Dow Jones Futures: Split Market Rally At Turning Point; Tesla Forges New Entry

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The major indexes and leading stocks had a negative week as a hawkish Federal Reserve and surging Treasury yields took their toll. The stock market rally is “under pressure.”

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Tesla stock had an outside, negative reversal week. But it now has a handle on a weekly chart after running up sharply. Meanwhile, Apple (AAPL) drifted lower, providing a little more heft to its handle while still trading tightly. While Tesla (TSLA) and Apple stock are doing relatively well, most growth stocks are not.

In healthier parts of the market, Callon Petroleum (CPE) is trading tightly on a weekly chart despite its “porcupine” reputation. General Dynamics (GD) also is trading tightly as it forges a new flat base. Molina Health (MOH) has been trading tightly in a buy zone, while also finding key support this past week.

Investors should be cautious about making new buys in the current market week.

Tesla stock is on IBD Leaderboard. Tesla and CPE stock are on the IBD 50.

The video embedded in this article discussed the mixed market action and analyzed Callon Petroleum, General Dynamics and MOH stock.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, 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 Rally

The stock market rally retreated last week as the Nasdaq and small-cap Russell 2000 fell below their 50-day moving averages.

The Dow Jones Industrial Average dipped 0.3% in last week’s stock market trading, despite modest gains late in the week. The S&P 500 index fell 1.3%. The Nasdaq composite tumbled 3.9%. The Russell 2000 tumbled 4.6%.

The 10-year Treasury yield vaulted 34 basis points last week to 2.71%, hitting a three-year high, as the Federal Reserve signaled it will soon begin cutting its massive balance sheet in addition to sharp rate hikes. The Treasury yield curve is no longer inverted, as the two-year rose slightly to 2.52%.

U.S. crude oil futures fell 1.2% last week to $98.26 a barrel.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) tumbled 6.15% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) gave up nearly 2%.  The iShares Expanded Tech-Software Sector ETF (IGV) retreated 4.3%. The VanEck Vectors Semiconductor ETF (SMH) plunged 7%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dived 10.1% last week and ARK Genomics ETF (ARKG) 9%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) 1.7% last week. The Global X U.S. Infrastructure Development ETF (PAVE) retreated 3.8%. U.S. Global Jets ETF (JETS) descended 7.3%. SPDR S&P Homebuilders ETF (XHB) fell 3.5%, extending a losing streak. The Energy Select SPDR ETF (XLE) rose 3.2% and the Financial Select SPDR ETF (XLF) dipped 0.9%. The Health Care Select Sector SPDR Fund (XLV) popped 3.7%.

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Apple Stock

Apple stock fell 2.5% to 169.98 last week, closing just below its 21-day line and slightly above its 50-day and 10-week averages. That provides a little more depth to its handle buy point of 179.71. The relative strength line fell slightly, but is still close to record highs. Reports of weaker consumer electronics demand has taken a toll on chipmakers, including iPhone suppliers, but Apple stock itself has fared better. App Store and other service revenue helps insulated the tech titan from hardware demand shifts.

Tesla Stock

Tesla stock jumped Monday on record Q1 deliveries and hit a three-month high of 1,152.87 on Tuesday, essentially hitting resistance at a trendline entry. TSLA stock then reversed lower Tuesday and ended up falling 5.4% to 1,025.82 for the week, with the high and low far exceeding the prior week’s range low. Outside negative reversals are bearish action, but could be positive for the Tesla stock chart, by offering a real pullback following a huge run in just a few weeks. On a weekly chart, Tesla stock now has a cup-with-handle buy point of 1,152.97, according to MarketSmith analysis. That handle needs one more day to appear on a daily chart.

Arguably, Tesla stock could use a slightly deeper, longer handle. Getting below the 21-day moving average and 1,000 level might shake out a few more weak holders. More time would also let the 10-week line catch up somewhat to TSLA stock.

Keep in mind that Tesla stock is an outlier. Very few stocks with a triple-digit price-to-earnings ratios are holding up well. Can Tesla continue to buck the trend, or was last week’s reversal the start of a larger sell-off? When you consider that latter scenario as a possibility, you can see how a sub-1,000 move might shake a number of investors out.

On the news front,…