Dow Jones Dives As Powell Says Interest Rates Are ‘Likely To Be Higher’ Than Expected

The Dow Jones Industrial Average sold off nearly 300 points Tuesday, as Federal Reserve Chair Jerome Powell said “the ultimate level of rates is likely to be higher than previously anticipated.” Facebook-parent Meta Platforms (META) rallied 2% after Bloomberg reported that the social media giant plans another round of layoffs that could affect thousands of workers.


Fed chief Powell began his two days of congressional testimony Tuesday, where he’ll have the chance to explain the central bank’s planned response to inflation. Last month, the Fed raised rates by a quarter-percentage-point, and investors will be looking clues for the amount of the hike at this month’s March 21-22 meeting.

After Powell’s comments, traders now place a 50% chance of a quarter-percentage-point rate hike at the next meeting, according to the CME’s FedWatch Tool.

Guidewire (GWRE) reported mixed fiscal-Q2 results late Monday. Shares climbed around 4% in early trade. The stock is building a bottoming base with a 78.76 buy point.

Meanwhile, Dick’s Sporting Goods (DKS), Sea Limited (SE) and Thor Industries (THO) also reported their earnings results and were on the move.

Dick’s Sporting Goods shares jumped 7% on strong results, while SE stock surged 7.1% in morning trade. Thor Industries tumbled 6% after the RV manufacturer cut its full-year earnings and sales guidance.

Stock Market Today

Electric-vehicle giant Tesla (TSLA) traded down 2.9% Tuesday morning, and Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) fell modestly after the stock market open.

IBD Leaderboard stock Alteryx (AYX), Palo Alto Networks (PANW), Arista Networks (ANET) and Salesforce (CRM) — as well as Dow Jones stocks American Express (AXP) and JPMorgan Chase (JPM) — are among the top stocks to buy and watch, amid the recent stock market strength .

Palo Alto is an IBD Leaderboard watchlist stock. And Salesforce was featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Tuesday’s market open, the Dow Jones Industrial Average lost 0.9%, and the S&P 500 dropped 1%. The tech-heavy Nasdaq composite fell 0.85% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1% and the SPDR S&P 500 ETF (SPY) moved down 0.8% early Tuesday.

The 10-year U.S. Treasury yield rebounded Monday, settling at 3.98%. Then Tuesday, the 10-year yield traded higher at 3.99% amid Powell’s testimony.

Oil prices pulled back less than 1% in morning trade Tuesday. West Texas Intermediate futures traded around $80 a barrel, holding near their recent highs.

Stock Market Rally

Monday’s market ended tightly mixed. The Dow Jones Industrial Average and S&P 500 gained 0.1% apiece. The tech-heavy Nasdaq composite closed 0.1% lower after giving up solid gains.

Monday’s Big Picture column commented, “The stock market seems to be growing more confident that the Fed will be able to tame inflation without sending the U.S. economy into a harsh recession. That said, a hawkish tone this week from Powell wouldn’t be surprising as recent readings on inflation have revealed stubbornly high prices amid strong hiring and consumer spending. Inflation will eventually come down to the Fed’s preferred target around 2%, but how long will it take?”

Now is an important time to read IBD’s The Big Picture column amid the now-struggling stock market rally.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: American Express,  JPMorgan

American Express is rapidly approaching a 182.25 buy point in a giant cup with handle. Shares are just 2% below their buy point, as they inched lower Monday. Bullishly, the stock’s relative strength line is at new highs, a particularly positive sign ahead of a potential breakout. AXP stock fell 0.6% Tuesday morning.

Banking giant JPMorgan is in buy range above its 138.76 flat-base buy point amid a 0.6% loss Monday, according to IBD MarketSmith chart analysis. Shares found good support at their 50-day line in recent sessions. JPM shares traded down 0.4% early Tuesday.

JPM stock shows a solid 93 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

4 Top Growth Stocks To Buy And Watch In The Stock Market Rally

Top Stocks To Buy And Watch: Palo Alto, Salesforce

Palo Alto Networks is within striking distance of a base’s 193.01 buy point following a 12.5% surge on Feb. 22. PANW stock traded down 0.2% Tuesday morning.

Backstory: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

Last week, Dow Jones leader Salesforce staged a bullish breakaway gap past a 178.94 buy point on strong fourth-quarter results. Shares surged 11.5% Thursday and are in the 5% buy zone that goes up to 187.89. CRM stock gained 0.5% Tuesday.

Backstory: Salesforce sells software under a subscription model. Its software helps businesses organize and handle sales operations and customer relationships. The company has expanded into marketing, customer services and e-commerce. Salesforce said it has disbanded its “M&A committee,” implying it will make no more big acquisitions, amid growing pressure from activist investors.

Arista, Alteryx Above Latest Buy Points

Arista Networks is just below a 140.91 buy point from a cup base following Monday’s 1.35% advance. A decisive retake places the stock in a buy range that goes up to 147.96. ANET stock moved up 1.3% Tuesday morning.

Backstory: Arista sells switches that speed up communications among racks of computer servers packed into data centers. According to analysts, Arista is gaining ground in the so-called “enterprise” market — large companies, government agencies and educational institutions. Earnings surged 72% in the most recent quarter.

IBD Leaderboard stock Alteryx cleared a trendline buy point 66.50 within a handle on an early-stage cup. Aggressive investors could buy on the breakout above the trendline, while a conventional entry at 70.73 is also in play. Shares are just 4% away from that buy point. Alteryx moved down 0.4% Tuesday.

Backstory: The Irvine, Calif., firm created a self-service platform for data analytics. Demand is clearly strong as sales have risen from the low $100 million level per quarter in 2021 to $216 million in the third quarter of 2022, up 75% vs. a year ago, and $301 million in Q4 2022, up 73%. This rapid revenue growth is one reason why Alteryx also posted a profit of 84 cents a share in Q4, likely the biggest quarterly earnings in company history.

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Stocks To Buy And Watch In Stock Market Rally

These are six top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Buy Point
Arista Networks (ANET) 140.91 Cup base
Alteryx (AYX) 70.73 Cup with handle
American Express (AXP) 182.25 Cup with handle
Palo Alto Networks (PANW) 193.01 Consolidation
JPMorgan (JPM) 138.76 Flat base
Salesforce (CRM) 178.94 Cup with handle
Source: IBD Data As Of March 7, 2023

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Tesla Stock

Tesla stock skidded 2% Monday after the EV giant slashed U.S. vehicle pricing once again Sunday evening, the latest sign demand for Tesla vehicles may be waning after an initial boost came from January price cuts.

Despite their strong rebound since Jan. 6, shares are still below the 200-day line. That key level looms as a potential resistance area. Shares closed Monday around 50% off their 52-week high. Aggressive investors can use the Feb. 16 high at 217.65 as a potential entry. However, to be safe, Tesla stock should clear the 200-day line, which is now below 221.

Tesla shares fell 2.9% Tuesday morning, threatening to add to Monday’s losses.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares jumped 1.85% Monday, closing at their highest level since Feb. 15. The stock fell 0.9% early Tuesday.

Microsoft shares moved further above their 200-day line after Monday’s 0.6% gain. The stock is still around 20% off its 52-week high after recent declines. MSFT stock moved down 0.8% Tuesday morning.

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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