Dow Jones Futures Rise: What To Do As Stock Market Continues To Drop; Jobs Report Ahead

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Dow Jones futures were higher early Tuesday, as the stock market continues to fall in the wake of Friday’s plunge — which was fueled by hawkish talk from Federal Reserve Chairman Jerome Powell — heading into the final two sessions of August. The Labor Department’s August jobs report is due out Friday morning.


Stock Market Today

On Monday, the Dow Jones Industrial Average declined 0.6%, while the S&P 500 lost 0.7%. The tech-heavy Nasdaq composite slid 1%. And the small-cap Russell 2000 dropped 0.9%.

Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 1%, and SPDR S&P 500 (SPY) fell 0.7%.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 32099.65 -183.75 -0.57
S&P 500 (0S&P5) 4030.76 -26.90 -0.66
Nasdaq (0NDQC ) 12017.67 -124.04 -1.02
Russell 2000 (IWM) 187.17 -1.81 -0.96
IBD 50 (FFTY) 29.48 -0.08 -0.27
Last Update: 4:40 PM ET 8/29/2022

EV giant Tesla (TSLA) skidded 1.1% Monday. Among Dow Jones leaders, Apple (AAPL) and Microsoft (MSFT) traded down 1.4% and 1.1%, respectively, in today’s stock market.

In the ongoing stock market weakness, Arista Networks (ANET), Costco (COST), GlobalFoundries (GFS) and Ulta Beauty (ULTA) — as well as Dow Jones stocks Chevron (CVX) and McDonald’s (MCD) — are among the top stocks to buy and watch. Keep in mind the market’s increased volatility is a good reason for investors to be more defensive.

Costco is an IBD Leaderboard stock in the wake of a recent breakout, while Chevron and Ulta Beauty were featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Futures Today: Treasury Yields, Oil Prices, Jobs Report

Ahead of Tuesday’s open, Dow Jones futures rose 0.7% vs. fair value, and S&P 500 futures gained 0.8%. Nasdaq 100 futures rebounded 1.1% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield rose to 3.11% Monday, extending last week’s gains. The 10-year Treasury yield closed at its highest level since June 28. Meanwhile, U.S. oil prices rose more than 4%, with West Texas Intermediate futures trading around $97 per barrel.

The Labor Department’s August jobs report is due out Friday morning. The U.S. economy is expected to add 293,000 jobs in August — per Econoday estimates — down from July’s 528,000 increase. Average hourly earnings in August are expected to rise 0.4% vs. the previous month and 5.2% year over year.

What To Do In The Current Stock Market Weakness

On Friday, the stock market weakness resulted in a change in IBD’s market outlook to “uptrend under pressure.”

An “uptrend under pressure” is a warning sign, telling you the uptrend may be running out of steam and about to slip into a correction. Although the underlying uptrend is still intact, it’s now time to proceed with caution.

During “uptrends under pressure,” investors should be careful about making any new buys. Focus only on stocks with exceptional fundamental and technical strength. Stay disciplined and flexible. At this point, the market could stabilize and move back into a “confirmed uptrend,” or it could fall into a correction.

The current environment is the perfect time to look for stocks that are holding up best. An easy way to identify stock market leadership is to use the relative strength line. A strong RS line while the stock market struggles is a strong technical indicator.

Friday’s The Big Picture column commented, “The stock market had been rallying in hopes for a soft landing for the U.S. economy. But Powell’s speech reminded Wall Street that more rate hikes are on the way so that inflation doesn’t stay stubbornly high. Fed funds futures traders put the chances at just over 60% that the Fed will raise its key lending rate by another 75 basis points in September. That would bring the Fed funds rate up to 3% to 3.25%.”

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.

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Chevron, McDonald’s

Dow Jones stock Chevron is building a cup base that has a 182.50 buy point, amid a strong performance by energy stocks so far this year. An early entry at 164.76 is also in play. The stock was up 0.75% Monday.

CVX stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.

McDonald’s shares are now about 3% below a 265.56 cup-with-handle entry following Monday’s 0.5% drop, according to IBD MarketSmith chart analysis. Shares are trying to find support around their key 50-day line.

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

Top Stocks To Watch: Arista, Costco, GlobalFoundries, Ulta

Arista Networks added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith chart analysis. Arista’s relative strength line is holding near recent highs despite the recent market weakness, a bullish sign. ANET shares fell 1.2% Monday.

IBD Leaderboard stock Costco fell further below its 552.81 buy point from a cup with handle, as shares inched lower Monday. Costco shares halted their slide Monday around their 200-day line. Wait for a bullish retake of the entry before buying shares.

GlobalFoundries fell back below a double bottom’s 61.98 buy point Friday, skidding 6%. An alternative entry, from a handle, is in play at 66.06. GFS stock slid another 2.65% Monday.

Cosmetics leader Ulta Beauty is right above a double bottom’s 417.08 buy point following Monday’s 1.5% gain. Shares are in a buy zone, but the current market weakness should give you some pause.

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

Tesla Stock

Tesla stock declined 1.1% Monday, extending a losing streak to three sessions. Shares of the electric-vehicle giant continue to see strong resistance around their 200-day line.

Tesla is now more than 30% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell another 1.4% Monday, as they trade about 10% away from a cup with handle’s buy point at 176.25. The stock closed right at its 200-day line. Bullishly, the stock’s relative strength line is holding at new highs, indicating steady stock market outperformance.

Microsoft fell 1.1% Monday, falling through its 50-day line and closing at its lowest level since July 26. Shares are about 24% off their 52-week high.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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