Dow Jones futures were higher early Tuesday as the stock market continues to slide following Friday’s plunge – which was fueled by hawkish speech by Federal Reserve Chairman Jerome Powell – before the last two sessions in August. The Labor Department’s August employment report is due Friday morning.
stock market today
On Monday, the Dow Jones Industrial Average fell 0.6%, while the S&P 500 lost 0.7%. The tech-heavy Nasdaq composite slipped 1%. And the small-cap Russell 2000 fell 0.9%.
Overview of the US stock market today
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Last Updated: 4:40 PM ET 08/29/2022
In the ongoing weakness of stock markets, Arista Networks (A NET), Costco (COST), GlobalFoundries (SFP) and Ultimate beauty (ULTA) — as well as Dow Jones stocks Chevron (CLC) and McDonald’s (MCD) – are among the best stocks to buy and watch. Keep in mind that increased market volatility is a good reason for investors to be more defensive.
Dow Jones Futures Today: Treasury Yields, Oil Prices, Jobs Report
Before Tuesday’s open, Dow Jones futures were up 0.7% relative to fair value, and S&P 500 futures gained 0.8%. Nasdaq 100 futures rallied 1.1% from fair value. Remember that overnight action in Dow Jones Futures and elsewhere does not necessarily translate into actual trading over the next stock Exchange session.
The 10-year Treasury yield hit 3.11% on Monday, extending last week’s gains. The 10-year Treasury yield closed at its highest level since June 28. Meanwhile, US oil prices rose more than 4%, with West Texas Intermediate futures trading around $97 a barrel.
The Labor Department’s August employment report is due Friday morning. The US economy is expected to add 293,000 jobs in August – according to Econoday estimates – compared to 528,000 in July. Average hourly earnings in August are expected to rise 0.4% from the previous month and 5.2% year-over-year.
What to do in the current weak stock market
On Friday, weakness in the stock market caused IBD’s market outlook to change to “uptrend under pressure”.
An “uptrend under pressure” is a warning sign, telling you that the uptrend may be running out of steam and about to slide into a correction. Although the underlying uptrend is still intact, now is the time to act cautiously.
During “pressurized uptrends”, investors should be cautious before making new purchases. Focus only on stocks with exceptional fundamental and technical strength. Stay disciplined and flexible. At this point, the market could stabilize and move back into a “confirmed uptrend”, or it could fall into a correction.
The current environment is the perfect time to look for stocks that are holding up the best. An easy way to identify stock market leadership is to use the relative line of force. A strong RS line as the stock market struggles is a strong technical indicator.
Friday’s The Big Picture column commented: “The stock market had rallied on hopes of a soft landing for the US economy. But Powell’s speech reminded Wall Street that more rate hikes are on the way so inflation doesn’t stay stubbornly high. chance at just over 60% that the Fed will raise its key rate by another 75 basis points in September. This would take the federal funds rate from 3% to 3.25%.
If you’re new to IBD, consider taking a look at its stock trading system and The basics of CAN SLIM. Recognize chart templates is one of the key investment guidelines. IBD offers a wide range of growth stock listingssuch as Ranking and Swing Trader.
Dow Jones stocks to watch: Chevron, McDonald’s
Dow Jones Chevron stock is building a cut base that has a buy point of 182.50, amid strong performance by energy stocks so far this year. An early entry at 164.76 is also in play. The stock was up 0.75% on Monday.
CLC action shows a solid 97 over a perfect 99 IBD Composite Assessment, speak IBD inventory check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.
McDonald’s shares are now about 3% lower at an entry of 265.56 cups with handle after Monday’s 0.5% decline, according to IBD MarketSmith graphical analysis. Stocks are trying to find support around their key 50-day line.
Top stocks to watch: Arista, Costco, GlobalFoundries, Ulta
Arista Networks added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith graphical analysis. Arista’s relative strength line holds near recent highs despite recent market weakness, a bullish sign. ANET shares fell 1.2% on Monday.
IBD classification Stock Costco fell even further below its buying point of 552.81 from a cup with handle, as shares fell slightly on Monday. Costco shares halted their slide on Monday around their 200-day line. Wait for a bullish resumption of the entry before buying stocks.
GlobalFoundries reverted to a double bottom Buy point of 61.98 on Friday, slipping 6%. An alternative entry, from a handful, is in play at 66.06. GFS shares slid another 2.65% on Monday.
Cosmetics leader Ulta Beauty is just above a double bottom Buy point of 417.08 after Monday’s 1.5% gain. Stocks are in a buy zone, but the current market weakness should give you pause.
Tesla Stock fell 1.1% on Monday, extending a losing streak to three sessions. Shares of the electric vehicle giant continue to see strong resistance around their 200-day line.
Tesla is now more than 30% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares fell another 1.4% on Monday, as they trade around 10% from the handle cup buy point at 176.25. The stock closed just at its 200-day line. On the upside, the stock’s relative strength line is holding new highs, indicating continued stock market outperformance.
Microsoft fell 1.1% on Monday, breaking through its 50-day line and closing at its lowest level since July 26. Shares are around 24% off their 52-week high.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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