Dow Jones Futures Loom As Correction Intensifies: Warren Buffett, Tesla Rivals, Fed

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. Warren Buffett cut Berkshire Hathaway (BRKB) buybacks in Q1 as he decried “gambling parlor” investing. Nio (NIO), Xpeng (XPEV) and Li Auto (LI) reported April deliveries plunged. But all eyes will on this week’s Fed meeting.

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The stock market correction intensified last week, as the major indexes sold off again, plunging into Friday’s close. Two market rally attempts failed almost as soon as they started. Investors should stay nearly or entirely on the sidelines until the market offers clear signals of a sustained uptrend.

Nutrien (NTR) kicks off fertilizer earnings Monday morning. Mosaic (MOS) reports late Monday, with CF Industries (CF) due Wednesday.

NTR stock fell 5.4% to 98.25 last week, but is finding support around its 50-day line after a big run. MOS stock skidded 6.5% last week, but closed around its 50-day line as well. CF stock rebounded to end the week down just 0.2%, slightly above its rising 50-day line.

EV giant BYD (BYDDF) will report April sales soon. Tesla (TSLA) China production and sales will be released later in May.

Tesla stock is on IBD Leaderboard. CF stock is on the IBD 50. CF, Mosaic and NTR stock are all on the IBD Big Cap 20.

The video embedded in this article discusses the volatile market action and analyzes BRKB stock, Exxon Mobil (XOM) and Nutrien.

Fed Meeting

The big event this week for investors is the Federal Reserve meeting on May 3-4. Policymakers almost certainly will hike interest rates by 50 basis points and are expected to agree to start cutting the central bank’s massive balance sheet. Wall Street will key in on the Fed statement and Fed chief Jerome Powell’s news conference for clues about future rate hikes.

Markets have priced in at least two more 50-point Fed rate hikes, but there’s a chance that policymakers could go ahead with a 75-basis point increase in the near future. Policymakers are worried about inflation becoming entrenched, even if year-over-year increases may be peaking. But aggressive rate hikes could derail the economy, especially with China’s Covid shutdowns and the ongoing Russia-Ukraine war.

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Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Last Week

The stock market suffered a week of big ups and downs, but sold off hard for the week. Friday’s losses accounted for all of the major indexes’ losses and then some.

The Dow Jones Industrial Average sank 2.5% in last week’s stock market trading. The S&P 500 index skidded 3.3%. The Nasdaq composite tumbled 3.9%. The small-cap Russell 2000 slumped 3.9% as well.

The 10-year Treasury yield fell 2 basis points to 2.89%, but after falling to 2.72% during the week.

U.S. crude oil futures rose 2.6% to $104.69 a barrel last week.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) tumbled 5.4% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 2.5%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 1.9%. The VanEck Vectors Semiconductor ETF (SMH) shed 2.1%.

SPDR S&P Metals & Mining ETF (XME) slumped 3.8% last week. The Global X U.S. Infrastructure Development ETF (PAVE) fell 2.8%. U.S. Global Jets ETF (JETS) descended 3.9%. SPDR S&P Homebuilders ETF (XHB) dipped 0.1%. The Energy Select SPDR ETF (XLE) slipped 1.35% and the Financial Select SPDR ETF (XLF) retreated 4.4%. The Health Care Select Sector SPDR Fund (XLV) gave up 2.5%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dived 10% last week and ARK Genomics ETF (ARKG) 11.15%, both to two-year lows. Tesla stock is still the No. 1 holding across Ark Invest’s ETFs. Cathie Wood also has stakes in Nio stock, Xpeng and BYD.

BYD stock is also owned by Buffett’s Berkshire.

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China EV Sales

On Sunday, Nio, Xpeng and Li Auto reported sharp declines in April deliveries.

Nio delivered 5,074 vehicles in April, down 49% from 9,985 in March and off 29% vs. a year earlier. Nio production was shut down for part of the month as Covid shutdowns hit suppliers’ output and shipments.

Xpeng delivered 9,002 vehicles, down 42% vs. 15,414 in March and up 75% vs. a year earlier.

Li Auto delivered 4,167 Li One hybrid SUVs, down 62% vs. March’s 11,034 and 25% below a year earlier. Many suppliers are shut down, severely affecting Li’s production.

BYD, which makes its own batteries and chips, appears to have been less affected. The EV giant will certainly report huge year-over-year growth, but will it match or top March’s record sales of 104,878 vehicles?

In the latest week, BYD reported first-quarter…