Dow Jones falls on Powell rate hike Warning; AMD, Nvidia push ban on AI chips to China
The Dow Jones Industrial Average fell on Wednesday, as central bank chief Jerome Powell warned of two more rate hikes this year at a European Central Bank forum in Portugal. Chip giant Advanced Micro Devices (AMD) and Nvidia (NVDA) sold off after the Wall Street Journal reported that the Biden administration is considering new restrictions on exports of artificial intelligence chips to China.
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Powell joined a discussion of the European Central Bank expected to focus on tackling inflation, where he reiterated that most policymakers expect two more rate hikes this year. Later on Wednesday, he will hold a public talk with the governor of the central bank in Spain.
Two weeks ago, the Federal Reserve skipped a rate hike, but signaled that the key rate is likely to rise in July and again after that. As such, investors expect a more than 74% chance of a rate hike in the upcoming July meeting.
early Wednesday, AeroVironment (OPEN), General Mills (GIS) and Jefferies (JEF) were important earnings factors.
AVAV stock jumped more than 6%, while General Mills stock fell 4.4% in morning trading. Jefferies shares rose 1% in morning action.
The stock market today
AMD shares fell more than 2%, while Nvidia shares fell 2.1% in early trading. Electric vehicle giant Tesla ( TSLA ) added 2.1% Wednesday morning after Tuesday’s pullback.
Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was mixed after today’s stock market opening.
Other stock market leaders in the stock market rally include Alphabet (GOOGL) and Meta Platforms (META). Google shares fell 0.9%, while Meta shares lost 0.6% in morning trading.
Chipotle Mexican Grill (CMG), McKesson (MCK), MongoDB (MDB) and Lamb Research (LRCX) – as well as Dow Jones stocks JPMorgan Chase (JPM), Merck (MRK) and Salesforce (CRM) – are among the best stocks to watch in the ongoing pullback in the stock market.
Tesla is an IBD Leaderboard stock, Floor & Decor remains an IBD SwingTrader stock, while MongoDB 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 0.3%, while the S&P 500 lost 0.35%. The technology-heavy Nasdaq composite fell 0.2% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) was trading down 0.5%, while the SPDR S&P 500 ETF ( SPY ) was down 0.3% early Wednesday.
The 10-year US Treasury yield ticked down to 3.74%. The yield has recently increased in a range between 3.57% and 3.85%. It settled higher on Tuesday at 3.76%.
Oil prices rose modestly on Wednesday morning, still hovering near recent lows after Tuesday’s losses. West Texas Intermediate futures rose 0.5% to around $68 a barrel.
Stock market action
On Tuesday, the Dow Jones Industrial Average rose 0.6%, while the S&P 500 gained 1.15%. The technology-heavy Nasdaq composite rose 1.65%.
Tuesday’s Big Picture column commented: “The show of strength after the recent pullback was encouraging. The Nasdaq Composite ended the day with a meaty 1.7% gain. The tech-heavy index rallied from its 21-day exponential moving average and closed just shy. of 10 – the agenda.”
Now is an important time to read IBD’s The Big Picture column as the stock market remains in an uptrend but pulls back.
Five Best Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: JPMorgan, Merck, Salesforce
Dow Jones bank leader JPMorgan is about 3% below a 143.37 buy point on a flat basis after Tuesday’s weak rally. The shares are right at the 50-day line, when they rose on Wednesday.
Drug giant Merck is forming a flat base with a buy point at 119.65 as the stock rose 0.2% on Tuesday, still below its 50-day mark. The MRK share fell 0.1 percent on Wednesday.
Salesforce managed to stabilize after post-earnings decline. It is now testing support at the 50-day line. The megacap tech earlier edged past a pair of alternative entries at 194.01 and at 200.10, according to IBD Leaderboard analysis.
Over the past few weeks, shares reached the 20% profit zone from a 178.94 cup-with-handle entry. CRM shares fell 0.5% on Wednesday morning.
4 top growth stocks to buy and watch Stock market rally
Best stocks to buy and watch: Chipotle, McKesson, MongoDB, Lam Research
IBD Leaderboard Watch List Chipotle is testing support at its 10-week line and building a flat base with a buy point at 2,139.88, according to IBD MarketSmith pattern recognition. An early entry at 2,092.51 is also in play due to a trend line. Chipotle was a recent IBD Stock Of The Day. CMG shares rose a fraction on Wednesday morning.
IBD SwingTrader stock McKesson is in buy territory past a 401.53 cup-with-handle entry. The 5% buy zone goes up to 421.61. Shares were slightly lower on Wednesday.
MongoDB is trading closely following its recent earnings-driven gap up, offering a new entry. The three-week tight formation shows a buy point at 398.89, while aggressive investors can use a trendline entry around 386. MDB shares rose 0.2% on Wednesday morning.
Lam Research moved above an early buy point of 615.80 on Monday after a 1.9% rally. And shares topped a three-week tight pattern with an entry of 630.72 during Tuesday’s advance. LRCX shares lost 1.5% on Wednesday.
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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) | 75.45 | Cup with handle |
Source: IBD data as of June 28, 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 3.8% higher Tuesday, rebounding from two straight days of losses. Despite recent losses, Tesla shares remain firmly outside buy territory beyond a double-bottom buy point at 207.79.
TSLA stock looked to extend Tuesday’s gains, rising 2.1% on Wednesday.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock hit another record high Tuesday, trading as high as 188.39. Shares continue to hold sharply above a buy point of 157.38. Early Wednesday, AAPL stock was down 0.1%.
Microsoft shares rose 1.8% on Tuesday, recovering from Monday’s drop. On June 16, MSFT shares reached a record high of 351.47. In recent weeks, the stock reached the 20% to 25% profit zone from a buy point of 276.76, so investors could have taken at least some profit there. And on Wednesday morning, Microsoft shares were up 0.2%.
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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