Dow falls ahead of Fed rate hike decision, Powell comments; Tesla boosts production in China

The Dow Jones Industrial Average briefly fell more than 225 points on Wednesday ahead of the Federal Reserve’s rate hike decision, expected in the afternoon. social media company Break (SNAP) plunged as much as 13% after falling short of earnings estimates. And You’re here (TSLA) fell even after Reuters reported that the electric vehicle giant planned to increase production at its Shanghai plant due to growing demand.


The Fed’s two-day policy meeting ends Wednesday, with a decision on rate policy at 2 p.m. ET, followed by comments from Fed Chairman Jerome Powell. The Fed is widely expected to raise the fed funds rate by 25 basis points to a range of 4.50% to 4.75%. Another quarter-point hike is expected in March, bringing the fed funds rate very close to the Fed’s terminal rate of 5% to 5.25%. This is where the Fed thinks it can pause rate hikes to let past increases work their way through the economy.

ADP released its jobs report on Wednesday, and it showed January payrolls were 106,000, below the estimate of 158,000 and down from 235,000 the previous month. The ADP report is a precursor to the jobs report released Friday by the Labor Department.

Earnings Drivers: AMD, Amgen

Advanced micro-systems (AMD) rebounded 5% after the company beat its fourth-quarter guidance on Tuesday night, while guiding its sales outlook for the current quarter lower. Drug giant Dow Jones Amgen (AMGN) fell 2.3% after its mixed fourth quarter earnings report.

Early Wednesday, Interactive Platoon (PTON) jumped 10% after its fiscal second quarter results.

Metaplatforms (META) will report after market close, while Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL) are scheduled for Thursday evening.

stock market today

Electric vehicle leader Tesla was down 1.1% on Wednesday morning. Dow Jones technology giants Apple and Microsoft (MSFT) were mixed after the stock market opened today.

IBD Ranking Stock Impinj (IP), Etsy (ETSY) and wing stop (WING) – as well as Dow Jones stocks JPMorgan Chase (JPM) – are among the best stocks to buy and watch, with continued strength in the market rally.

Impinj is an action of the IBD classification. Etsy was a recent IBD Stock of the Day. Impinj and Wingstop were featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Price, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average fell 0.4% and the S&P 500 was down 0.2%. The tech-heavy Nasdaq composite fell 0.2%, supported by the rally in AMD shares.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 0.3% and the SPDR S&P 500 ETF (SPY) fell 0.4% early Wednesday.

The 10-year US Treasury yield fell to 3.46% on Wednesday morning ahead of today’s Fed decision. The 10-year yield continues to trade below its 50-day line and just off its recent lows.

Oil prices edged higher after Tuesday’s modest advance. West Texas Intermediate futures gained less than 1% in morning trade, rebounding between $79 and $80 a barrel as investors await Wednesday’s OPEC production decision.

Stock market rally

On Tuesday, the Dow Jones Industrial Average rebounded 1.1% and the S&P 500 1.5%. The tech-heavy Nasdaq composite rose 1.7%.

Tuesday’s The Big Picture column commented: “Distribution days have been virtually non-existent since Jan. 6. The S&P 500 currently shows three, but only one had a sense of a meaningful institutional sell-off. It was Jan. 18. January, when the index fell 1.6% in higher volume.On Friday, The Big Picture increased its investment percentage to a range of 60% to 80% when the Nasdaq exceeded its 200-day line .

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

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: JPMorgan

Banking giant JPMorgan is in the 5% buy range above a fixed base buy point of 138.76 after rising 0.6% on Tuesday. The 5% buy zone peaks at 145.70. Shares of JPM traded down 0.9% on Wednesday morning.

JPM stock is posting a solid 94 out of a perfect IBD Composite Rating of 99, according to the IBD Stocks Balance Sheet. The composite rating is designed to help investors easily find the highest growth stocks.

4 best growth stocks to buy and watch in the market Stock market rally

Top Stocks to Buy and Watch: Impinj, Etsy, Wingstop

IBD Leaderboard Impinj stock ended Tuesday above a buy point of 129.12 in a cup basis after its recent breakout, as the shares rose 3.9% on Tuesday. The 5% buy zone rises to 135.58. PI stock rose 1.7% on Wednesday.

Past: Impinj’s expertise lies in radio frequency semiconductors to identify, locate and authenticate objects. While losing money in 2020, the company earned 25 cents per share in 2021. And annual earnings are expected to rise 284% to 96 cents per share this year.

Etsy is back above a buy point of 137.01 in a handle cup after Tuesday’s 2.1% rise. With the stock regaining entry, the 5% buy zone rises to 143.86. Etsy shares were down 0.3% on Wednesday morning.

Past: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their wares. It has a unique business model that over the past few years has grown from an e-commerce niche market to a premier shopping destination in many categories.

Wingstop is rapidly approaching a buy point of 170.97 in a lopsided cut basis, with a 1.2% gain on Tuesday. Keep an eye out for a potential grip to provide lower entry. WING stock was down 0.3% on Wednesday morning.

Past: The Dallas-based restaurant chain has more than 1,900 locations in the United States and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the United Kingdom. The company added 40 net stores in the prior quarter. Winnings are due February 22.

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Stocks to buy and watch in the stock market rally

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

Company Name Symbol Correct point of purchase Basic type
Freak (MNST) 104.75 Flat bottom
Summit (VRTX) 324.85 cup bottom
Axon (AXONE) 189.72 Mug with handle
Etsy (ETSY) 137.01 Mug with handle
JP Morgan (JMP) 138.76 Flat bottom
wing stop (WING) 170.97 cup bottom
Source: IBD data as of February 1, 2023

Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live

Tesla Stock

Tesla stock rebounded 3.9% on Tuesday, rebounding from Monday’s plunge. Despite their strong rebound since Jan. 6, stocks are still below the 200-day line. And Tesla stock closed about 57% off its 52-week high on Tuesday.

Shares appeared to add to Tuesday’s gains, but fell 1.1% on Wednesday. According to Reuters, the electric vehicle giant plans to ramp up production at its Shanghai plant over the next two months to meet increased demand from its recent price cuts.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.9% on Tuesday, recouping some of Monday’s 2% selloff. Stocks are still holding above their 50-day line after strong gains in recent sessions. The stock remains around 20% off its 52-week high. Apple will release its quarterly results on Thursday evening. AAPL stock fell 0.6% on Wednesday.

Microsoft stock rose 2.1% on Tuesday, rebounding from support at its 50-day line, which it found last week. Shares remain 22% off the 52-week high. MSFT traded a fraction on Wednesday.

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


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