Dow Jones futures fell more than 500 points in Tuesday’s hot inflation reading as figures show a key inflation metric rose rather than making an expected drop last month.
Released early Tuesday, the Labor Department’s Consumer Price Index, or CPI, showed consumer prices rose 0.1% in August from the previous month. That came out hotter than estimates for a 0.1% monthly drop. Inflation rose 8.3% in August from a year earlier, higher than the expected increase of 8.1%.
Meanwhile, electric vehicle leader Tesla (TSLA) lost about 3% on Tuesday. Between dow jones industrialstech titans Apple (AAPL) Y Microsoft (MSFT) were both markedly lower ahead of stock market today open.
In the current market volatility, Arista Networks (sides), double check (YOU), Palo Alto Networks (PANW) Y pure storage (PSTG), as well as Dow Jones stocks Chevron (CLC), are among the top stocks to buy and watch. Note that increased market volatility is a good reason for investors to be more defensive, although recent gains are constructive.
DoubleVerify is a IBD classification table Values. PureStorage is a IBD SwingTrader shares, while Chevron and Palo Alto were appears in the Stock column near a buy zone this week.
Dow Jones Today: Treasury Yields, Oil Prices
Amid the unexpected inflation news, Dow Jones futures sold 1.8% below fair value before the opening bell on Tuesday, while S&P 500 futures fell 2.3%. Nasdaq 100 futures traded down 2.9% in morning action. Remember that night activity in Dow Jones Futures and elsewhere does not necessarily translate to actual trading in the next regular stock Exchange session.
The 10-year Treasury yield rose to 3.42% after better-than-expected inflation data. On Monday, the 10-year Treasury yield hit its highest closing level since June 15.
US oil prices continued to rally, rising 1.4% on Tuesday morning. West Texas Intermediate futures traded back at $89 a barrel.
The producer price index, which measures wholesale inflation, is due out on Wednesday.
Stock market rally under pressure
On Monday, the Nasdaq Composite was up nearly 1.3%, adding some space above its 50-day moving average. On Friday, the index closed just above the line.
Before the inflation report, Monday’s The Big Picture column commented: “A surprise inflation report could rock financial markets. With such a critical report in the offing, investors would have done well to trade cautiously before the numbers are released. Money.”
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Dow Jones Stocks to Watch: Chevron
Dow Jones shares Chevron rose 1.6% on Monday and continued to recover from support at the key 50-day line. The stock is nearing its last buy point at 166.93, according to IBD MarketSmith chart analysis, amid strong performance by energy stocks so far this year. The stock fell 1% early Tuesday.
CLC Actions shows a strong 97 from a perfect 99 IBD Composite Classification, for him IBD stock check. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Top Stocks to Watch: Arista, DoubleVerify, Palo Alto Networks, Pure Storage
Arista Networks has added an identifier to a double bottom base, placing the correct entry at 132.97, according to IBD MarketSmith chart analysis. Arista’s relative strength line is near the highs as the stock has retraced its 200 and 21 day lines. ANET shares fell 1% early Tuesday.
IBD classification table DoubleVerify is breaking past a buy point of 28.07 on a bottoming basis. Stocks are in the 5% buy zone rising to 29.47, although it is extending from the moving averages. Shares of DV were down on Tuesday morning. The company specializes in platforms to help advertisers gain better insight into the effectiveness of their campaigns and ad spend.
Cybersecurity leader Palo Alto Networks is approaching a purchase point of 578.89 on a mug with a handle. Also at stake is an early entry around 560 due to a trend line, per IBD leaderboard commentary. Shares fell 1.8% on Tuesday.
IBD SwingTrader Stock Pure Storage is approaching a buy point of 31.62 in a mug with a handle. Meanwhile, an early entry is also on the cards after the stock moved above a downtrend line within that handle. Shares were down 1% on Tuesday.
tesla shares rallied 1.6% on Monday, extending a winning streak to five sessions and continuing its recovery from the 50-day line. Shares of the electric vehicle giant fell about 3% on Tuesday morning.
Tesla shares have found resistance at their 200-day line in recent months, but are now back above that level. Shares remain around 28% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among dow jones stocksApple shares rose 3.85% on Monday, sharply recovering from their 200-day line. The stock is within 9% of the buying point at 176.25 for a mug with a handle. Apple shares fell more than 2% on Tuesday.
Microsoft rose 0.8% on Monday, rising for the fourth day in a row. The software giant remains well below its 50 and 200 day lines. Shares are 24% below their 52-week high. Microsoft shares lost 2.5% on Tuesday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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