Dow Jones futures were higher after Monday’s stock market action. On Wednesday, an important inflation report – the Ministry of Labour’s consumer price index – will be published. And Nvidia shares plunged more than 6% after the chip giant issued an earnings warning for the current quarter.
American International (AIG), Novavax (NVAX), Shockwave Medical (SWAV) and Take-Two Interactive (TTWO) were important earnings factors after the close on Monday.
AIG shares rose nearly 1%. Vaccine maker Novavax crashed 33% after cutting its 2022 revenue guidance due to lack of demand for its Covid-19 vaccine. Shockwave jumped nearly 8% in extended trade. Video game maker Take-Two fell around 7%.
Meanwhile, Perrigo (PRGO), Planet Fitness (PLNT) and Ralph Lauren (RL) will report ahead of Tuesday’s opening.
Stock market today: Nvidia shares plunge
On Monday, the Dow Jones Industrial Average rose 0.1%, while the S&P 500 fell 0.1%. The tech-heavy Nasdaq composite fell 0.1%, extending Friday’s mild losses.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.3%, and the SPDR S&P 500 (SPY) fell 0.1%.
Graphics chip maker Nvidia (NVDA) triggered a sell-off in chip stocks on Monday after warning that its earnings outlook for its fiscal second quarter would fall below previous estimates. The company announced preliminary sales of $6.7 billion for the quarter ended July 31. It had previously forecast sales of $8.1 billion for the period. It will announce official results on August 24. The Vaneck Semiconductor ETF (SMH) fell 1.7% on Monday. Other chip stocks Advanced Micro Devices ( AMD ) fell more than 2%.
Elsewhere, Tesla ( TSLA ) pared gains to 0.8% on Monday. Among Dow Jones leaders, apple (AAPL) and Microsoft (MSFT) lost 0.3% and 0.9% respectively in today’s stock market.
In a strengthened stock market environment, Dow Jones stocks Cola (KO) and UnitedHealth (UNH) — as well as Monolithic power systems (MPWR), Ollie’s Bargain Outlet (OLLI) and Vertex Pharmaceuticals (VRTX) — is among the best stocks to buy and watch.
UnitedHealth and Vertex are IBD Leaderboard stocks. Ollie’s and Vertex were featured in this week’s Stocks Near A Buy Zone column. Vertex is also an IBD SwingTrader idea.
Dow Jones Futures Today: Treasury Yields, Oil Prices, Inflation Report
Ahead of Tuesday’s opening, Dow Jones futures rose by 0.15% against fair value, while S&P 500 futures and Nasdaq 100 futures rose by approx. 0.1% each. Keep in mind that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular session.
The 10-year Treasury yield ticked lower on Monday, closing at 2.76%, giving up some of Friday’s gain. The 10-year yield is trying to recover after hitting its lowest level since early April. Meanwhile, US oil prices rose more than 1.5%, with West Texas Intermediate futures trading above $90 a barrel.
The Ministry of Labour’s consumer price index will be released early Wednesday. Consumer prices are expected to rise 0.2% in July, down from June’s 1.3% jump, according to Econoday estimates. Still, inflation is expected to rise 8.7% in July from a year ago, slowing from June’s 9.1% year-over-year gain.
What to do in the current stock market rally
In recent weeks, IBD has upgraded its market outlook from “uptrend under pressure” to “confirmed uptrend” due to improved stock market conditions.
With the market showing signs of strength, investors have the green light to increase exposure but keep positions small to begin with. If a new purchase starts to make progress, methodically increase your exposure. There is still a lot of uncertainty for the stock market to navigate, so it still makes sense to have a good amount of cash on hand.
Friday’s The Big Picture column commented, “It was another resilient performance for the stock market on Friday, leaving bulls feeling pretty good about the confirmed uptrend.”
If you are new to IBD, consider taking a look at the stock trading system and CAN SLIM basics. Recognizing chart patterns is a key to investment guidelines. IBD offers a wide variety of growth stock lists, such as Leaderboard and SwingTrader.
Investors can also create watch lists, 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: Coca-Cola, UnitedHealth
Dow Jones soft drink giant Coca Cola is building the right side of a flat base that has a buy point of 67.30. Shares are testing their 50-day line amid a three-day losing streak, as they fell 0.65% on Monday.
Health insurance giant and IBD Leaderboard stock UnitedHealth is in buy territory above its double-bottom-with-handle buy point of 518.80 after Monday’s 0.3% gain, according to IBD MarketSmith chart analysis.
UNH stock scores a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics.
4 top growth stocks to watch right nowra stock market rally
Top stocks to watch: Monolithic, Ollie’s, Vertex
Thursday IBD Stock Of The Day Monolithic Power Systems continues to build the right side of a consolidation with a buy point at 580.10. Meanwhile, shares are about 3% above an early entry of 514.80. Keep an eye out for a potential handle to offer another alternative point of purchase. The share rose 0.6 percent on Monday.
Ollie’s Bargain Outlet is back from its 10-week line – a critical support level – placing the top discount retailer in a new buying zone. Shares are also cutting a handle after a major cup base, setting the latest buy point at 72.37. Current price action is about 10% away from this entry.
IBD SwingTrader stock Vertex Pharmaceuticals rose 2.1% Monday, breaking out of buy territory past a cup handle at 279.23. The 5% hunting zone goes up 293.19. The stock’s June 23 breakout is back on track following last week’s second-quarter earnings results.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares pared gains to 0.8% on Monday, recovering a small portion of Friday’s 6.6% drop. Last week, shares hit their highest level since early May, but they are now finding resistance around the 200-day line, which is a key level to watch. On Friday, the company announced that a 3-for-1 stock split will take place on August 24.
The stock is about 30% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple fell 0.3% on Monday, extending a losing streak to three sessions. In recent sessions, the stock has regained its 200-day line for the first time since May 5.
Microsoft fell 0.9% on Monday, falling for the second day in a row. The software giant remains below its long-term 200-day line. The stock closed about 20% off its 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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