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Dow Jones Futures: Rally in the split market returns as Apple, Nvidia Lead Tech Sell-Off; Janet Yellen relented

Dow Jones futures were stable late Tuesday, along with S&P 500 futures and the Nasdaq. The technical rally on the stock market was mixed on Tuesday, but technology stocks suffered significant losses. Finance Minister Janet Yellen tried to return earlier in comments after closing, when she said interest rates could be made to “rise somewhat”.


The Nasdaq collapsed within the day to its 50-day line, while Russell 2000 closed at just that key level. Stocks of a trillion dollars Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT) and a parent of Google Alphabet (GOOGL) is for sale. And so he did Nvidia (NVDA) and other chip names, ServiceNow (NOW), Adobe (ADBE) and other software plays also crashed Tesla (TSLA) and other EV manufacturers.

Upwards steel stocks and extraction like Steel dynamics (STLD) usually does well. Agricultural, transport, housing, trade groups are usually retained, along with oil groups and finance such as Goldman Sachs (GS).

Dow Jones managed to make a small profit. The S&P 500 fell moderately, but maintained support at its 21-day exponential moving average, even with large capital technologies such as Apple shares, which dragged down the benchmark index.

After all, the stock market seems divided again, with the names of technology and growth looking weak, while the old names of the economy are doing well.

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Yellen warns of higher interest rates

Finance Minister Yelen acknowledged that the Federal Reserve may need to raise interest rates as the government unleashes additional huge costs.

“Interest rates may need to be raised somewhat to ensure that our economy does not overheat,” Jelen told an economic seminar.

After the stock market closed, Yellen tried to return his “somewhat” comment, at least to some extent. She said she did not “predict or recommend” price increases. Yellen added that she was not worried about inflation.

The U.S. government has spent $ 5.3 trillion on Covid-related incentives since March 2020, including a $ 1.9 trillion package adopted shortly after President Biden took office. Thanks to high government spending such as coronavirus vaccinations, the US economy is recovering rapidly, almost overshadowing its peaks before the first quarter pandemic. Job growth is also booming.

But the Biden administration is pushing for another $ 4 trillion. President Biden has proposed funding these two packages by raising taxes on the highest profits, including nearly doubling the capital gains tax rate, as well as raising corporate taxes.

Tax-targeted increases aimed at corporations and capital gains, along with higher interest rates, are likely to be negative winds for the stock market.

Yellen ran the central bank before current Fed chief Jerome Powell. Powell and current politicians have signaled that they want to see even greater economic power before they even talk about restricting asset purchases, with interest rates rising far below. However, Yelen’s comments raise expectations that “intensified talks” could begin at the Fed meeting in June.

On Tuesday, however, the finance ministry’s 10-year income fell moderately.

Adobe, Microsoft, Nvidia, ServiceNow and Google shares are in the IBD rankings. Adobe, ServiceNow and Microsoft shares are long-term leaders in IBD. Goldman’s steel dynamics and stocks are by SwingTrader. Shares of Goldman Sachs and Tesla are at IBD 50.

Shares of Apple, Microsoft and Goldman are in the industry average of Dow Jones.

Dow Jones Futures Today

Dow Jones futures are lower than fair value. The futures of the S&P 500 were almost unchanged. Nasdaq 100 futures lost 0.1%.

Remember that overnight action in Dow futures and elsewhere does not necessarily become real trading in the next regular session of the stock market.

Join IBD experts as they analyze active stocks in the IBD Live stock rally.

Coronavirus news

The incidence of coronavirus worldwide reached 154.92 million. The death of Covid-19 exceeds 3.23 million.

Coronavirus cases in the United States have reached 33.26 million, with more than 592,000 deaths.

Stock market rally

The stock market rally had a mixed session, but you have to be optimistic to see the glass half full on Tuesday.

The Dow Jones industrial average closed at its highest session, slightly above the profitability of stock trading on Tuesday. The S&P 500 index gave up 0.7%. The Nasdaq composite collapsed by 1.9%, although it lost to finish just above its 50-day moving average. The main indices fell out of the open, and the lowest intraday values ​​came after comments on Jelena’s interest rates.

Big Cap Techs Slump

Apple sank 3.5%, finding support in its 50-day market. Shares of Amazon slipped 2.2%, falling below buying points. Shares of Microsoft sank 1.6%, testing a recent buy point. Facebook (FB) and Google shares lost 1.3% and 1.55%, respectively, although their charts look better.

Shares of Adobe fell 2.5%, falling to its 50-day and 200-day lines. NOW the shares have withdrawn by 1.4%, which is a decrease of 14.1% in the last five sessions of profit. ServiceNow is starting to lose sight of its long-term averages.

Shares of Tesla fell 1.65% to 673.60 on Tuesday, back in its 50s after falling 3.5% on Monday. The TSLA stock no longer has a purchase point of 780.89, as the midpoint of the handle is already below the midpoint of the base. Tesla shares are already well below their highs in March.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) withdrew 1.45%, while the ETF (BOUT) sank 1.9%. The IShares Expanded Tech-Software Sector ETF (IGV) collapsed by 2.4%, with Microsoft, Adobe and ServiceNow stockpiling remarkable components. The VanEck Vectors Semiconductor ETF (SMH) fell 1.2%, although it reduced intraday losses. Nvidia shares are a major SMH holding.

The SPDR S&P Metals & Mining ETF (XME) ETF jumped 3%, reaching a new high, while the US Global Infrastructure Development ETF (PAVE) gained 1.5%. US Global Jet ETF (JETS) down 2.2%

Reflecting more speculative historical stocks, the ARK Innovation ETF (ARKK) collapsed by 3.55%, testing its 200-day line for the first time since April 2020. The ARK Genomics ETF (ARKG) slipped 3.1%. Tesla shares are the largest holding company for Cathie Wood’s ARK Investments. But ARK-type stocks generally struggle with Wood, often increasing their stakes as they collapse.

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Market rally analysis

The stock market rally has weakened significantly over the last few sessions. A few weeks later, when the rally on the market showed some strength, it returned to the split rally in March.

Nasdaq found support on its 50-day line well into mid-March. Titans like Apple and Amazon, which until recently had masked the main weakness in the technology sector, were not a refuge on Tuesday. The chip stock, which was the first technology sector to rise, is several weeks behind and looks increasingly damaged. Software such as ServiceNow and Adobe stock, which were just beginning to look promising in late April, fell sharply in a few sessions. Tesla’s warehouse again needs service and it is in better condition than other electric car manufacturers.

This is a far different picture for the Dow Jones and the S&P 500. The Dow managed to make a profit, even with megacaps like Apple’s stock weighing the blue caps. The S&P 500 found support in its 21-day line, even with losses from shares of Apple, Amazon, Nvidia, Tesla and others.

Maintaining the 50-day line will be crucial for the Nasdaq and Russell 2000. But even if they can, growth stocks – many of which have never had a real return – need significant time to recover.

What should we do now

Investors need to reduce their exposure to technology and growth names. Many of them triggered automatic sales or profit signals. If you have long-term big winners in growth names, consider reducing your stakes to key positions.

Housing and play-related goods work to buy opportunities, along with finances, shipping shows and some industrialists. They are benefiting from a thriving economy

Look for the real leaders by buying them at breakthroughs or bullish discounts. Rio Tinto (RIO), The caterpillar (CAT), Deere (OT), FedEx (FDX), Nutrients (NTR), Goldman shares, Granite construction (GVA) and Azek (AZEK) are in the shopping areas or near them.

Rio Tinto and Granite Construction are among David Ryan’s stock list “SIR DOG”, which he highlighted on Tuesday on IBD Live, definitely an episode worth watching again.

But once the market rally splits again, investors need to be careful not to be too exposed. Maybe the old economic names will lead and the technological names will at least become stronger. But there is a danger that Nasdaq and Russell 2000 will pull out the stronger sectors, turning the split in the market rally into a complete adjustment.

Read the Big Picture every day to stay in line with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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