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Dow Jones Futures: S&P 500, Nasdaq Hit Fresh Bear Market Lows; Major Inflation Report Due


Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, as investors awaited major inflation reports and Federal Reserve news.




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Nasdaq and S&P 500 hit bear market lows on Tuesday. The Dow Jones Industrial Average led an intraday rally, but the major indexes dipped to the negative late in the session. Chip stocks continued to sell off due to weak demand and US controls on Chinese sales. Tesla (TSLA) extends its sharp slide.

Investors should stay on the sidelines, all or almost all of it with cash.

On Wednesday morning, the Labor Department will release the producer price index, a kickoff to Thursday’s consumer price index. Meanwhile, the Fed minutes from its September policy meeting will be released on Wednesday afternoon.

Megacaps Apple (AAPL), Microsoft (MSFT), Google’s parent Alphabet (GOOGLE), Amazon.com (AMZN) and Tesla stock in particular lost ground on Tuesday near recent or long-term lows.

Energy storage Exxon Mobil (XOM), Albemarle (ALB), Cheniere Energy (LNG), Eli Lilly (ONLY) and Vertex Pharmaceuticals (VRTX) brag relative strength line at or near the high, with most potential buy points.

Vertex and LNG warehouse are on IBD Rankings. VRTX shares are available on IBD 50. XOM, Vertex and Albemarle stocks are on IBD Big Cap 20. Shares of Microsoft and Google are IBD Long-Term Leaders. The video embedded in this article discusses Tuesday’s market action and LNG stock analysis, Commercial Metals (CMC) and Outdoor deck (DECK).

Early Wednesday, PepsiCo (PEP) will report third-quarter earnings. PEP stock edged higher on Tuesday. But the stock has been falling for the past few weeks, even if the RS line has trended higher during that time.

Dow Jones Futures Today

Dow Jones futures are up 0.15% above fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.3%.

The Labor Department will release the producer price index at 8:30 a.m. ET, exactly 24 hours before the CPI inflation report. At 2 p.m. ET, the Federal Reserve will release the minutes of its September meeting.

Remember that action overnight in Dow futures contract and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.


Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live


Stock Market Tuesday

The stock market got off to a weak start, trying to recover but faltering, led by the Nasdaq.

The Dow Jones Industrial Average rose 0.1% on Tuesday stock market tradingwith Amgen (AMGN) a major contributor thanks to the analyst upgrade. The S&P 500 index fell 0.7%. The Nasdaq composite fell 1.1%. The small-cap Russell 2000 closed partially higher.

U.S. crude oil prices fell nearly 2% to $89.35 a barrel, continuing to decline slightly after a spike last week.

The yield on the 10-year Treasury note rose 6 basis points to 3.94% from 3.88% on Friday. The 10-year yield hit 3.97% on the day, just below a 12-year high set on September 27. The US bond market was closed on Monday, but bond futures and Sovereign bond yields around the world signaled another rise in 10-year Treasury yields. came.

ETF

Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) fell 1.1%, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) increased 0.15%. iShares Expanded Software-Technology Sector ETF (IGV) fell 1.75%, with MSFT stock being the main IGV holding.

VanEck Vectors Semiconductor ETF (SMH) decreased by 3.15%. Chip equipment manufacturers such as Lam Nghien (LRCX) are among the big losers, along with leaders who are just as messy as On semiconductors (ABOVE).

SPDR S&P Metals & Mining ETF (XME) back 0.9%. US Global Jets ETF (JETS) sink 0.65%. SPDR Select Energy ETF (XLE) decreased by 0.8%. SPDR Fund for the Healthcare Sector (XLV) increased by 0.5%.

Reflecting a more speculative narrative on stocks, the ARK Innovation ETF (ARKK) fell 1.8% and the ARK Genomics ETF (ARKG) embedded 0.5%. Tesla stock is a large stock on Ark Invest ETFs.


The five best Chinese stocks to watch right now


Stocks to watch

XOM stock rose 0.85% to 98 on Tuesday, recovering from its intraday low. The oil company appears to be finding a way out after surging last week amid booming oil prices and a strong Q3 update. Currently, Exxon stock has a consolidation level of 105.67 buy points.

ALB stock fell 1.8% to 272.99, falling below the 50-day upline. Stocks not far from potential trendline entry as lithium giant works on potential flat base. But buying volatile Albemarle stock during a bear market would be extremely risky.


Albemarle Lithium Charge batches last decades


LNG shares rose 0.15% on Tuesday to 168.14, recovering from 10-week levels on the day. The leader in liquefied natural gas is looking strong but needs to form new ground.

LLY stock rose 1.15% to 327.60, up from a 21-day high. Eli Lilly stock is attempting a return to a fixed base buy level of 335.43, according to MarketSmith Analysis.

VRTX stock rose 0.2% on Tuesday to 295.16, continuing to trade closely in a 10% fixed basis. The buy point is at 306.05, with 304.36 offering a slightly lower entry.

Megacap shares

Apple shares fell 1%, well above a three-month low last week. Shares of Microsoft fell 1.7%, to a 17-month low. GOOGL stock fell 0.7%, slightly above a 52-week low set on September 30. AMZN stock closed down 1.3% after hitting its worst level in nearly three month.

Tesla shares rose 2.9% to 216.50, hitting their worst level since June. The EV giant has fallen for five consecutive sessions and eight of the last nine. TSLA stock is closing at a 52-week low of 206.84 set last May. Tesla earnings are due on October 19.


Tesla Vs. BYD: Which EV Giant is better to buy?


Stock market analysis

Shortly after Tuesday’s open, the Nasdaq composite and the S&P 500 set new bear market lows. The Dow Jones, which has never fallen much, led a rally as Treasury yields fell. But after a brief period of slight gains, the S&P 500 and Nasdaq dwindled for much of the afternoon as yields regained momentum. The Dow posted a slight gain.

With the Nasdaq and S&P 500 lows, their recovery attempt was wiped out. The Dow Jones market rally is still underway, but the blue chip index is hitting resistance at its 10-day line.

Meanwhile, the September CPI inflation report showed big signs.

The stock market has steadily rallied to inflation data, Fed events and other Fed-related reports over the past few months, with investors scrambling to materialize as the Fed pivots to interest rate. As the actual news dampened hopes, stocks experienced significant sell-offs.

Thursday’s CPI report is also due as earnings season kicks in. That can add significant volatility, especially for individual stocks and industries. The chip warning doesn’t bode well for overall tech earnings and beyond.


Market Timing with IBD’s ETF Market Strategy


What to do now

This is not a good time to buy. Many stocks that looked promising a week ago have been hit hard, especially tech names like Payment Allocation (PCTY), Enphase Energy (ENPH) and On semiconductors (ABOVE). But even the resilient names haven’t had much success: Vertex stock is up only slightly from six months ago.

Investors should look for relatively strong strength. Many stocks with high RS lines can fall below their 50-day and 200-day lines, with the chart showing heavy losses. But with the bear market still hitting new lows, that’s okay.

So keep updating your watchlist while staying engaged. When the market shows real signs of strength, you want to be ready. But don’t jump the gun.

Read Big picture every day to stay in sync with market trends and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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