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Investors Business Daily
Investors Business Daily

Dow Jones Rallies 500 Points Ahead Of Key Inflation Data; Fed Meeting Set To Start; Tesla Stock Nears 2022 Low

Dow Jones futures were higher ahead of Tuesday's open after the Dow Jones Industrial Average rallied 528 points Monday. Tesla stock skidded more than 6% Monday, finishing just off its 2022 lows.

Inflation Data, Fed Meeting

Consumer inflation data is due out Tuesday morning. The CPI is expected to rise 0.3% for the month of November and 7.3% year over year, per Econoday estimates. In addition, the next Federal Reserve policy meeting takes place on Tuesday and Wednesday.

While the Fed has already forecast a 50-basis-point hike, investors will be looking for further guidance on the Fed's plans. A pivot from aggressive tightening looks unlikely, but some respite from punishing rate hikes would be welcome. According to the CME's FedWatch tool, traders place a 74% chance of a 50-basis-point rate hike.

The 10-year Treasury yield ticked higher to 3.61% Monday.

Late Monday, Oracle jumped 3% after the company's earnings and sales numbers topped analyst estimates. More earnings reports this week include Darden Restaurants and Lennar.

Stock Market Today

On Monday, the Dow Jones Industrial Average rose 1.6%, or 528 points, and the S&P 500 climbed 1.4%. The tech-heavy Nasdaq composite followed up with a 1.3% rise. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust moved up 1.3% and the SPDR S&P 500 rose 1.4%.

Electric-vehicle giant Tesla traded down 6.3% Monday. Among Dow Jones stocks, Apple rallied 1.6% and Microsoft gained 2.9% in today's stock market.

Allegro MicroSystems, IBD Leaderboard stock Dexcom, KLA and Trane Technologies — as well as Dow Jones names Caterpillar, Home Depot and UnitedHealth Group — are among the top stocks to buy and watch.

Dexcom and Trane are IBD Leaderboard stocks. UnitedHealth was featured in this week's Stocks Near A Buy Zone column. Allegro was a recent IBD 50 Stocks To Watch pick. Caterpillar and Dexcom were recent IBD Stock Of The Day companies.

4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally

Dow Jones Futures Today: Oil Prices

Ahead of Tuesday's opening bell, Dow Jones futures rose 0.6% vs. fair value, while S&P 500 futures moved up 0.5%. The tech-heavy Nasdaq 100 futures gained 0.5% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

U.S. oil prices rallied more than 3% Monday, rebounding from their year lows. West Texas Intermediate futures traded just above $73a barrel.

IBD's latest newsletter, MarketDiem, gives you actionable ideas for stocks, options and crypto right in your inbox.

What To Do In The Stock Market Rally

Now is an important time to read IBD's The Big Picture column with the stock market trend back in a "confirmed uptrend."

Even though the Nasdaq and S&P 500 indexes remain in uptrends, defense is still better than offense at this point due to the ongoing market volatility. That means it's OK to look for stocks to buy, but keep positions small to start, while keeping your overall exposure light.

When it comes to new buys, what kind of feedback are you getting from the market? Are your latest buys making solid progress? In that case, it's OK to give them some room. But don't be afraid to take partial profits if a gain hits at least 10%. If new buys go the wrong way, or are met with immediate selling, cut losses when the stock is down 3% to 4%, instead of waiting for the 7% -8% rule to trigger.

(Check out IBD Stock Lists like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.)

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Caterpillar, Home Depot, UnitedHealth

Dow Jones member Caterpillar is moving closer to a cup base's 238 buy point, according to IBD MarketSmith pattern recognition, in the wake of Monday's 2.5% gain. CAT stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.

Home improvement retailer Home Depot ended Monday less than 1% below a cup-with-handle base's 329.77 buy point following the session's 2.3% advance.

Health care giant UnitedHealth Group is tracing a flat base with a 558.20 buy point. Shares are just 2% away from the latest entry Monday.

Top Stocks To Buy And Watch: Allegro, Dexcom, KLA, Trane

Allegro MicroSystems ended Monday in buy range past a cup with handle's 32.07 buy point following the day's slight rise. ALGM stock traded up 0.1% Monday. And the 5% chase zone goes up to 33.67.

IBD Leaderboard stock Dexcom tried to break out past a 123.46 buy point in a flat base, but is about 5% below the entry after recent losses. Dexcom stock was up 0.3% Monday.

Chip leader KLA is moving further above a cup with handle's 392.60 entry after Monday's 1.9% advance. Bullishly, the relative strength line continues to make new highs in the ongoing market volatility.

Trane Technologies ended Monday about 4% below a 181.72 buy point in a cup with handle after the session's slight fall.

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

Tesla Stock

Tesla stock skidded 6.3% Monday, giving up the entirety of Friday's gains and heading back toward its recent lows.

In recent weeks, TSLA stock hit its lowest level since Nov. 23, 2020, reaching a new 52-week low price at 166.19. Shares closed Monday at 167.82, about 58% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rallied 1.6% Monday but are still below their 50-day line after last week's losses. The stock is more than 20% off its 52-week high.

Microsoft jumped 2.9% Monday, as shares continue to hold above the 50-day line. The software giant remains about 27% off its 52-week high.

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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