Dow Jones Futures Rally After Key Inflation Report; First Republic surges 60% to ease bank fears

Dow Jones futures rose more than 300 points on Tuesday morning after a key inflation report, as recovering financials boosted early trade. The battle for regional banking First Republic ( FRC ) surged 60% in premarket shares as federal moves to quell banking fears appeared to be effective after Monday’s plunge.


The SPDR S&P Regional Banking ETF ( KRE ) jumped more than 6%, rebounding from Monday’s 12% plunge. KeyCorp (KEY) rose nearly 15%, while Western Alliance (WAL) jumped 34%. Finally, Charles Schwab (SCHW) rose 12% in early morning trading.

CPI Inflation Report

Wall Street suddenly sees a solid chance the Federal Reserve will pause its rate hike campaign at next week’s meeting as the failure of three banks raises concerns about broader financial sector stress.

That could reduce the recent significance of CPI, which rose 0.4% in February, matching expectations. Core CPI rose 0.5% in February, higher than the 0.4% estimate. The headline CPI inflation rate hit 6.0% in line with estimates, with the core inflation rate also meeting estimates of 5.5%.

But almost regardless of the CPI outcome, half-point moves now appear to be off the table. And it’s just a week after Fed Chairman Jerome Powell signaled that policymakers were ready to accelerate rate hikes at next week’s meeting from February’s quarterly pace.

Bank crashes boosted bonds and other safe havens, sparking a sharp plunge in Treasuries and signaling growing doubts about the strength of the economy. Even if the Fed doesn’t pause next week, markets now appear to be betting that interest rate cuts are just around the corner.

On the earnings front, GitLab (GTLB) tumbled 30% in premarket trade after the company’s weaker-than-expected revenue guidance.

Earnings continue to trickle out at the end of the season this week. Among them are Academy sports and outdoors (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX), Five below (FIVE) and Lennar (LEN).

Stock market today

United Airlines ( UAL ) fell 4.7% after the company said it expects to see a quarterly loss in the first quarter.

Leader of electric cars Tesla ( TSLA ) rose 1% Tuesday morning after positive registration data from China. Meanwhile, the Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) was higher before the stock market opened.

Social media giant Meta platforms (META), the IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (OF) and Sales force (CRM) — is among the best stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard Watch List stock. New Relic was recently an IBD Stock Of The Day. And Nike featured in this week’s column Stocks near a buy zone.

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Dow Jones today: Oil prices, Treasury yields

Before the market opened Tuesday, Dow Jones futures were up 1% and S&P 500 futures were up 1.2%. Tech-heavy Nasdaq 100 futures rose 1.1% in morning action.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) was up 1.1% and the SPDR S&P 500 ETF ( SPY ) was up 1.2% early Tuesday.

The 10-year US Treasury yield dipped to 3.51% on Monday as safe-haven trading pushed bonds up sharply following the SVB collapse. On Tuesday, the 10-year government yield rose to 3.57% in morning trading.

Oil prices continued to fall early Tuesday after Monday’s sharp losses. West Texas Intermediate futures fell 2% to trade just above $73 a barrel. barrel.

Stock market correction

On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq Composite rose 0.45% in a day of volatile trading.

Monday’s Big Picture column commented: “The S&P 500 slipped more than 1% in early trade, but rebounded to close less than 0.2% lower. The index found support around 3800, with buyers also emerging during December’s market swoon .”

Now is an important time to read IBD’s The Big Picture column amid the recent stock market correction.

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to watch: Nike, Salesforce

Since the Oct. 3 bottom, Nike shares are up as much as 59% to their most recent high of 131.31. Now, the stock is consolidating within a flat base that offers a buy point at 131.41, according to IBD MarketSmith pattern recognition. NKE shares were up 0.1% early Tuesday.

Amid the recent weakness, the stock is below its 50-day moving average, an important benchmark. A decisive repeat would be bullish for the base-building outlook as it carves out the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

In recent weeks, Dow Jones leader Salesforce showed major upside strength after strong fourth-quarter results. But those gains have mostly disappeared amid recent market weakness, and now the stock is back below a 178.94 cup-with-handle entry. Still, the stock’s recent strength is a reason to monitor the software leader in the coming sessions. CRM stock rose 0.7% on Tuesday.

3 best growth stocks to watch Stock market correction

Top stocks to watch: Meta, Palo Alto, New Relic

Facebook parent Meta Platforms is quietly building a flat base with a buy point at 197.26 after an earnings-driven price rally in February. Shares are about 8% away from a recent buy point, as they rose 0.8% on Monday. Meta shares rose 0.9% on Tuesday morning.

Back story: Like social media rivals, Meta is struggling due to a sharp reduction in ad revenue as clients reel over macroeconomic concerns, recession fears and higher interest rates. This comes as it spends billions on a risky bet to build the “metaverse,” a virtual reality world that has yet to catch on.

IBD Leaderboard Watchlist stock Palo Alto Networks continues to trade quietly in a handle following the stock’s 12.5% ​​gain on Feb. 22. Shares remain within striking distance of a base’s 192.94 buy point. Bullishly, the share’s relative strength line is at new heights, as the share significantly outperforms the market averages. PANW shares rose 0.5% on Tuesday.

Back story: On Feb. 21, the cybersecurity giant announced strong results for the quarter that ended in January, with earnings hitting $1.05 per share. stock, up 81% from a year earlier, with a 26% jump in revenue to $1.7 billion.

The latest IBD stock of the day, New Relic, is working on a flat base with an 80.98 buy point in the wake of the February 8 earnings-driven rally. The RS line lasts until now. NEWR stock fell early Tuesday.

Back story: New Relic provides a cloud-based suite of software products that enable organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.

Learn how to time the market with IBD’s ETF Market Strategy

Stocks to watch in stock market correction

These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.

company name Symbol Correct point of purchase Type of point of purchase
New relic (NEW) 80.98 Flat bottom
Nike (of) 131.41 Cup with handle
Palo Alto Networks (PANW) 192.94 Cup with handle
Sales force (CRM) 178.94 Cup with handle
Source: IBD data per March 13, 2023

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla stock

Tesla shares rose 0.6% on Monday as it continues to see some support around its 50-day moving average. Shares closed Monday about 55% off their 52-week high.

TSLA stock rose 1% on Tuesday morning, looking to add to Monday’s gains.

On Tuesday, weekly Chinese EV insurance registration data could be a key measure of Tesla demand in the world’s biggest electric market, which is in the middle of a huge price war started by Tesla.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares rose 1.3% on Monday, snapping a two-day losing streak and finding support at the long-term 200-day line. AAPL rose 0.8% Tuesday morning.

Microsoft shares bullishly regained its 200-day line during Monday’s 2.1% jump. The stock is still about 20% off its 52-week high after recent declines. MSFT stock was up 1% early Tuesday.

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


Top growth stocks to buy and watch

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