Dow Jones plunges 480 points as investors fear Fed rate hike through 2023

Dow Jones plunges 480 points as investors fear Fed rate hike through 2023

Dow Jones futures were higher ahead of Tuesday’s open after the Dow Jones Industrial Average sold more than 480 points on Monday. Tesla stock plunged after several reports announced that Tesla plans to cut production of electric vehicles in China as demand appears to be weakening.


The electric vehicle giant has refuted the reports, calling claims that it is cutting production in China false. Still, investors left the stock down more than 6% and close to the day’s lows.

More Fed rate hikes by 2023?

The stock market headed south on Monday as stronger-than-expected economic data raised concerns that the Federal Reserve will continue to aggressively raise interest rates next year due to a weak labor market. solid. Early Monday, the ISM services report was better than expected, reading 56.5 in November versus 54.4 in October. The ISM Services is a barometer of US business conditions in the services sector; a reading above 50 indicates expansion and a reading below 50 is contraction.

Monday’s economic data came directly on the heels of Friday’s strong jobs report which showed employers added 263,000 salaried jobs while the unemployment rate held steady at 3.7% and wages rose.

According to the Wall Street Journal’s Nick Timiraos, “Federal Reserve officials announced plans to raise their benchmark interest rate by 0.5 percentage points at their meeting next week, but high wage pressures could cause them to continue to carry it to higher levels than investors currently expect.”

Timiraos continued: “Policymakers expect price pressures to ease significantly next year, but rapid wage growth or higher inflation in labor-intensive service sectors The economy could lead to more of them supporting their benchmark rate hike next year above the 5% currently expected by investors.”

The 10-year Treasury yield jumped to 3.59% on Monday, rebounding from last week’s steep losses.

Earnings reports this week include Sports + Outdoors Academy (ASO), Auto area (AVOID), Broadcom (AVGO), Respect (HUNDRED), Lululemon Athletica (LULU), Ollie’s Bargain Outlet (OLLI) and Toll Brothers (TOL).

stock market today

On Monday, the Dow Jones Industrial Average lost 1.4%, or 482 points, and the S&P 500 fell 1.8%. The tech-heavy Nasdaq composite fell 1.9%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.7% and the SPDR S&P 500 (SPY) fell 1.8%.

Electric vehicle giant You’re here (TSLA) was trading down 6.4% on Monday. Among Dow Jones stocks, Apple (AAPL) fell 0.8% and Microsoft (MSFT) fell 1.2% in today’s stock market.

Celsius (CELH), Chubb (BC), Dexcom (DXCM) and KLA (KLAC)—as well as the names of the Dow Jones caterpillar (CAT), Chevron (CLC) and Home deposit (HD) – are among the best stocks to buy and watch.

Dexcom is an IBD ranking stock. Caterpillar and Home Depot were featured in this week’s Stocks Near A Buy Zone column. Celsius was a recent IBD 50 Stocks To Watch pick and a New America stock. Caterpillar was Thursday’s stock of the day.

4 most important growth stocks to buy and watch in the currentrStock market rally

Dow Jones Futures Today: Oil Price

Ahead of Tuesday’s opening bell, Dow Jones futures were up 0.2% relative to fair value, while S&P 500 futures gained 0.25%. Tech-heavy Nasdaq 100 futures rose 0.3% from fair value. Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.

US oil prices reversed from initial gains to fall more than 3%. West Texas Intermediate futures were trading just above $77 a barrel. Crude oil prices initially rose after European Union sanctions came into force against Russian crude oil.

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What to do during the stock market rally

Now is an important time to read IBD’s The Big Picture column with the stock trend back in a “confirmed uptrend”.

While it is certainly true that the S&P 500 and the Nasdaq composite are still in confirmed uptrends, the harvest of exploitable stocks has been disappointing. It was not easy to increase exposure.

When it comes to new purchases, what kind of feedback do you get? Do new purchases progress from purchase points? In this case, it is normal to give them space. But don’t be afraid to take partial profits if a gain reaches at least 10%. If new buying is going the wrong way, cut losses when the stock is down 3-4%, instead of waiting for the 7% rule to kick in.

Light and flexible trading is the best course of action at the moment. If the uptrend begins to gain traction again, there will be plenty of opportunities to increase exposure. And don’t be afraid to look for early entries, rather than waiting for a stock to reach a conventional buy point.

(Check out IBD stock listings like the IBD 50 and stocks near a buy zone, for additional stock ideas.)

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Caterpillar, Chevron, Home Depot

Caterpillar, a member of the Dow Jones, is about to take over the 238 point of purchase from its cutter base, according to IBD MarketSmith pattern recognition, and is about 2% below entry. CAT stock fell 1.5% on Monday.

The CAT stock boasts a solid 94 out of a perfect IBD composite rating of 99, according to the IBD stock balance sheet.

Energy giant Chevron fell 2.5% on Monday, falling further below its buy point of 182.50 in a consolidation basis.

Home improvement retailer The Home Depot ended Monday about 4% below the buy point of 333.08 a cup basis after the stock fell 2.4%.

Top stocks to buy and watch: Celsius, Chubb, Dexcom, KLA

Energy drink maker Celsius fell 3.5% on Monday, ending a three-day winning streak. Stocks attempt to move above the buy point of 118.29 by a cup basis, but are around 4% below entry, according to IBD MarketSmith pattern recognition.

Insurance giant Chubb is trading just below the 216.10 buy point of a cup with a handle on Monday after losing 1.7% on the session. The 5% buy zone peaks at 226.91.

IBD Leaderboard Dexcom stock is approaching an alternative entry at 123.46 despite Monday’s 1.3% drop. The shares are around 5% from their last buying point.

IBD’s new long-term leader KLA continues to hold just below the 392.60 one-cup buy point with a handle amid a three-day losing streak as stocks fell 0.25% on Monday. The RS line continues to hold new highs, a sign of stock market leadership.

Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live

Tesla Stock

Tesla stock slipped 6.4% on Monday, ending a three-day winning streak and giving up all of last week’s gains.

In the past few weeks, the stock has hit its lowest level since November 23, 2020, hitting a new 52-week low at 166.19. Since then, the stock has rebounded but remains well below its 50- and 200-day moving averages. The shares are around 55% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.8% on Monday, but still hold above their 50-day line. The stock is more than 20% off its 52-week high.

Microsoft fell 1.2% on Monday as stocks continue to hold above the 50-day line. The software giant remains around 27% off its 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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