Dow Jones Futures: Techs Lead Inventory Market Restoration; Buyers watch the top of the Fed charge hike

Dow Jones futures were slightly higher overnight, along with S&P 500 futures and Nasdaq futures. The stock market closed on a mixed Tuesday, but technology led a strong rebound even as recession fears hit Treasury yields and commodity prices.




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The Dow Jones Industrial Average closed lower, but also at a low, while the S&P 500 posted small gains. Nasdaq had a strong run, with positive growth names like Roblox (RBLX) and Datadog (DOG) recovered above their 50-day level. Apple (AAPL), Amazon.com (AMZN) and Google’s parent Alphabet (GOOGLE) has regained its near-term importance.

Meanwhile, crude oil prices fell below $100 per barrel. Gasoline, copper and wheat futures fell sharply, extending significant losses over the past few weeks.

The Treasury yield curve inverted between 2-year and 10-year notes, a notable recession signal. Markets still see the Federal Reserve tightening sharply in the next two meetings, but also expect rate hikes to end this year.

Dollar tree (DLTR), Halozyme Therapy (HALO) and PRVA stock showed bullish action on Tuesday. Meanwhile, Northrop Grumman (NOC) and UnitedHealth (UNH) fell but found major support.

NOC and UnitedHealth stocks are on IBD Rankings. DLTR stock is on SwingTrader. Google stock is on IBD Long-Term Leaders. UNH shares above IBD 50. Privia Health (FIRSTLY) is Tuesday IBD shares of the day.

The video embedded in this article looks at Tuesday’s interesting market action and analyzes Dollar Tree, Halozyme Therapeutics and DDOG stock.

Dow Jones Futures Today

Dow Jones futures contract even compared to fair value. Futures on the S&P 500 and Nasdaq 100 were both up a fraction.

US crude oil futures rose 1%, back above $100 a barrel.

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


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Rally stock market

The stock market rallied to sell off Tuesday morning, but the bounce back ended mixed, at session highs.

The Dow Jones Industrial Average fell 0.4% on Tuesday stock market trading. The S&P 500 index rose 0.2%. The Nasdaq Composite Index rose 1.75%. The small-cap Russell 2000 gained 0.8%.

Shares of Apple, a Dow Jones, S&P 500 and Nasdaq giant, rose 1.9%, well above its 21-day moving average. Shares of Google are up 4.2% and Amazon 3.6%, also retesting their 21-day line and closing above their 50-day slide. All three megacap technologies are inoperable.

Recession fears are rattling financial markets, especially commodities and bonds.

U.S. crude oil prices fell 8.2% to $99.50 a barrel after having fallen significantly from their early-June peak. Gasoline futures prices fell 9%, continuing the rapid decline. Prices at the pump have fallen for 20 consecutive days, a trend that will continue.

Copper futures fell more than 4%, prolonging a prolonged sell-off. Seasonal futures contracts are falling sharply.

The yield on the 10-year Treasury note fell 16 basis points to 2.81%. Two-year yields fell 2 basis points to 2.82%, meaning the yield curve is now slightly inverted. Yields on one-year Treasuries rose 4 basis points to 2.76%.

Despite rising recession risks – and the prospect of significantly lower inflation in the coming months – the Fed is still expected to raise rates by 75 basis points at its end-of-July meeting and 50 basis points in the coming months. September meeting. However, markets have only seen a quarter point gain in the last two Fed meetings of the year, and no action now in February 2023.


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ETF

Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) rose 0.15%, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) inched more than 1 cent. iShares Expanded Technology-Software Sector ETF (VAT) increased by 2.6%. VanEck Vectors Semiconductor ETF (SMH) increased by 0.6%.

SPDR S&P Metals & Mining ETF (XME) fell 4.9% and the US Infrastructure Development Fund Global X (SAVE) decreased by 1.1%. US Global Jets ETF (JETS) increased to 0.2%. SPDR S&P Homebuilders ETF (XHB) increased by 2.5%. SPDR Select Energy ETF (XLE) fell 4% and the financial SPDR ETF (XLF) embedded 0.3%. SPDR Fund for the Healthcare Sector (XLV) fell 0.6%, with UNH stock being the main holding.

Reflecting a more speculative narrative on stocks, the ARK Innovation ETF (ARKK) increased by 9.1%, higher than the 50-day level. ARK Genomics ETF (ARKG), which closed Friday just above its 50-day mark, up 8.2% to a two-month high. Ark Invest owns some RBLX shares in its ETFs.


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Stocks to watch

Shares of Dollar Tree rose 5.5% to 164.84 on above-average volume, recovering from the 50-day line and breaking the trendline from late-April tops, providing an early target. DLTR stock with cup base with handle with officer point of purchase over 166.45. The relative strength line has hit new highs, reflecting the better performance of the Dollar Tree than the S&P 500 index. Archival Common Dollar (DG) is its own buying range cup base with handle.

Privia Health stock opened lower, then bounced back from the 21-day line to move higher. PRVA stock rose 7.4% to 31.04 on massive volume, quickly hitting an 11-month high of 33.88. Uber describes itself as doctor’s offices now slightly expanded from July 29 cup base buy points. But investors can view its recent pause above the buy point as a high handle with a buy point of 30.25. That tall handle can be viewed as a regular handle for a longer consolidation from last November.

Halozyme stock rose 4.2% to 46.33, recovering from the 50-day line and breaking a short, but very steep downtrend. That could provide an early entry into HALO stock, which has a flat basis at 48.68 buy points weekly. MarketSmith . chart. That flat base could be seen as an in-base handle from February 2021. The RS line for Halozyme stock is at a new high.

Meanwhile, Northrop stock fell 4.5% to 464.36, although it recovered from below the 50-day line on the day. However, NOC stock almost wiped out last week’s 4.9% gain that triggered a buy signal.

UnitedHealth stock fell 2.35% to 505.24, but closed in the upper half of the range as it found support at the 50-day line. While below the basic double bottom buy point of 507.35, UNH stock has not shown any sell signal yet. UnitedHealth may be working on it right now.


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Market aggregation analysis

The major indexes fell sharply shortly after Tuesday’s open, but rebounded, to varying degrees.

The Dow Jones Industrial Average closed lower, albeit past its worst. The S&P 500 index turned positive just before the closing bell. Nasdaq has returned to solid gains, with Apple stock surging while DDOG, Roblox and Ark stocks rallied, with falling Treasury yields likely to be a big driver.

Datadog rallied 7.25% above the 50-day level. Roblox stock is up 14% in volume to its best level since late April. But those stocks are at highs.

A stock market rally is still underway, although it has come under a lot of pressure over the past week.

Shares of Apple, Google and Amazon recovered their 21-day levels on Tuesday. All major indexes remained below that level, although Nasdaq closed. The 50-day line, the early-June top, and many other resistance points lie above that short-term level.

In addition to the risk of another drop in the 2022 bear market, stocks that look good will send out buy signals, then quickly reverse lower.

Northrop and UNH stocks fall into that category, though they may not be over yet. It’s certainly not a good day for defense and health insurers.

Despite tough days for health insurers, healthcare remains the top sector.

Ideally, the stock market would go sideways for a long time. That will allow more stocks to establish a base, while investors will gain a better understanding of the Federal Reserve and the economy. But the market will do what it will do.

What to do now

Stock market activity on Tuesday was relatively positive, as recession fears were raging in the bond and commodity pits. But the market’s recovery is under pressure. There are very few good stocks to buy or set up, and stocks that are likely to act are prone to sudden reversals.

Investors buying, for example, a biotech, should keep their positions small and be ready to take profits quickly and keep any losses small.

When a protracted market rally holds, investors will have more opportunities to increase their exposure and let the winners run away. For now, the focus should be on preparing for the next bull market.

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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