Dow Jones futures dropped 175 points Monday morning heading into the final day of October. Investors are braced for a big week highlighted by the two-day Federal Reserve meeting and wrapping up with the Labor Department’s jobs report Friday.
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The Fed’s two-day meeting kicks off Tuesday, with an interest rate decision Wednesday afternoon. Investors sentiment shows an 81% probability of a 75 basis point hike, according to the CME.
The Fed says it won’t pivot — meaning slow its pace of rate increases —until the superheated labor market shows clear signs of slowing. But once the job market begins to roll over, Fed strategy and a broad array of economy factors are likely to change. This places Friday’s jobs report under increased scrutiny.
Key earnings reporters Monday were Global Payments (GPN) and Onsemi (ON). Global Payments declined more than 4% on mixed results, while ON stock traded down more than 2%.
Other big earnings reports this week include Advanced Micro Devices (AMD), Arista Networks (ANET), Eli Lilly (LLY), NXP Semiconductor (NXPI) and Pfizer (PFE).
Electric-vehicle giant Tesla (TSLA) traded down around 0.5% Monday morning, while Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were also lower ahead of today’s stock market open.
Cardinal Health (CAH), Eli Lilly (LLY), Pure Storage (PSTG) and Texas Roadhouse (TXRH) — as well as Dow Jones stocks Merck (MRK) and UnitedHealth Group (UNH) — are among the top stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to put their watchlists into action, but be mindful of the ongoing market volatility.
Cardinal and Texas Roadhouse are IBD Leaderboard stocks. Pure Storage was a recent IBD Stock Of The Day. UnitedHealth was featured in last week’s Stocks Near A Buy Zone column, along with three other top stock ideas.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Monday’s opening bell, the Dow Jones futures fell 0.4%, while S&P 500 futures moved down 0.5% vs. fair value. Nasdaq 100 futures lost 0.6% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 0.4%, and the SPDR S&P 500 ETF (SPY) fell 0.5%.
The 10-year Treasury yield ticked higher to 4.04% Monday morning, looking to rebound from last week’s losses that saw the 10-year Treasury yield snap a 12-week win streak.
Meanwhile, U.S. oil prices declined nearly 2% Monday, after a weekly rebound last week. West Texas Intermediate futures held just above their 50-day moving average, just above $86 a barrel.
Stock Market Rally Continues
On Friday, the Dow Jones Industrial Average rallied 2.6%, while the S&P 500 jumped 2.5%. The tech-heavy Nasdaq composite advanced 2.9%.
Friday’s The Big Picture commented, “The stock market made a show of strength by surging despite disappointing Big Tech earnings reports. But it is still too early for investors to be getting excited, with another Federal Reserve meeting rapidly approaching.”
Now is an important time to read IBD’s The Big Picture column. Following recent gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the new uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Merck, UnitedHealth
Merck is extended beyond a double bottom’s 93.12 buy point following a six-day win streak. The 5% buy area went up to 97.78. Merck shares traded a fraction lower Monday.
Health care giant UnitedHealth is just below a cup-with-handle’s 553.23 buy point, according to IBD MarketSmith pattern recognition. Shares climbed 1.7% Friday, moving with points of the stock’s latest entry.
UNH stock was up a fraction Monday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Buy And Watch: Cardinal, Eli Lilly, Pure Storage, Texas Roadhouse
IBD Leaderboard stock Cardinal Health continues to tack on gains following a recent breakout move past a short cup-with-handle’s 71.22 entry, according to IBD MarketSmith chart analysis. Shares are also above a flat base’s 72.38 buy point. Earnings are slated for Friday. CAH stock traded flat early Monday.
IBD SwingTrader stock Eli Lilly closed further past its buy range above a flat base’s 335.43 buy point, climbing 1% Friday. Shares were unchanged Monday morning, ahead of Tuesday’s earnings report.
Friday’s IBD Stock Of The Day Pure Storage is approaching a 31.62 buy point following two straight days of gains. The stock was up about 2% early Monday.
Texas Roadhouse remains in buy range above a flat base’s 95.52 buy point during Friday’s volatile earnings-fueled session. The chase zone goes up to 100.30. TXRH stock lost almost 1% after Deutsche Bank downgraded it from buy to hold.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rallied 1.5% Friday, rising for a fourth straight session and continuing to rebound after hitting a 52-week low last week. Despite its recent gains, the stock closed about 45% off its 52-week high.
Shares of the EV giant moved down around 0.3% Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares surged 7.6% Friday, decisively retaking the key 50-day line. Now, shares are trying to move above their long-term 200-day line for the first time since Sept. 13. Apple stock fell 0.6% Monday.
Microsoft jumped 4% Friday, ending a two-day slide. The software giant is about 33% off its 52-week high. Microsoft shares fell 0.6% Monday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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