Dow Jones Futures: What To Do After Today’s Stock Market Sell-Off Before Key Inflation Report

Dow Jones futures were little changed after Monday’s stock market sell-off. A key inflation report — the consumer price index — is due out Tuesday morning ahead of the market open.

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Stock Market Today

On Monday, the Dow Jones Industrial Average sold off 1.2% and the S&P 500 moved down 1.7%. The tech-heavy Nasdaq composite tumbled 2.2%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) declined 2.4%, and the SPDR S&P 500 ETF (SPY) lost 1.7% Monday.

Electric-vehicle leader Tesla (TSLA) skidded nearly 5% Monday. Twitter (TWTR) reversed from losses to end 1.7% higher after Tesla Chief Executive Elon Musk decided against being a company director.

Chip stocks were among the day’s weakest performers. Nvidia (NVDA) tumbled 5.2% on an analyst downgrade. Advanced Micro Devices (AMD) slid 3.6% to hit its lowest level since July 2021.

As the stock market’s uptrend continues to struggle, Dow Jones financial leader American Express (AXP) — along with Alphabet (GOOGL), Broadcom (AVGO), IBD Leaderboard watchlist stock Edwards Lifesciences (EW), Raytheon Technologies (RTX) and Shell (SHEL) — are among Tuesday’s top stocks to buy and watch.

Elsewhere among the Dow Jones leaders, Apple (AAPL) declined 2.55% and Microsoft (MSFT) traded down 3.9% in today’s stock market.

Microsoft and Tesla are IBD Leaderboard stocks. Edwards Lifesciences and Raytheon Technologies were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Futures Today: Treasury Yields, Oil Prices, CPI

After Monday’s close, Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were little changed vs. fair value. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year U.S. Treasury yield extended a win streak to seven sessions Monday, rising to 2.78%, its highest level since Jan. 2019. U.S. oil prices slumped more than 3% Monday, as West Texas Intermediate crude traded below $95 a barrel. Also, China’s worsening virus outbreak is raising concerns about potential demand.

Consumer prices in March are projected to have risen 1.1% for a year-over-year rate of 8.4% — per Econoday estimates — which would be the fastest increase since Dec. 1981. The consumer price index measures the rate of inflation. Meanwhile, the White House said that it expects the “March CPI headline inflation (number) to be extraordinarily elevated due to Putin’s price hike.”

The Labor Department will release the CPI at 8:30 a.m. ET.

Stock Market Rally Struggles: What To Do Now

On Monday, the stock market put in another disappointing performance with the major stock indexes ending with sharp losses. The Nasdaq stumbled further below its 50-day line, which had been a key support level to watch.

Even though the underlying uptrend is still intact, it’s time to proceed with a greater degree of caution. Be wary of most new purchases and focus only on stocks that have exceptional fundamentals and heavy-volume breakouts past correct buy points. Also, be flexible. The market may rebound and move back into “confirmed uptrend,” or the heavy selling could persist and lead to a correction.

Friday’s The Big Picture column commented, “In 2020, the tech sector ruled. Then in the final three months of that year, the tables turned, very quietly at first. But in 2021, the full-on rotation from high-priced technology stocks — especially those with zero bottom lines — got into full swing. Also in 2021, energy, agriculture, steel, chemicals and other cyclical areas of Wall Street lit up like a pinball machine that just went tilt. And while banking and financial stocks have mostly turned into laggards, the 2022 cyclical bull market lives on.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Four Dow Jones Stocks To Watch Now

Dow Jones Stocks To Buy And Watch: American Express

Dow Jones financial stock American Express is tracing a cup with handle with a 194.45 buy point. Shares dropped 3.3% Monday, ending about 9% away from the latest entry.

Keep an eye on the stock’s relative strength line. Amid its recent descent, the RS line is starting to fade further from its old highs, meaning it has its work cut out for it ahead of a potential breakout. The RS line measures a stock’s price performance vs. the S&P 500. The RS line should hit a new high on the breakout day or shortly thereafter to confirm the strength of a stock’s breakout.

Four Top Growth Stocks To Watch In The Current Stock Market Rally

Stocks To Buy And Watch: Alphabet, Broadcom, Edwards, Raytheon, Shell

Recent IBD 50 Stocks To Watch pick, Alphabet, shows a 2,875.97 buy point in a cup with handle, according to IBD MarketSmith chart analysis. GOOGL shares are about 10% away from the entry after Monday’s 3.35% slide.

Broadcom fell another 1.1% Monday, as the chip stock moved further below an early entry at 614.74. Shares are closing in on the 7%-8% loss trigger. The stock also gave up support at it 50-day line in recent sessions. Meanwhile, shares have put in another buy point, a handle entry at 645.41.

IBD Leaderboard watchlist stock Edwards Lifesciences continues to advance up the right side of a cup base that shows a 131.83 buy point. Shares slid almost 2% Monday. Monday’s weakness is likely the start of a handle that would lower the risk-optimal entry to 125.21.

Defense contractor Raytheon Technologies is within striking distance of a flat base’s 104.44 buy point. Shares rallied 1.7% Monday, trading just 2% off the latest entry.

Oil-and-gas producer Shell, the April 1 IBD Stock Of The Day, is just below a flat base’s 56.23 buy point after Monday’s 1.4% fall.

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

Tesla Stock

Tesla stock skidded 4.8% Monday, adding to Friday’s 3% decline. Shares of the EV giant finished Monday about 15% away from a cup-with-handle’s 1,152.97 buy point.

The stock traded as high as 1,243.49 on Nov. 4. and ended Monday about 22% away from that all-time high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares moved down 2.55% Monday, further below a 176.75 buy point in a double-bottom base. The stock is close to triggering the 7%-8% loss-cutting sell rule. Along with that double-bottom entry, a handle buy point is also in play at 179.71. On the downside, AAPL stock gave up its 50-day support level Monday, indicating further weakness is likely.

Software leader Microsoft tumbled 3.9% Monday, as shares fall further below their 50-and 200-day lines. The stock is nearly 20% off its 52-week high.

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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