Dow Jones Futures Fall: What To Do After Today’s Stock Market Sell-Off Before Key

Dow Jones futures were lower after Monday’s stock market sell-off. A key inflation report — the consumer price index — is due out Tuesday morning ahead of the market open.

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Stock Market Today

On Monday, the Dow Jones Industrial Average sold off 1.2% and the S&P 500 moved down 1.7%. The tech-heavy Nasdaq composite tumbled 2.2%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) declined 2.4%, and the SPDR S&P 500 ETF (SPY) lost 1.7% Monday.

Electric-vehicle leader Tesla (TSLA) skidded nearly 5% Monday. Twitter (TWTR) reversed from losses to end 1.7% higher after Tesla Chief Executive Elon Musk decided against being a company director.

Chip stocks were among the day’s weakest performers. Nvidia (NVDA) tumbled 5.2% on an analyst downgrade. Advanced Micro Devices (AMD) slid 3.6% to hit its lowest level since July 2021.

As the stock market’s uptrend continues to struggle, Dow Jones financial leader American Express (AXP) — along with Alphabet (GOOGL), Broadcom (AVGO), IBD Leaderboard watchlist stock Edwards Lifesciences (EW), Raytheon Technologies (RTX) and Shell (SHEL) — are among Tuesday’s top stocks to buy and watch.

Elsewhere among the Dow Jones leaders, Apple (AAPL) declined 2.55% and Microsoft (MSFT) traded down 3.9% in today’s stock market.

Microsoft and Tesla are IBD Leaderboard stocks. Edwards Lifesciences and Raytheon Technologies were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Futures Today: Treasury Yields, Oil Prices, CPI

After Monday’s close, Dow Jones futures fell 0.35%, while S&P 500 futures lost 0.45% vs. fair value. Nasdaq 100 futures were down 0.6% vs. fair value. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year U.S. Treasury yield extended a win streak to seven sessions Monday, rising to 2.78%, its highest level since Jan. 2019. U.S. oil prices slumped more than 3% Monday, as West Texas Intermediate crude traded below $95 a barrel. Also, China’s worsening virus outbreak is raising concerns about potential demand.

Consumer prices in March are projected to have risen 1.1% for a year-over-year rate of 8.4% — per Econoday estimates — which would be the fastest increase since Dec. 1981. The consumer price index measures the rate of inflation. Meanwhile, the White House said that it expects the “March CPI headline inflation (number) to be extraordinarily elevated due to Putin’s price hike.”

The Labor Department will release the CPI at 8:30 a.m. ET.

Stock Market Rally Struggles: What To Do Now

On Monday, the stock market put in another disappointing performance with the major stock indexes ending with sharp losses. The Nasdaq stumbled further below its 50-day line, which had been a key support level to watch.

Even though the underlying uptrend is still intact, it’s time to proceed with a greater degree of caution. Be wary of most new purchases and focus only on stocks that have exceptional fundamentals and heavy-volume breakouts past correct buy points. Also, be flexible. The market may rebound and move back into “confirmed uptrend,” or the heavy selling could persist and lead to a correction.

Monday’s The Big Picture column commented, “The S&P 500 tumbled 1.7% and closed slightly below the 50-day moving average. The index now tries to find support at that level. But if the Nasdaq is any indication, the composite melted right through its 50-day line Monday after a tentative hold on it the previous two sessions.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Four Dow Jones Stocks To Watch Now

Dow Jones Stocks To Buy And Watch: American Express

Dow Jones financial stock American Express is tracing a cup with handle with a 194.45 buy point. Shares dropped 3.3% Monday, ending about 9% away from the latest entry.

Keep an eye on the stock’s relative strength line. Amid its recent descent, the RS line is starting to fade further from its old highs, meaning it has its work cut out for it ahead of a potential breakout. The RS line measures a stock’s price performance vs. the S&P 500. The RS line should hit a new high on the breakout day or shortly thereafter to confirm the strength of a stock’s breakout.

Four Top Growth Stocks To Watch In The Current Stock Market Rally

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