Dow futures fell sharply on Friday morning, along with S&P 500 and Nasdaq futures, as the post-Fed sell-off continued. The Dow is on track to trim its June lows.
The stock market closed lower on Thursday, with resilient growth leaders selling off as Treasury yields rose significantly.
Tesla (TSLA), Centennial collectibles (CELH), Shock Wave Medical (SWAV), Energy Enphase (ENPH) and on semiconductors (ON) are five held stocks that are now under heavy pressure.
These stocks have not collapsed yet. The latest action is likely to end with bullish tremors and tests of key support. But anyone who bought these names in the previous two sessions will incur real losses, with the risk that these obstacles will collapse in the coming days.
CELH and Shockwave Medical stock are on the IBD Leaderboard watch list. Tesla, Celsius, Shockwave, and Enphase Energy stock are all at IBD 50. ENPH and Onsemi stock are at IBD Big Cap 20.
FedEx The (FDX) released its official first-quarter results during Thursday’s session after last week announcing disastrous preliminary numbers and withdrawing guidance amid global economic weakness. On Thursday, FedEx announced higher package rates and announced cost-cutting measures to save $2.2 billion to $2.27 billion in fiscal year 2023. The shipping giant has committed with 2025 EPS and sales targets.
FDX stock rebounded to advance 0.8% to 154.41 Thursday, after hitting a two-year low on the day.
Costco Wholesale (COST) announced earnings late Thursday.
Costco earnings and sales narrowly topped financial views for the fourth quarter. The warehouse giant said there are no plans to increase membership fees at this time, despite some speculation that the announcement could come as soon as Thursday. Most of Costco’s profits come from membership fees.
COST stock fell modestly early Friday. Shares fell 1.2 percent to 487.17 in Thursday’s session, its lowest level in two months.
Dow jones futures contracts today
Dow futures are down 1.1% against fair value. S&P 500 futures were down 1.2% and Nasdaq 100 futures were down 1.2%.
Futures indicate that the Dow will break above its June lows. The S&P 500 and Nasdaq are racing toward those lows, but they’re completely unavailable.
The 10-year Treasury yield jumped 7 basis points to 3.78%, the highest in 12 years. But that is far from the morning highs of 3.82%.
Crude oil futures are down more than 3%. Copper futures are down 4%.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Thursday stock market
The stock market fell sharply on the day, led by technology companies and small businesses, as Treasury yields soared. The Dow Jones turned positive in the afternoon, but faded back into the close.
The Dow Jones Industrial Average was down 0.4% in stock trading Thursday. The S&P 500 lost 0.85%. The Nasdaq Composite Index fell 1.4%. Small-scale Russell 2000 slipped 2.3%.
US crude oil prices rose 0.7% to $83.49 a barrel, off the morning highs. US natural gas prices fell 8.9% to their lowest level in two months.
The 10-year Treasury yield rose 20 basis points to 3.71%, the highest level since February 2011.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) slipped just over 3%. Shares of iShares Expanded Tech-Software Sector ETF (IGV) fell 1.5%. The VanEck Vectors Semiconductor Index (SMH) lost 2.8%.
The SPDR S&P Metals & Mining ETF (XME) was down 0.4%. The SPDR S&P Homebuilders ETF (XHB) was down 2.1%. The Energy Select SPDR ETF (XLE) is down 0.4%. The SPDR Healthcare Sector Choice Fund (XLV) rose 0.5%.
Reflecting speculative stories stocks, the ARK Innovation ETF (ARKK) fell 4.3% and the ARK Genomics ETF (ARKG) fell 2.8%. Tesla stock is a major ownership across Ark Invest ETFs.
Top 5 Chinese stocks to watch right now
Celsius stock fell 8.5% Thursday to 89.90, breaking below the 50-day line for the first time in three months and cutting lows on the recent consolidation. This is after CELH stock fell 3.9% on Wednesday. The energy drink leader is entitled to take a break after the triple from early May to late August. In another two weeks, CELH stock could have a new base, with 118.29 buying points.
Its relative strength line is just below record highs. The danger is that this relative winner turns into an absolute loser.
SWAV stock fell 9.1% to 258.84 Thursday, falling to the 50-day moving average. On Wednesday, shares of the medical products company tumbled 1.85% after bouncing back down from an intraday high of 300.96. Perhaps this is where Shockwave stock can find support and rebound higher.
Enphase stock fell 6.9% to 283.63, falling below the 21-day streak and testing the 10-week streak for the first time since July. On Wednesday, shares were down just 15 cents but after hitting 318.49 on the day. This could be a place for Enphase’s inventory to find a foothold. Enphase’s RS line just dropped after hitting new highs for weeks.
in the store
Semiconductor stock fell nearly 5% to 64.96, breaking below the 50-day line for the first time in two months and easing recent lows. During Wednesday, ON’s stock rose to 71.77, briefly flashing various buy signals before reversing lower for a 0.2% loss.
Tesla stock fell 4.1% to 288.59, below the 200-day line and finding support at the 50-day line. On Wednesday, shares tumbled 2.6%, reversing down from 313.80 on the day. This could be a healthy jolt, assuming TSLA stock can hold around current levels. At Friday’s close, the last short fixation would be a suitable base within a much larger pattern. The buy point will be 314.74, but on the weekly chart it will have a handle with a slightly lower entry at 313.90.
Meanwhile, Tesla It seems There are demand issues in China, in part due to increased production in Shanghai. With the BYD Seal delivered just a few weeks later and the Nio ET5 starting on September 30th, the electric vehicle market in China is keeping a close eye on TSLA stock investors.
Tesla vs. BYD: Which EV giant is the best one to buy?
stock market analysis
The stock market correction continues to deteriorate, with the Dow and other major indexes approaching their June lows, which definitely makes us lose sight of the 50 day moving averages.
Can the stock market bounce? surely.
Treasury yields may need to cool off somewhat for stocks to rebound. It wouldn’t be surprising if revenue would pause or even reverse within a few days or even weeks. But the underlying forces driving Treasury yields higher remain.
The Fed is raising interest rates significantly, and will continue to raise rates and leave them high even as policy makers send stronger signals that the US risks a clear recession in 2023.
This is just a tough environment for stocks. Perhaps if inflation begins to decline rapidly, markets may start to fall back on expectations of rate hikes. But that will be weeks away. Inflation may subside because the economy is weakening further.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
The stock market correction is getting worse. There is a very real risk that the major indicators will break to new lows. Holding stocks such as Shockwave, Celsius, Tesla and Enphase are under increasing pressure.
Investors shouldn’t get too excited when the market opens strongly, an intraday rally, or even a day or two of strong gains. This can be difficult, because some of the stocks mentioned in this article are likely to make big moves when the market rebounds.
However, investors should wait for real signs of market strength through the follow-up day. Even so, there will be good reasons to be careful.
Keep working on watch lists. Focus on relative strength, even if the graphs look damaged.
Eli Lilly (LLY) and other drug makers, along with some biotech companies, are showing some strength.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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