The Dow Jones Industrial Average tumbled more than 500 points Tuesday, as Wall Street reacted to a hotter-than-expected inflation report that could telegraph future interest rates. Heavy sellers included Arm Holdings and two fellow artificial intelligence stocks that reported earnings on the stock market today: Arista Networks and Cadence Design Systems.
After the opening bell, the Dow Jones Industrial Average fell 1.4%, while the S&P 500 was down 1.45%. The tech-heavy Nasdaq composite declined 1.8% in morning action.
Among U.S. exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 2%, while the SPDR S&P 500 ETF lost 1.3%.
The 10-year Treasury yield jumped to 4.28%. Further, oil prices extended their recent gains, as West Texas Intermediate futures rose 0.3%. WTI futures traded above $77 a barrel.
Stock Market Today: CPI Inflation Data, Earnings
The Labor Department's January consumer price index rose 0.3% on the month, with an annual increase of 3.1%. Both were hotter than expected. The CPI was expected to rise 0.2% on the month, with an annual increase of 3%. Further, the core CPI inflation rate climbed 0.4% in January, with a 3.9% annual increase. Wall Street anticipated a monthly rise of 0.3% in January, with a 3.7% annual increase.
On the earnings front, key movers included Arista Networks, Cadence Design Systems, Coca-Cola, Datadog and Shopify.
Arista shares dived 8% even though the provider of cloud networking solutions topped earnings and sales estimates. Cadence stock tumbled around 6% in early trade. The stock remains above a 279.33 flat-base entry.
Coke shares climbed modestly in morning action, while Datadog plunged more than 6%. And Shopify dived more than 13% in early trades.
Elsewhere, Arm stock plunged 13%, giving up part of Monday's 29% surge.
Dow Jones Rises
On Monday, the Dow Jones Industrial Average moved up 0.3% and the S&P 500 slipped 0.1%. The tech-heavy Nasdaq composite dropped 0.3%.
Monday's Big Picture column commented, "But last week saw a torrent of breakouts — nearly three dozen, according to the Recent Breakouts list in IBD MarketSmith. That means bulls got more ammunition to reload and take shots at new opportunities. Last week's wave of breakouts didn't have any Microsofts, Amazons or other heavyweights. But the overall quality of the breakouts was still good. The average Composite Rating was 94.4 and the average EPS Rating 86.5. Most have A or B SMR Ratings."
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 adjust to changing market conditions, with IBD's new exposure levels.
Learn How To Time The Stock Market With IBD's ETF Market Strategy
Best Stocks To Buy And Watch In Stock Market Today
Lennar, MongoDB, Samsara and UiPath — plus Dow Jones members Procter & Gamble and Walmart — are among the best stocks to buy and watch in the current market rally.
Samsara and UiPath were 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: P&G At Buy Point
Consumer products giant Procter & Gamble declined 0.3% Monday, falling further below a 158.38 buy point in a cup base, according to IBD MarketSmith pattern recognition. Procter shares were up 0.9% Tuesday.
Discount retail leader Walmart is in buy range past a 163.57 entry in a cup with handle, even as the stock rose 0.6% Monday. The stock gained 0.1% early Tuesday.
4 Top Growth Stocks To Watch In The Stock Market Rally
Lennar Breaks Out
Homebuilder Lennar is breaking out past a flat base's 156.01 buy point, with a 3.2% rally Monday. Lennar shares were down nearly 4% early Tuesday.
Software leader MongoDB is out of buy range past a 442.84 buy point, despite a 2.6% drop Monday, according to IBD MarketSmith. MongoDB shares plunged 5.5% Tuesday.
Samsara rebounded bullishly from its 50-day line last week. But shares reversed lower Monday, falling 2.8%. The stock is near an official entry at 36.91 after giving up an early buy trigger at 35.18 during Monday's reversal. Samsara shares lost nearly 7% Tuesday morning.
UiPath rallied 2% Monday, breaking out past a 26.53 cup-base entry. Shares closed in buy range. UiPath shares declined 8% early Tuesday.
Best Bets On Stock Market Today
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 |
|---|---|---|---|
| Novo Nordisk | 105.69 | Flat base | |
| Merck | 119.65 | Cup base | |
| DraftKings | 39.35 | Cup base | |
| Spotify | 202.88 | Flat base |
Source: IBD Data As Of Feb. 12, 2024
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Magnificent Seven Stocks: Nvidia, Tesla
Magnificent Seven stocks Nvidia fell 0.7% and Tesla dropped more than 1% in morning action Tuesday.
Nvidia shares hit fresh record highs Monday and closed more than 40% past a 505.48 buy point in a flat base after a Jan. 8 breakout move.
Tesla snapped a four-day win streak Monday but is still rebounding from its lowest level since May 2023.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks in the Magnificent Seven, Apple and Microsoft traded lower after Tuesday's stock market open.
Apple is forming a new double-bottom base with a new buy point at 196.38. But Apple stock must first retake the key 50-day moving average, a potential resistance level. Shares fell 1.1% Tuesday.
Microsoft shares remain out of buy range past a 384.30 buy point in a flat base. The software giant dropped 1.8% Tuesday morning.
Be sure to follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on growth stocks, the Dow Jones Industrial Average and the stock market today.
