Dow Jones futures were little changed late on Tuesday, along with S&P 500 futures and Nasdaq futures, technically mixed up on Tuesday. But tech stocks suffered significant losses, Finance Minister Janet Yellen after the closing tried to walk back earlier comments when she said interest rates may have to rise “somewhat”.
The Nasdaq tumbled during the day to the 50-day line, while the Russell 2000 closed at that critical level. Trillion dollar shares An apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT) and Google’s Parents Letters (GOOGL) also closed sales Nvidia (NVDA) and other chip names service (Now) Adobe (ADBE) and other software playback fell as well. Tesla (TSLA) and other EV manufacturers.
In steel and mining stocks such as Iron dynamics (STLD) generally done well. Agriculture, transport, housing, retail groups are generally held together with oil and finance groups such as Goldman Sachs (GS).
The Dow Jones was marginally profitable.The S&P 500 fell slightly, but was supported at a 21-day exponential moving average despite big tech like Apple stocks dragging the benchmark index down.
Bottom line, the stock market rally looks split again with weak tech and growth names, while old economy names are doing well.
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Yellen warned of rising interest rates.
Treasury Secretary Yellen acknowledged that the Federal Reserve may have to raise interest rates as the government releases massive additional spending.
“It is likely that interest rates will have to rise somewhat to make sure our economy doesn’t overheat,” Yellen said at an economic seminar.
After the stock market closed, Yellen attempted to at least somewhat reply to her opinion. She said she “did not anticipate or recommend” rate hikes. Yellen added that she was not concerned about inflation.
The U.S. government has spent $ 5.3 trillion on COVID-related stimulus since March 2020, including a $ 1.9 trillion package that passed shortly after President Biden took office. Due to heavy government spending on coronavirus vaccination, the US economy has recovered rapidly, almost overshadowed before the outbreak in the first quarter. Job growth is booming too
But the Biden’s administration is pushing for another $ 4 trillion in spending.President Biden has offered both packages of funding with a tax hike on top of the income, which includes nearly doubling the capital gains tax rate. And corporate tax increases
Tax hikes targeting companies and capital gains, along with higher interest rates, are likely to be a negative factor for the stock market.
Yellen ran the central bank before current Fed head Jerome Powell. Powell and current policymakers have signaled they want to see more economic strength before discussing control over asset purchases with far-reaching interest rate hikes. But Yellen’s comments raised expectations that a “taper talk” could begin at a Fed meeting in June.
On Tuesday, however, the yield on the 10-year bond fell slightly.
Adobe, Microsoft, Nvidia, ServiceNow and Google stock are in the IBD Leaderboard. Adobe, ServiceNow and Microsoft stock are IBD Long-Term Leaders.Steel Dynamics and Goldman stocks are in SwingTrader, Goldman Sachs and Tesla stocks are IBD 50.
Apple, Microsoft and Goldman stocks are within the Dow Jones Industrial Average.
Dow Jones Futures today
The Dow Jones futures plunged against fair value.The S&P 500 futures were estimated unchanged. The Nasdaq 100 futures were down 0.1 percent.
Keep in mind that overnight execution on the Dow futures and elsewhere does not necessarily translate into actual trading during the next normal stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
News about the coronavirus
Worldwide as high as 154.89 million coronavirus cases, 3.23 million deaths from COVID-19.
Coronavirus infection in the US has soared to 33.26 million, with more than 592,000 deaths.
Stock market rally
The stock market rally has a wide range of times. But you have to be an optimist to see half-full glass on Tuesday.
The Dow Jones Industrial Average closed at session highs, well above the break-even point in Tuesday’s stock market trading.The S&P 500 rose 0.7% .The Nasdaq composite fell 1.9%, albeit slightly lower to finish above the 50 moving average. The day was small.The major index fell from the opening, with an intraday low following Yellen’s interest rate comment.
Big Cap Techs slump
Apple fell 3.5%, found support over 50 days, Amazon shares plunged 2.2%, dropping below a point of purchase. Microsoft shares were down 1.6 percent, testing their latest buy point. Facebook (FB) and Google’s stock are down 1.3% and 1.55% respectively, although the charts look better.
Adobe’s shares were down 2.5 percent, falling into the 50-day and 200-day lines.The stock is now down 1.4 percent, down 14.1 percent over the last five sessions since its earnings ServiceNow began to see a long-term average.
Tesla shares fell 1.65 percent to 673.60 on Tuesday, a 50-day return after a 3.5 percent slump on Monday.TSLA shares no longer had a buy point of 780.89 as the handle’s midpoint was below the midpoint of the base. Tesla shares are now significantly below their March highs.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 1.45%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 1.9%. Notably, Microsoft, Adobe and ServiceNow VanEck Vectors Semiconductor ETF (SMH) were down 1.2 percent, albeit lowering their intraday losses.Nvidia shares hold the big SMH.
The SPDR S&P Metals & Mining ETF (XME) jumped 3%, hitting a new high, while the Global X US Infrastructure Development ETF (PAVE) rose 1.5% .The US Global Jets ETF (JETS) slipped 2.2%.
The ARK Innovation ETF (ARKK) reflects more speculative stocks, tumbling 3.55%, testing the 200-day line for the first time since April 2020.The ARK Genomics ETF (ARKG) slipped 3.1%. Cathie Wood’s ARK Investments, but ARK stocks often run into problems, and Wood generally stepped up their stakes as they tumbled.
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Market Rally Analysis
Stock market correction has been very weak over the past few sessions. After a few weeks of market rally showing broad strength, it returned to March’s two-sided rally.
The Nasdaq found support at the 50-day line and below mid-March highs.Titans such as Apple and Amazon, concealing weaknesses in the tech sector until recently, were nowhere to be found on Tuesday. Chip stocks, the first technology sector to recover a few weeks late and look increasingly corrupt.Software such as ServiceNow and Adobe stock, which started trending in late April, have plunged dramatically over several sessions Tesla’s stock needs. Again repair shop and in better condition than other EV manufacturers.
It’s a very different picture for the Dow Jones and the S&P 500.The Dow is profitable despite mega-caps like Apple’s stock weighing on the blue cap.The S&P 500 found support on the line 21 days despite losses from Apple, Amazon. , Nvidia, Tesla and more
Holding the 50-day line would be extremely important for the Nasdaq and Russell 2000, but even they could. But growth stocks, many of which have never truly made a comeback – need significant time to recover.
What to do now
Investors should cut technology anonymity and growth. Many people stumble upon automated selling signals or declining profits. If you have a big long-term winner in the growth title, consider lowering your stake to the primary position.
For housing and commodity-related drama buying opportunities, work alongside finance, shipping and certain industries. These have benefited from a booming economy.
Look for real leaders, buy them with a good breakout or a good pullback. Rio Tinto (RIO), Caterpillars (cat), Deer (from), FedEx (FDX), Nutrient (NTR), Goldman stock, Granite construction (GVA) and Asek (AZEK) is in or near the purchase zone.
Rio Tinto and Granite Construction were among David Ryan’s “SIR DOG” shows that he featured in IBD Live Tuesday, an episode worth watching once again.
But when the market breaks again, investors should be careful about over-exposure. Perhaps the old economy names will lead, and at least tech names will land. But there is a danger that the Nasdaq and Russell 2000 will pull off a stronger sector, breaking the market rally into a full correction.
Read the big picture every day to stay in line with the market direction and the leading stocks and sectors.
Please follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more.
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