Dow Jones futures were higher ahead of the open on Tuesday as the Federal Reserve’s two-day meeting was set to begin. The Dow Jones Industrial Average had its best month since 1976, jumping nearly 14% in October.
late monday Arista Networks (ANET) and Apple supplier NKSP Semiconductors (NKSPI) were the key drivers of earnings. ANET’s shares fell 1% in extended trade, while NKSPI shares rose about 1%.
The Fed’s two-day meeting begins on Tuesday, with a decision on interest rates scheduled for Wednesday afternoon. Investor sentiment shows an 85% probability of a 75 basis point increase, according to CME.
The Fed says it won’t pivot — meaning slow the pace of rate hikes — until the strong labor market shows clear signs of slowing. But as the labor market begins to turn, the Fed’s strategy and a broad range of economic factors are likely to change. This puts Friday’s jobs report under increased scrutiny.
Stock market today
On Monday, the Dow Jones Industrial Average fell 0.4% and the S&P 500 lost 0.7%. The tech-heavy Nasdaq composite sold off by 1%.
Among exchange-traded funds, Nasdaq 100 tracker Invesco KKK Trust ( KKK ) fell 1.2% and the SPDR S&P 500 ( SPI ) fell 0.7%.
The EV giant Tesla ( TSLA ) fell 0.4% on Monday. Among the Dow Jones stocks, Apple ( AAPL ) fell 1.5% and Microsoft ( MSFT ) lost 1.6% in the stock market today.
Among the best deals to buy and watch, Dicom (DI), Cheniere Energi (LNG), Dollar General (DG) and Pure Storage (PSTG) — as well as Dow Jones names Chevron (CVKS) and UnitedHealth Group (UNH) — are among the best stocks to buy and watch. Keep in mind that a steady rally in the stock market is the perfect time for investors to look for stocks in their buy zones.
Cheniere is an IBD Leaderboard stock. Dollar General is a stock of IBD SwingTrader. Pure Storage is featured in this week’s Stocks Near the Buy Zone column, along with three other top stock ideas.
The 4 fastest growing stocks you can buy and watch liverent Stock Market Rally
Dow Jones Futures today: Treasury yields, oil prices
Ahead of Tuesday’s open, Dow Jones futures rose 0.5% above fair value, while S&P 500 futures rose 0.8%. Nasdaq 100 futures gained 1.1% relative to 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 Treasury yield rose to 4.07% on Monday, recouping some of last week’s losses. Meanwhile, US oil prices fell 2% as West Texas Intermediate futures traded near $86 a barrel.
Earnings Season: AMD earnings on deck
Third-quarter earnings season continues this week, with key reports coming from the energy giant BP (BP), Eli Lilly (LLI), Uber Technologies (UBER) and Dow Jones stocks Pfizer (PFE). All four will report on 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 push top stocks above new buy points and into buy zones, while a less impressive announcement can send stocks falling below key support levels.
The stock market’s reaction to an earnings announcement can often tell you more than the earnings themselves. If results look strong but the stock still slides, investors may be concerned about the sustainability of growth, rising costs or other potential downsides.
With the market in contraction mode, investors should keep an eye on companies that easily beat earnings results and have strong reactions. They could be among the stock market leaders if the market is able to extend its recent gains.
What to do at the current stock market meeting
Now is an important time to read IBD’s The Big Picture column. After recent gains, investors have the green light to buy top stocks that break the exact buy points. But not all follow-up steps work, so it’s important to increase exposure slowly and methodically as a new uptrend proves itself.
But not every continuation results in a sustained uptrend, which is why investors need to assess their level of exposure in the days and weeks that follow this signal, especially with the added risk of the upcoming Fed meeting. You want to buy in line with the market so you don’t overcommit to an uptrend that could turn on you.
Remember, don’t panic if you miss the first few breakouts. The Nasdaq is still more than 30% off its all-time high. If this stock market rally is real and meaningful, then there will be plenty of time to buy stocks and make money in the coming weeks and potentially months.
And if the stock market starts to fall apart again, you can reduce your exposure without losing too much capital.
Five Dow Jones Stocks to Buy and Watch
Dow Jones Stocks to Watch: Merck, UnitedHealth
Dow Jones and IBD 50 stock Merck is out of buy range above a double-bottom buy point of 93.12, according to IBD MarketSmith pattern recognition.
Healthcare giant UnitedHealth managed to jump the glass with 553.23 buy points, according to IBD MarketSmith. Shares rose 0.75% on Monday, closing slightly above the stock’s last entry.
Top stocks to watch: Cheniere, Dollar General, Dicom, Pure Storage
IBD Leaderboard stock Cheniere Energy is just shy of the glass with 178.69 buy points, according to IBD MarketSmith chart analysis. LNG stocks rose 1.1% on Monday.
IBD Swing Trader Dollar General stock is trying to break above 259.75 buy points in a cup base. Shares of DG lost 2.1% on Monday, ending below the entry. If the stock retakes this critical level, the 5% chase zone will rise to 272.74.
Dicom is trying to break the 120.55 buy point. Shares slipped 1.85% on Monday, falling below a buy point and breaking out of a 5% buy zone heading to 126.58.
Friday’s IBD stock of the day, Pure Storage, is approaching a 31.62 buy point after three days of gains. Shares rose 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 percent on Monday, snapping a four-day winning streak. The stock is recovering after hitting a new 52-week low last week.
Still, the stock is about 45% off its 52-week high and sharply below its 50- and 200-day moving average lines.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares fell 1.5% on Monday and are about 16% off their 52-week high. Last week, the stock regained its 50-day line. Now, the stock is testing resistance at its long-term 200-day line.
Microsoft fell 1.6 percent on Monday, giving up part of Friday’s 4 percent recovery. The stock is near a 52-week low since Oct. 13. The software giant remains more than 30% 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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