Dow Jones Futures: Stock Market Rally Awaits Fed Pivot Signals; AMD, Devon Move On Earnings

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures, with attention turning to Wednesday’s Federal Reserve meeting and whether policymakers will support or discredit Fed pivot hopes.


Stocks pulled back from early Tuesday as stronger-than-expected economic data was not what the Fed wanted to see. Megacap technology continues to drop on indexes, especially the Nasdaq. (AMZN) and parent Google Alphabet (GOOGL) fell into a new bear market after apple (AAPL) and Microsoft (MSFT).

Advanced Micro Devices (AMD), a lithium producer Be alive (LTHM), a pharmaceutical distributor McKesson (MCK), Paycom Software (PAYC), and a shale oil and gas producer Devon Energy Company (DVN) received capital overnight.

AMD stock rose despite weak results. Livet failed because their revenue growth was not very strong. Devon Energy Company Limited’s debt over the past year. PAYC stock rose on strong earnings while MCK stock remained flat after mixed results.

DVN stock is in the IBD 50.

Bye for now Tesla (TSLA) competitor BYD (BYDDF) will report October sales soon, followed by the best-of-nothing from Neo (NIO), It’s automatic (LI) and Xpeng (XPEV). BYD stock rose 2.6% Tuesday, while Tesla stock closed up 0.1%, both closed for the day.

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The Federal Reserve is expected to increase rates by 75 basis points for the fourth straight meeting. But the market is divided on whether policymakers will raise rates by 50 or 75 basis points in December.

Some soft inflation data and various central bank moves around the world – including a few hints from Fed officials – have dampened hopes of a Fed pivot.

The Fed’s policy statement will come out at 2 pm ET Wednesday, with Fed Chairman Jerome Powell’s press conference at 2:30 pm Investors will be looking for any Fed pivot hints. Powell may not want to give clear signals to maintain maximum flexibility.

The Fed chief may include risks related to reactions to key data. The October jobs report is due on Friday, following a stronger-than-expected September JOLTS survey.

Dow Jones Futures Today

Dow Jones futures fell below fair value. S&P 500 futures and Nasdaq 100 futures are stable.

Remember that overnight events in the Dow Futures and elsewhere do not necessarily translate to the actual market in the next stock market session.

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Market Rally

The stock market rebounded on Tuesday. Major indexes opened flat, driven by lower yields and speculation that China may continue to scale back its tough zero-Covid policy.

But at 10 a.m. ET, an unexpected job gap emerged in September, while the ISM manufacturing index remained above the break-even 50 level in October. Financial reports returned to stocks and quickly declined.

The Dow Jones Industrial Average was down 0.2% in Tuesday’s trading. The S&P 500 index fell 0.4%. The Nasdaq composite returned 0.9%. The small-cap Russell 2000 climbed 0.25%, its eighth straight advance.

Amazon’s stock fell 5.5%, cutting Friday’s price to its worst level since April 2020. That’s after it fell 13% last week on earnings. AMZN stock has fallen for five straight sessions on volume.

Google’s stock fell 4.3% to its worst since January 2021, after ending 4.8% last week.

Apple stock fell 1.75%, turning from near its 200-day line to close below its 50-day. AAPL changed +5.75% for the week.

Microsoft stock fell 1.7%, not far off the bear market’s decline. MSFT stock fell 2.6% last week.

The 10-year yield fell 3 points to 4.05%, but ended near session results. The 10-year yield fell to 3.955% shortly after the open, but found support again at the 21-day moving average. The US dollar pared losses early.

US crude oil prices rose 2.1% to $88.37 a barrel. Crude futures rose on hopes that China will adjust its Covid policy, as well as reports that the Saudis are on alert for an Iranian attack. Gas futures were down 10% after rallying nearly 12% Monday.

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Among the best performing ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.6%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell 1.3%, with stock MSFT leading the way. The VanEck Vectors Semiconductor ETF ( SMH ) rose 0.7%, with AMD stock the main draw.

The SPDR S&P Metals & Mining ETF (XME) gained 1.5% and the Global X US Infrastructure Development ETF (PAVE) gained 0.6%. The Energy Select SPDR ETF (XLE) is up 1%, and DVN stock has the top 10 holdings. The Health Care Select Sector SPDR Fund (XLV) rose 0.1%.

In an upbeat performance by stocks, the ARK Innovation ETF ( ARKK ) rose 1 cent while the ARK Genomics ETF ( ARKG ) climbed 1.3%

Tesla is the main stock held across Ark Invest’s ETFs. Mass production of the Tesla Cybertruck will begin at the end of 2023, Reuters reported earlier on Tuesday.

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Cathie Wood’s Ark contains small trees and BYD products. BYD’s EV and plug-in hybrid sales have overtaken Tesla’s total, although the US giant still leads the “BEV” electric delivery market.

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Capital gains

AMD’s earnings and sales missed a bit of a downgrade, after the big chip reported earlier earnings that were below contract. AMD also indicated that Q4 earnings will fall short of consensus, but will rise by around 14% vs. a year ago.

AMD stock rose in overnight trading. Shares were down 0.7% to 59.66 on Tuesday. AMD stock is up slightly from the wild market of Oct. 13 is lower than 54.57, but not by much.

Nvidia (NVDA), which competes with AMD in graphics chips, grew slightly.

Costs of living are up, expectations are high but revenues are down short despite more than doubling from a year ago. LTHM stock has fallen well in long-term practice. Shares lost 0.8% to 31.33 on Tuesday, turning down to its 50-day line. Live Products has a 36.48 percent buying position, according to MarketSmith research.

ALB stock, with a similar chart, was down in after-hours trading. Lithium load Albemarle (ALB) reports late Wednesday.

Devon Energy’s earnings beat expectations, but the oil producer is cutting its dividend by 13%. DVN stock plummeted overnight. The index was down 5 cents through Tuesday to 77.30, holding at a widely bought 75.37 cup. DVN stock is still slightly extended from the rising 50-day line.

Paycom has achieved valuations, and earnings guidance is strong. Small PAYC products have been replaced with extended trades. Shares retreated nearly 1% on Tuesday to 342.72, above the 50-day line and below the trend line. A strong move that earns money later can provide a starting point. The PAYC market has a place to buy 402.88 endorsements.

McKesson lost revenue as revenue grew slightly. MCK stock was not traded during the night event. Shares fell 1.85% to 382.16 on Tuesday, but held on from a low buy point of 375.33. The flat foundation is part of the basic principles and foundations.

Cardinal Health (CAH), which reports on Friday, also does not trade after hours. CAH products are slightly stretched by point of purchase.

Market Rally Analysis

Major indexes opened stronger, but confirmed that economic data was stronger than expected.

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The Dow Jones fell back below its 200-day line, while the Russell 2000 moved above that level. The S&P 500 is still holding the 50-day line, while the Nasdaq is hitting resistance around that area.

Much of Tuesday’s weakness reflected weakness in the stocks of AMZN, Google and other megacaps.

The Invesco S&P 500 Equal Weight ETF ( RSP ) rose 0.2%, trading between the 200-day and 50-day lines.

Stock gains led to decliners on the NYSE and Nasdaq.

Investors should not think about Tuesday’s market action, coming ahead of the Fed announcement and Chairman Powell’s comments.

But the main indexes and the leading stocks have been promoted in large part in anticipation of a Fed pivot. If Powell delivers a hawkish surprise, the stock market could see a big sell-off.

Tuesday’s stock market and Treasury moves may be colored by the post-Fed reaction.

The post-Fed reaction is likely to continue, perhaps reversing, on Thursday. Friday’s jobs report could hurt the stock market.

The leading grains showed mixed behavior, with big gains still pushing individual names higher or lower.

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What You Should Do Now

The stock market appears to be positive in technical terms, despite Tuesday’s decline.

Investors are likely to hold off on adding exposure until after the Fed’s rate hike and Powell’s comments. They may choose to take a smaller exposure going into Wednesday afternoon’s announcement based on their risk tolerance.

Although the Fed meeting is like financial news for the market, don’t forget the actual earnings.

Earnings aren’t as market-moving as last week’s megacap releases, but still have a big impact on individual stocks.

The coming days will be key for market gathering. So prepare your checklist. Prepare and be prepared to add or reduce exposure.

Read The Big Picture every day to stay in touch with the market leading stocks and sectors.

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

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