
Third quarter earnings season continues this week, with key reports from energy giants BP (BP), Eli Lilly (LLY), Uber technology (UBER) and Dow Jones stocks Pfizer (PFE). All four report Tuesday morning. Advanced Micro Devices (AMD) and Airbnb (ABNB) will report after the close on Tuesday.
Earnings reports cause many of the biggest moves in stocks, and require special focus. Strong earnings can fuel stocks higher above new buy points and into buy zones, while an unimpressive announcement can send stocks tumbling below key support levels.
The stock market’s reaction to an earnings release can often tell you more than the earnings themselves. If results look strong but the stock slips anyway, investors may be concerned about the sustainability of growth, rising prices or other potential negatives.
With the market in rally mode, investors should follow companies that easily beat earnings results and have strong upside reactions. They could be among the leaders of the stock market if the market can extend its recent gains.
What to do in the ongoing stock market rally
Now is an important time to read IBD’s The Big Picture column. After recent gains, investors have the green light to buy stocks above breaking past correct buy points. But not all follow-throughs work, so it is important to increase exposure slowly and methodically, as the new rising trend proves itself.
But not all results follow a sustained trend, which is why investors need to gauge their exposure levels in the days and weeks following this signal, especially with the added risk of the upcoming Fed meeting. You want to buy in sync with the market so that you don’t overcommit in an uptrend that can reverse on you.
Remember, don’t panic if you miss the first couple. The Nasdaq is still more than 30% off its high. If this stock market rally is real and meaningful, then there will be plenty of time to buy stocks and make money over the coming weeks and potentially months.
But if the stock market starts to crash again, you can reduce exposure without losing too much capital.
Five Dow Jones stocks to buy and watch now
Dow Jones Stocks to Watch: Merck, UnitedHealth
Dow Jones and IBD 50 Merck shares are not in the buying range past 93.12 points to buy a double bottom, according to the IBD MarketSmith recognition model.
Health care giant UnitedHealth is breaking through a cup with the 553.23 buy point handle, according to IBD MarketSmith. Shares rallied 0.75% Monday, closing just above the stock’s last entry.
Top Stocks to Watch: Cheniere, Dollar General, Dycom, Pure Storage
IBD Leaderboard stock Cheniere Energy is just shy of a cup with the handle’s 178.69 buy point, according to IBD MarketSmith’s chart analysis. LNG stock rose 1.1% on Monday.
IBD Swing Trader stock Dollar General is trying to break past a 259.75 buy point in a cup base. Shares of DG lost 2.1% on Monday, ending below the entry. If the stock regains this critical level, the 5% retracement zone will reach up to 272.74.
Dycom is trying to exceed the buy point of 120.55 a cup basis. Shares slipped 1.85% Monday, falling below the buy point and out of the 5% buy zone that goes up to 126.58.
Friday’s IBD Stock of the Day, Pi Depo, is approaching a 31.62 buy point after three days of gains. The stock was up 1.15% on Monday.
Join IBD experts as they analyze the leading stocks in the current stock market rally on IBD Live
Tesla shares fell 0.4% on Monday, snapping a four-day winning streak. The stock is rebounding after hitting a new 52-week low last week.
Still, shares are about 45% off their 52-week high and sharply below their 50- and 200-day moving averages.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 1.5% on Monday and are about 16% off their 52-week high. Last week, the stock reached its 50-day line. The stock is now testing resistance at the long-term 200-day line.
Microsoft fell 1.6% Monday, giving up part of Friday’s 4% rebound. Shares are near their 52-week low on October 13. The software giant remains more than 30% off its 52-week high.
Be sure to follow Scott Lehtonen on Twitter @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
YOU MAY ALSO LIKE:
Top Growth Stocks To Buy And Watch
Learn how to time the market with IBD’s ETF Market Strategy
Find the best long-term investments with long-term IBD leaders
MarketSmith: Research, charts, data and coaching all in one place
How to Research Growth Stocks: Why This IBD Tool Simplifies the Search for Top Stocks