Dow Jones Falls 150 Points On Powell Rate Hike Comments; Tesla Stock Downgraded

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Dow Jones Falls 150 Points On Powell Rate Hike Comments; Tesla Stock Downgraded

June 21, 2023

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The Dow Jones Industrial Average dropped 150 points Wednesday morning, as investors digested Fed Chair Jerome Powell's comments on monetary policy ahead of his speech before the House Financial Services Committee. Tesla stock was downgraded by Barclays.

In prepared remarks Wednesday, Powell reiterated that more interest rate increases are likely to bring down inflation, saying "Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year."

Powell is scheduled to speak in front of the House at 10 a.m. ET. Powell makes a similar appearance the next day at the Senate Banking Committee. Investors could potentially update their rate-hike expectations amid the upcoming comments.

Investor expectations see a near-77% chance of a quarter-point hike at the Fed's July meeting, per the CME FedWatch Tool. That's up from 60% one week ago.

On the earnings front, FedEx (FDX) reported after the close Tuesday. The shipping giant posted mixed results for its late Q4 report Tuesday to wrap up its 2023 fiscal year. The company said its earnings fell 28% in Q4, vs. an average 27% over the prior three quarters. The company's sales declines accelerated for a third straight quarter, and for a third consecutive period missed Wall Street views.

FDX stock skidded more than 3% in morning trade. Ahead of its earnings results, the stock tried to break out past a flat base's 235.81 buy point.

Stock Market Today

EV giant Tesla (TSLA) rose slightly Wednesday morning despite the analyst downgrade. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after today's stock market open.

Dexcom (DXCM), Chipotle Mexican Grill (CMG), McKesson (MCK) and Roku (ROKU) — as well as Dow Jones stocks Boeing (BA), JPMorgan Chase (JPM) and Salesforce (CRM) — are among the best stocks to buy or watch in the stock market uptrend.

Tesla is an IBD Leaderboard stock. Dow Jones giant Boeing is an IBD SwingTrader stock and 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 0.45%, while the S&P 500 lost 0.4%. And the Nasdaq composite dropped 0.3% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 0.3%, while the SPDR S&P 500 ETF (SPY) moved down 0.35% early Wednesday.

On Wednesday, the 10-year U.S. Treasury yield ticked higher to 3.77%. The yield has recently been bobbing in a range between 3.57% and 3.85%, settling slightly lower Tuesday at 3.72%.

Oil prices continued to hold fairly steady Wednesday morning, near recent lows. West Texas Intermediate futures inched above $71 a barrel, ahead of Thursday's weekly oil inventory report from the Energy Information Administration.

Stock Market Action

On Tuesday, the Nasdaq composite fell less than 0.2% — a positive outcome after dropping as much as 0.9% early in the day. The S&P 500 reduced its loss to 0.5%. The Dow Jones Industrial Average lagged with a 0.7% decline.

Tuesday's Big Picture column cautioned, "After rallying 5.8% in May and nearly 6% so far in June, the Nasdaq looks stretched. The index is more than 9% above the 50-day moving average and on Thursday the gap exceeded 10%. That's the most extended since the index topped in early February."

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

Five Best Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Boeing, JPMorgan, Salesforce

Dow Jones aerospace giant and IBD SwingTrader stock Boeing saw its breakout attempt falter Tuesday, with a 3.5% drop. BA stock fell 0.4% Wednesday.

Dow Jones banking leader JPMorgan is just below a 143.37 flat-base buy point after Tuesday's 0.5% drop. JPM stock rose 0.2% early Wednesday.

Salesforce managed to steady itself after slumping following earnings. It is now testing support at the 21-day exponential moving average. The megacap tech previously moved past a pair of new alternative entries at 194.01 and at 200.10, according to IBD Leaderboard analysis.

In recent weeks, shares reached the 20% profit zone from a 178.94 cup-with-handle entry, and are now trying to bounce from support at the 10-week line. CRM stock inched higher Wednesday morning.

4 Top Growth Stocks To Buy And Watch In The Stock Market Rally

Best Stocks To Buy And Watch: Dexcom, Chipotle, McKesson, Roku

Dexcom remains in buy range past a flat base's 126.44 buy point, despite a 0.1% fall Tuesday, according to IBD MarketSmith pattern recognition. The 5% buy area goes up 132.76. DXCM stock inched higher Wednesday.

IBD Leaderboard watchlist stock Chipotle is trading tightly after a big advance, creating another entry at 2,139.88. Meanwhile, the stock is also pulling back to its 10-week line. A decisive rebound from that level would also create a buying opportunity. CMG stock rose 0.3% Wednesday morning.

IBD SwingTrader stock McKesson is in buy range past a 401.53 cup-with-handle entry amid a three-day win streak. Shares were up 0.2% early Wednesday.

Streaming giant Roku is building a cup base with a 76.62 buy point. The stock is likely adding a handle, which will show a lower entry at 75.45. Roku stock gained 0.1% early Wednesday.

Learn How To Time The Market With IBD's ETF Market Strategy

Best Stocks To Buy And Watch In Stock Market Rally

These are four best stocks to buy and watch in today's stock market, including a Dow Jones leader.

Company Name Symbol Correct Buy Point Type Of Buy Point ASML (ASML) 683.18 Cup with handle Salesforce (CRM) 200.00 Consolidation Cloudflare (NET) 66.20 Double bottom Roku (ROKU) 76.62 Cup base

Source: IBD Data As Of June 20, 2023

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

Tesla Stock

IBD Leaderboard stock Tesla raced 5.4% higher Tuesday, hitting new 2023 highs. Shares are sharply extended above a double-bottom base's 207.79 buy point. They closed Tuesday 13% off their 52-week high.

TSLA stock looked to add to Tuesday's gains, rising 0.1% Wednesday morning despite the Barclays downgrade from buy to hold, with a price target bump from 220 to 260.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple stock remains just off all-time highs Tuesday, after ending slightly higher. On Friday, shares traded as high as 186.99. The stock continues to hold sharply above a 157.38 buy point. Early Wednesday, AAPL stock was down 0.1%.

Microsoft shares dropped another 1.25% Tuesday, falling sharply for a second-straight session. Last week, the stock hit a record high at 351.47. MSFT stock is in the 20%-25% profit-taking zone from a 276.76 flat-base buy point, so investors take at least some profits. And on Wednesday morning, Microsoft shares were 0.6% lower.

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

Dow Jones Falls 150 Points On Powell Rate Hike Comments; Tesla Stock Downgraded

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