Fed Chairman Jerome Powell is expected to speak before the House Financial Services Committee on Wednesday at 10 a.m. ET, followed by the Senate Banking Committee on Thursday. The Fed said last week that interest rates will remain steady but hinted at two rate hikes later this year. Powell’s testimony will be eagerly monitored by investors looking for clues about the Fed’s future monetary policy decisions.
In the following weeks and months, Powell’s views will most likely be impacted by economic statistics, notably inflation reports.
Dow Jones Futures and Earnings Report Influence
Dow Jones futures, S&P 500 futures, and Nasdaq futures all indicated a little higher bias early Wednesday. FedEx’s earnings report, which was released after the market closed, was anxiously anticipated by investors. The shipping company posted earnings that were somewhat higher than expected but fell short on revenue. FedEx also announced earnings-per-share guidance for 2024 that fell short of analysts’ expectations. As a result, FedEx stock fell 3% in after-hours trade. United Parcel Service (UPS) also had a 1% drop overnight. These developments altered futures market sentiment.
Market Breadth and Purchasing Possibilities
On Tuesday, market breadth was low, although there were some hints of improvement. Several stocks offered purchasing possibilities. Meritage Homes (MTH) regained a purchase point, while Allegro MicroSystems (ALGM) and Lantheus Holdings (LNTH) revealed early entry positions. ATI (ATI) was approaching a probable entry point, while ELF Beauty (ELF) displayed a tight entry. It’s crucial to remember that investing in equities during a market downturn includes increased risk.
Market Analysis and Reaction
The stock market rise began with losses but recovered as the trading session progressed. The Dow Jones Industrial Average sank by 0.7%, the S&P 500 fell by 0.5%, and the Nasdaq composite fell by less than 0.2%. The Russell 2000 small-cap index fell 0.5%. While the market did experience a slight decline, it was a healthy and predicted reversal. Tesla, Nvidia, Apple, Meta Platforms, Amazon.com, and Netflix were among the megacap growth stocks that demonstrated resilience and advanced.
Performance of ETFs
The Innovator IBD 50 ETF (FFTY) gained 0.2% among growth ETFs. The iShares Expanded Tech-Software Sector ETF (IGV) fell 1%, while the VanEck Vectors Semiconductor ETF (SMH) down 0.35%. Notably, Nvidia stock, a large holding in SMH, set a new high with a 2.6% increase. The ARK Innovation ETF (ARKK), which tracks more speculative story stocks, fell 0.1%, while the ARK Genomics ETF (ARKG) gained 0.35%. The shares of Tesla (TSLA), a top investment in Ark Invest’s ETFs, increased by 5.3% as a result of robust EV sales in China and a new charging technology agreement with Rivian (RIVN).
Performance of Sector ETFs
The SPDR S&P Metals & Mining ETF (XME) sank 0.5%, while the SPDR S&P Homebuilders ETF (XHB) and U.S. Global Jets ETF (JETS) fell 0.3% and 0.6%, respectively. The Energy Select SPDR ETF (XLE) fell by 2.2%, while the Health Care Select Sector SPDR Fund (XLV) fell by 0.1%. Financial Select SPDR ETF (XLF) and SPDR S&P Regional Banking ETF (KRE) fell 0.75% and 1.3%, respectively.
Stocks Nearing Buy Points
Several equities have shown favourable action and are approaching potential purchase targets. Meritage Homes (MTH) increased by 2%, reclaiming a buy point from a flat base. Allegro MicroSystems (ALGM) shares rose 4% and reclaimed its 50-day moving average, breaking a consolidation trendline in stronger volume. Lantheus Holdings (LNTH) stock increased 5.2% and crossed above its 50-day moving average, perhaps establishing a consolidation with a potential purchase opportunity at 100.85. ELF Beauty (ELF) stock gained 3%, breaking through a three-week low of 108.43 intraday. ATI (ATI) shares rose 2.7% and was approaching a possible entry stage with a consolidation buy price of 43.32.
Market Rally Analysis and Forecast
The stock market fell slightly on Tuesday, although major indices resisted and rebounded from intraday lows. Despite the fact that there were more losers than winners, the general market trend remains positive. Index ETFs like the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) and the Invesco S&P 500 Equal Weight ETF (RSP) fell 0.9% but found support at their respective 10-day lines. The Nasdaq composite is still 8.6% over its 50-day moving average, while the Nasdaq 100 is 9.9% above that level. Leading equities may find support at significant moving averages or consolidate around typical buy points during this decline. However, it is critical to track market and industry performance.
Caution in the Face of a Pullback
During a market downturn, it’s critical to be cautious since some stocks may lag or undergo breakdowns. Before making investing selections, it is critical to examine recent performance and market conditions.
