Dow Jones climbs 500 points ahead of inflation data; Fed meeting; Tesla stock is nearing the 2022 low

Dow Jones futures were lower ahead of Tuesday’s open after the Dow Jones Industrial Average rose 528 points on Monday. Tesla stock slipped more than 6% on Monday, closing just above its 2022 lows.


Inflation data, Fed meeting

Consumer inflation data is due Tuesday morning. According to Econoday estimates, the CPI is expected to rise 0.3% in November and 7.3% yoy. In addition, the next Federal Reserve monetary policy meeting takes place on Tuesday and Wednesday.

While the Fed has already forecast a 50 basis point hike, investors will be looking for more guidance on the Fed’s plans. A reversal from aggressive tightening looks unlikely, but some pause from punitive rate hikes would be welcome. According to the CME’s FedWatch tool, traders estimate a 74 percent chance of a 50 basis point rate hike.

The 10-year Treasury yield rose to 3.61% on Monday.

late monday, oracle (ORCL) rose 3% after the company’s earnings and sales numbers beat analysts’ estimates. More earnings reports included this week Darden restaurants (DRI) and lennar (LEN).

stock market today

On Monday, the Dow Jones Industrial Average was up 1.6%, or 528 points, and the S&P 500 was up 1.4%. The tech-heavy Nasdaq Composite followed, up 1.3%. Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 1.3% and SPDR S&P 500 (SPY) was up 1.4%.

Giant of electric vehicles Tesla (TSLA) traded 6.3% lower on Monday. Among the Dow Jones stocks Apple (AAPL) rose 1.6% and Microsoft (MSFT) is up 2.9% in today’s stock market.

Allegro MicroSystems (ALGM), IBD Leaderboard Stocks Dexcom (DXCM), KLA (KLAC) and Trane Technologies (TT) – as well as Dow Jones names Caterpillar (CAT), home depot (HD) and United Health Group (UNH) – are among the top stocks to buy and watch.

Dexcom and Trane are IBD Leaderboard stocks. UnitedHealth was featured in this week’s “Stocks near a buy zone” column. Allegro was a recently selected IBD 50 Stocks To Watch. Caterpillar and Dexcom were the most recent IBD Stock Of The Day companies.

4 top growth stocks to buy and watchrightde Stock market rally

Dow Jones Futures Today: Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures, S&P 500 futures and the tech-heavy Nasdaq 100 futures were all down 0.1% from fair value. Keep in mind that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate to actual trading in the next regular trading session.

U.S. oil prices rose more than 3% on Monday, recovering from their yearly lows. West Texas Intermediate futures traded just above $73 a barrel.

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What to do in the stock market rally?

Now is an important time to read the IBD column, The Big Picture, where the stock market trend is back in a “confirmed uptrend.”

While the Nasdaq and S&P 500 indices remain in uptrends, defense is still better than offense at this point due to ongoing market volatility. This means it’s okay to look for stocks to buy, but keep positions small initially while keeping your overall exposure small.

What kind of feedback do you get from the market when it comes to new purchases? Are your recent purchases making solid progress? In that case, it’s okay to give them some space. But don’t be afraid to take partial profits when a profit reaches at least 10%. When new buys go the wrong way or meet immediate sells, cut losses when the stock is down 3%-4% instead of waiting for the 7%-8% rule to trigger.

(See IBD stock lists such as IBD 50 and stocks near a buy zone for more stock ideas.)

Five Dow Jones stocks to buy and watch

Dow Jones Stocks to Buy and Watch: Caterpillar, Home Depot, UnitedHealth

Dow Jones member Caterpillar nearing buy point of a cup base of 238, following Monday’s 2.5% gain, according to pattern recognition by IBD MarketSmith. CAT stocks are showing a solid 95 out of 99 perfect IBD Composite Ratings, according to the IBD Stock Checkup.

Hardware retailer Home Depot ended Monday less than 1% below the buy point of a cup-and-handle basis of 329.77 after the session rose 2.3%.

Healthcare giant UnitedHealth Group is tracing a flat base with a buy point of 558.20. Shares are down just 2% from Monday’s last entry.

Top stocks to buy and watch: Allegro, Dexcom, KLA, Trane

Allegro MicroSystems ended Monday range-bound behind a cup with the buy point at 32.07 after the day’s slight gain. ALGM shares rose 0.1% on Monday. And the 5% pursuit zone rises to 33.67.

IBD leaderboard stock Dexcom attempted to break out above a buy point of 123.46 on a flat basis but is about 5% below entry after recent losses. Dexcom shares rose 0.3% on Monday.

Chip leader KLA is still moving above a cup with handle entry of 392.60 after a 1.9% rise on Monday. Bullishly, the relative strength line continues to make new highs in the ongoing market volatility.

Trane Technologies ended Monday about 4% below a buy point of 181.72 in a cup with a handle after the session’s slight decline.

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

Tesla stock

Tesla shares slipped 6.3% Monday, giving up all of Friday’s gains and returning to recent lows.

In the last few weeks, TSLA shares hit their lowest level since November 23, 2020, hitting a new 52-week low at 166.19. Shares closed at 167.82 on Monday, about 58% below their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares rose 1.6% on Monday but are still below their 50-day moving average after last week’s losses. The stock is down more than 20% from its 52-week high.

Microsoft rose 2.9% on Monday as shares continue to hold above the 50-day moving average. The software giant remains about 27% below its 52-week high.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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