Dow Jones Futures Rise Ahead of Fed Rate Hike Decision, Powell Comments; GameStop rockets
Dow Jones futures rose slightly on Wednesday morning ahead of the Federal Reserve’s interest rate hike decision and Fed Chair Jerome Powell’s comments. Retailer GameStop (GME) rocketed 50% on a surprise profit.
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The Federal Reserve’s two-day meeting ends on Wednesday. The Federal Reserve may be reluctant to raise its benchmark interest rate on Wednesday as bailouts for several US regional and community banks remain less than certain.
As of Tuesday, markets had priced in 88% odds of a quarter-point rate hike at the conclusion of Wednesday’s Federal Reserve meeting. That would raise the Fed’s key interest rate to a range of 4.75% to 5%. Still, Goldman Sachs economists are sticking to their prediction that the Fed will pause interest rate hikes “due to stress in the banking system.”
The Fed’s rate hike decision is due at 2:00 PM ET, with Powell’s comments expected at 2:30 PM (For our latest coverage of the market’s action, go to our Stock Market Today page.)
Revenue Results: GameStop, Nike
Array Technologies (ARRY), GameStop, Nike (OF), Ollie’s Bargain Outlet (OLLI) and Winnebago (WGO) were income pullers on Wednesday morning.
Array shares fell 1.7%, while NKE shares fell more than 1% in early morning trading. The OLLI share rose 12%. And Winnebago stock rose 3% in premarket action.
GameStop blew away expectations for fourth-quarter earnings late Tuesday, reporting its second positive period in the last 12 quarters. Adjusted earnings rose to 16 cents per share, against a loss of 47 cents last year. Net sales fell 1.2% to $2.226 billion. Analysts had expected GameStop to report a loss of 13 cents a share on a 3.2% decline in revenue to $2.18 billion.
The stock market today
Chip leader Nvidia (NVDA) rose nearly 1% after a series of price hikes amid the company’s 2023 GPU Technology Conference. Electric vehicle giant Tesla (TSLA) traded 1.3% higher on Wednesday. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was slightly lower before today’s market opening.
Chip leader Advanced micro Units (AMD), IBD SwingTrader stock Meta platforms (META) and IBD Leaderboard Palo Alto Networks (PANW) — as well as Dow Jones shares Nike and Salesforce (CRM) – are among the best stocks to watch in the ongoing stock market correction.
Palo Alto is an IBD Leaderboard stock. Microsoft was featured in this week’s Stocks Near a Buy Zone column. And Meta is an IBD SwingTrader stock.
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Dow Jones today: Oil prices, Treasury yields
Ahead of Wednesday’s opening bell, Dow Jones futures were up less than 0.1% against real value, while S&P 500 futures were lower. Nasdaq 100 futures traded down 0.2% in morning action, with Google parent Alphabet (GOOGL) down more than 1%, at the bottom of the list.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.1% and the SPDR S&P 500 ETF (SPY) rose 0.1% early Wednesday.
The 10-year US Treasury yield jumped to 3.6% on Tuesday. On Wednesday, the 10-year added to those gains, ticking higher at 3.62% ahead of the Fed rate decision.
US oil prices stalled after Tuesday’s rally pushed West Texas Intermediate back above $69 a barrel. WTI futures traded down 0.6% early Wednesday, just above $69 a barrel, ahead of the Energy Information Administration’s weekly oil inventories.
Stock correction
On Tuesday, the Nasdaq composite rose 1.6%, while the S&P 500 rose 1.3%. The Dow Jones Industrial Average rose 1%.
Tuesday’s Big Picture column commented: “Leaderboard is lightly invested ahead of Wednesday’s policy statement. But action in individual growth stocks has improved quite a bit. So there should be ample opportunity to increase exposure, especially if market conditions continue to improve. The market proves itself more, exposure should be kept between 0% and 20%.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market correction.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Nike, Salesforce
Since the Oct. 3 bottom, Nike shares have rallied as much as 59% to a recent high of 131.31. Now, the stock is consolidating within a flat base that offers a buy point at 131.41, according to IBD MarketSmith pattern recognition. NKE shares fell more than 1% early Wednesday after the company’s earnings results.
After Tuesday’s advance, the stock bullishly regained its 50-day moving average, a key benchmark. The relative strength line is also holding up well during the rapidly developing stock market correction.
In recent weeks, Dow Jones leader Salesforce has shown great upside following strong results for the fourth quarter. The stock is now above the 178.94 cup-with-handle entry after last week’s big rise. Nevertheless, the market is in a correction, so investors should avoid new purchases until the market environment improves. CRM stock was down 0.1% early Wednesday.
3 top growth stocks to watch Stock correction
Top stocks to watch: AMD, Meta, Palo Alto
Advanced Micro Devices broke out past an 89.04 buy point in a flat base last week and has a solid 8% cushion over its entry despite two straight days of losses. The 5% buy range topped at 93.49. AMD shares fell 0.2 percent on Wednesday morning.
Background story: At the beginning of February, the chip manufacturer reported stronger sales of data center chips than expected in the fourth quarter. But AMD tempered that news with a soft outlook for the current period.
Background story: Like its social media rivals, Meta is struggling due to a sharp reduction in ad revenue as clients reel over macroeconomic concerns, recession fears and higher interest rates. This comes as it spends billions of dollars in a risky effort to build the “metaverse,” a virtual reality world that has yet to catch on.
IBD Leaderboard stock Palo Alto Networks broke out past a cup-with-handle buy point at 192.94 during Tuesday’s 2.7% advance. The buying range goes up to 202.59. The PANW share rose 0.3 percent on Wednesday.
Background story: On Feb. 21, the cybersecurity giant announced strong results for the quarter ended in January, with earnings reaching $1.05 per share, up 81% from a year earlier, on a 26% jump in revenue to $1.7 billion.
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Shares to watch in the stock market Correction
These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.
| company name | Symbol | Right point of purchase | Type of point of purchase |
|---|---|---|---|
| Meta platforms | (META) | 197.26 | Flat base |
| Nike | (of) | 131.41 | Flat base |
| Palo Alto Networks | (PANW) | 192.94 | Cup with handle |
| Salesforce | (CRM) | 178.94 | Cup with handle |
Source: IBD data as of March 21, 2023
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla shares
Tesla shares rose 7.8% on Tuesday, extending its bullish rally from its 50-day moving average. Shares closed Tuesday about 49% off their 52-week high.
TSLA shares rose 1.3% Wednesday morning as it looked to extend Tuesday’s rally.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares rose 1.2% on Tuesday, adding to Monday’s 1.55% rally. Shares closed at their highest level since September 12. AAPL fell on Wednesday.
Microsoft shares broke out above a flat base of 276.86 buy points on Friday. But the stock gave up that entry during this week’s losses. MSFT shares fell 0.2% early Wednesday.
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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