Dow Jones Falls On Cool Inflation Data; Tesla Slides On Recall; Fed Decision, Powell Up Next

The Dow Jones Industrial Average threatened to snap a four-day win streak Wednesday as another inflation report showed a cooling off on prices and investors awaited word on interest rates. Meanwhile, Tesla stock slid after the company recalled over 2 million vehicles over Autopilot safety concerns.




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The Labor Department said its Producer Price Index came in unchanged for month of November, below expectations for a 0.1% rise. The PPI posted a year-over-year increase of 0.9%, just below the 1% estimate. Core producer prices in November were also cooler than expected, unchanged for the month vs. the 0.2% expected rise. And year over year, the core PPI rose 2%, below the 2.2% estimate.

The inflation news comes ahead of the Federal Reserve’s interest rate decision at 2 p.m. ET. Comments from Fed Chair Jerome Powell are scheduled for 2:30 p.m. Wall Street places a 98% probability of the Fed keeping rates unchanged at a target rate of 5.25% to 5.5%, per CME’s FedWatch tool.

Meanwhile, Tesla (TSLA) declined 1.3% Wednesday morning. The company will recall more than 2 million vehicles over concerns its Autopilot system can be misused by drivers, the National Highway Traffic Safety Administration said Tuesday. The announcement follows a two-year investigation by U.S. regulators into crashes involving the driver-assistance technology. Tesla is expected to offer owners a free software update.

Key earnings movers Wednesday include ABM Industries (ABM), Photronics (PLAB) and REV Group (REVG). ABM stock jumped 6% in early trading, while Photronics rallied 4.5%. REV Group shares advanced more than 6% in morning action.

Further, software giant Adobe (ADBE) will report after the close.

Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average dropped 0.1%, while the S&P 500 gained 0.1%. And the tech-heavy Nasdaq composite climbed 0.3% in morning action.

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

The yield on the 10-year U.S. Treasury bond ticked lower to 4.17% Wednesday morning. On Tuesday, the benchmark settled at 4.2%, holding just off its lowest level since early September.

Oil prices bounced modestly after Tuesday’s losses, as West Texas Intermediate futures rose 0.5% Wednesday morning. WTI remained below $69 a barrel, its lowest level since late June.


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Stock Market Rally

With friendly inflation data at their back, the Nasdaq composite and S&P 500 climbed for the third straight day Tuesday. The S&P 500 rose 0.5% to its highest level since January 2022. The Nasdaq added 0.7% and reached its highest since April 2022.

The Dow Jones Industrial Average rose 0.4% Tuesday and is just 221 points from a record high.

Tuesday’s Big Picture column commented, “One reason for the stock market’s heady uptrend since late October is the growing feeling that interest rates aren’t going any higher, and rate cuts may start as early as next spring. The Fed has repeatedly said it won’t consider rate cuts until it sees a sustained drop in inflation.”

Now is an important time to read IBD’s The Big Picture column amid the continuing stock market rally. Be sure to read how to invest during the ongoing stock market uptrend.


Learn How To Time The Stock Market With IBD’s ETF Market Strategy


Stock Market Today: Best Stocks To Buy And Watch

IBD Leaderboard stock Amazon (AMZN), IBD SwingTrader issue Booking (BKNG), Eli Lilly (LLY) and Snowflake (SNOW) — along with Dow Jones stocks Boeing (BA), JPMorgan Chase (JPM) and Visa (V) — are among the best stocks to buy in the current market rally.

Apple and Snowflake are featured in this Stocks Near A Buy Zone column.


Get Real-time Buy And Sell Alerts On Stock Market Leaders With IBD Leaderboard


Dow Jones Stocks To Watch: JPMorgan Breaks Out

Aerospace stock Boeing moved further past a cup base’s 243.10 buy point Tuesday, with a 0.2% rise. The 5% buy zone tops out at 255.26. BA stock added 0.7% Wednesday.

Banking giant JPMorgan is breaking out past a 159.38 buy point in a cup base, rallying 0.9% Tuesday. JPM stock was down 0.4% Wednesday.

Payments leader Visa continues to trade in buy range above a 250.06 buy point in a cup base, according to IBD MarketSmith pattern recognition. V stock was up 0.1% Wednesday.


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Stocks To Buy And Watch: SNOW Breaks Out

IBD Leaderboard stock Amazon continues to trade just at a cup base’s 145.86 entry, with shares closing right above the entry Tuesday amid a 1.1% rise. AMZN stock rose 0.5% Wednesday morning.

IBD SwingTrader stock Booking broke out past a 3,207.32 handle entry, with a 2.8% rally Friday. BKNG stock tacked on 1.7% by Tuesday’s close, ending at the top of the buy zone. BKNG stock was down 0.1% Wednesday.

Drug giant Eli Lilly continues to trace a flat base with an official buy point at 629.97. An early entry would be in play if the stock is able to bounce strongly from its 50-day line. LLY stock gained 0.5% Wednesday morning.

Artificial intelligence leader Snowflake is breaking out past a cup-with-handle’s 192.66 buy point, according to IBD MarketSmith pattern recognition. SNOW stock climbed 0.3% Tuesday, closing just above the buy trigger and extending a win streak to four sessions. SNOW stock added 1.2% early Wednesday.

Best Stocks In Today’s Stock Market Action

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

Company Name Symbol Correct Buy Point Type Of Buy Point
Amazon (AMZN) 145.86 Cup base
JPMorgan (JPM) 159.38 Cup base
Booking (BKNG) 3,207.32 Handle entry
Snowflake (SNOW) 192.66 Cup with handle
Source: IBD Data As Of Dec. 11, 2023

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Magnificent Seven Stocks: Nvidia, Tesla

Among the so-called “Magnificent Seven” stocks, Tesla moved down 1.3% early Wednesday, while Nvidia (NVDA) gained 1.4%.

Graphics-chip giant Nvidia rallied 2.2% Tuesday, erasing Monday’s losses, as the stock continues to battle for support at its 50-day line, just below a 476.09 double-bottom entry.

Tesla stock skidded 1.1% Tuesday, extending Monday’s losses. TSLA is testing its 50-day line, a key support level to watch. The stock’s big double-bottom pattern has a 278.98 buy point, while an early entry is in play at 252.75.

Dow Jones Leaders: Apple, Microsoft

Two Dow Jones stocks in the Magnificent Seven, Apple (AAPL) and Microsoft (MSFT), traded higher ahead of today’s stock market open.

Apple stock moved up 0.8% Tuesday, mostly erasing Monday’s losses. Shares sit just above a cup-with-handle entry at 192.93. Apple shares rose 0.8% Wednesday.

Microsoft stock gained 0.8% Tuesday, about 2% above a cup base’s 366.78 buy point and in buy range. And the software giant was up 0.3% Wednesday morning.

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

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Source: investors.com

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