Dow Jones falls 150 points on Powell’s rate hike Comments; Tesla shares fall when downgraded

The Dow Jones Industrial Average fell 150 points on Wednesday morning as investors digested Fed Chairman Jerome Powell’s comments on monetary policy ahead of his address to the House Financial Services Committee. Tesla shares were downgraded by Barclays.


In prepared remarks Wednesday, Powell reiterated that more rate hikes are likely to bring down inflation, saying “Nearly all FOMC participants expect it would be appropriate to raise interest rates somewhat further by the end of the year.”

Powell is scheduled to address the House at 10 a.m. ET. Powell makes a similar appearance the next day before the Senate Banking Committee. Investors could potentially update expectations for rate hikes amid the upcoming comments.

Investor expectations see a nearly 77% chance of a quarter-point hike at the Fed’s July meeting, according to the CME FedWatch Tool. That’s up from 60% a week ago.

On the earnings front, FedEx (FDX) reported after the close on Tuesday. The shipping giant posted mixed results for its late fourth-quarter report on Tuesday to end fiscal 2023. The company said earnings fell 28% in Q4, compared with an average of 27% over the previous three quarters. The company’s sales decline accelerated for a third straight quarter, missing Wall Street views for a third consecutive period.

FDX stock pared losses to just 0.3% in morning trading. Ahead of the earnings results, the stock tried to break out past a flat base’s 235.81 buy point.

The stock market today

EV giant Tesla ( TSLA ) reversed 1% lower Wednesday morning in the wake of the analyst downgrade. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was lower after today’s market opening.

Dexcom (DXCM), Chipotle Mexican Grill (CMG), McKesson (MCK) and Year (ROKU) — as well as Dow Jones stocks Boeing (BA), JPMorgan Chase (JPM) and Salesforce (CRM) – is among the best stocks to buy or watch in the stock market trend.

Tesla is an IBD Leaderboard stock. Dow Jones giant Boeing is an IBD SwingTrader stock and is featured in this week’s Stocks Near a Buy Zone column.

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Dow Jones today: Oil prices, Treasury yields

After Wednesday’s opening bell, the Dow Jones Industrial Average fell 0.4%, while the S&P 500 lost 0.45%. And the Nasdaq composite fell 0.7% in morning action.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) was trading down 0.7%, while the SPDR S&P 500 ETF ( SPY ) was down 0.45% early Wednesday.

On Wednesday, the 10-year US Treasury yield ticked up to 3.78%. The yield has recently fallen in a range between 3.57% and 3.85%, settling somewhat lower on Tuesday at 3.72%.

Oil prices continued to hold fairly steady on Wednesday morning, near recent lows. West Texas Intermediate futures rose near $72 a barrel, ahead of Thursday’s weekly oil inventories report from the Energy Information Administration.

Stock market action

On Tuesday, the Nasdaq composite fell less than 0.2% – a positive result after falling as much as 0.9% early in the day. The S&P 500 pared losses to 0.5%. The Dow Jones Industrial Average lagged behind with a 0.7% decline.

Tuesday’s Big Picture column warned: “After gaining 5.8% in May and nearly 6% so far in June, the Nasdaq looks stretched. The index is more than 9% above its 50-day moving average, and on Thursday exceeded the gap 10%. That’s the most widened since the index peaked in early February.”

Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market trend.

Five Best Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Boeing, JPMorgan, Salesforce

Dow Jones aerospace giant and IBD SwingTrader stock Boeing saw its breakout attempt falter on Tuesday, falling 3.5%. The BA share fell 0.4 percent on Wednesday.

Dow Jones bank leader JPMorgan is just below a 143.37 flat-base buy point after Tuesday’s 0.5% drop. JPM shares rose 0.2% early Wednesday.

Salesforce managed to stabilize after post-earnings decline. It is now testing support at the 21-day exponential moving average. The megacap tech previously surpassed a pair of new alternative entries at 194.01 and at 200.10, according to IBD Leaderboard analysis.

In recent weeks, shares have reached the 20% profit zone from a 178.94 cup-with-handle entry, and are now trying to bounce off support at the 10-week line. CRM shares rose on Wednesday morning.

4 top growth stocks to buy and watch Stock market rally

Best stocks to buy and watch: Dexcom, Chipotle, McKesson, Roku

Dexcom remains in buy territory past a flat-base buy point at 126.44, despite a 0.1% drop on Tuesday, according to IBD MarketSmith pattern recognition. The 5% buy range goes up 132.76. DXCM shares rose on Wednesday.

IBD Leaderboard Watchlist stock Chipotle is trading tight after a big advance, making a new entry at 2,139.88. Meanwhile, the stock is also pulling back to its 10-week line. A decisive return from that level will also create a buying opportunity. The CMG share rose 0.3 percent on Wednesday morning.

IBD SwingTrader stock McKesson is in buy territory past a 401.53 cup-with-handle entry amid a three-day winning streak. Shares rose 0.2 percent early Wednesday.

Streaming giant Roku is building a cup base with a buy point of 76.62. The stock is likely to add a handle, which would see a lower entry at 75.45. Roku shares were up 0.1% early Wednesday.

Learn how to time the market with IBD’s ETF Market Strategy

Best shares to buy and watch in stock market rally

These are the four best stocks to buy and watch in today’s stock market, including a Dow Jones leader.

company name Symbol Right point of purchase Type of point of purchase
ASML (ASML) 683.18 Cup with handle
Salesforce (CRM) 200.00 Consolidation
Cloudflare (NET) 66.20 Double bottom
Year (YEAR) 76.62 Cup base
Source: IBD data as of 20 June 2023

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

Tesla shares

IBD Leaderboard stock Tesla ran 5.4% higher Tuesday, hitting new 2023 highs. Shares are strongly extended above a double-bottom base buy point of 207.79. They closed Tuesday 13% off their 52-week high.

Threatening to give up some of Tuesday’s gains, TSLA shares were down 1% on Wednesday morning after Barclays downgraded them from buy to hold, with a price target of 220 to 260.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares are close to a record high on Tuesday, after finishing slightly higher. On Friday, shares traded as high as 186.99. The stock continues to hold sharply above a buy point of 157.38. Early Wednesday, AAPL shares fell 0.1 percent.

Microsoft shares fell another 1.25% on Tuesday, falling sharply for a second straight session. Last week the stock reached a record high of 351.47. MSFT stock is in the 20%-25% profit-taking zone from a 276.76 flat-base buy point, so investors are at least taking some profit. And on Wednesday morning, Microsoft shares were 0.6% lower.

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


Top Growth Stocks to Buy and Watch

Learn how to time the market with IBD’s ETF Market Strategy

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