Dow Jones Falls After Key Inflation Data; Fed Decision, Powell Comments Later Today

The Dow Jones Industrial Average dropped Wednesday after more key inflation data, with the release of the producer price index. Later today, the Federal Reserve’s two-day meeting will conclude with an interest rate decision, followed by comments from Fed Chair Jerome Powell. Finally, Tesla stock rose modestly after the company slightly raised the price of its Model Y electric vehicle in the U.S.

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The producer price index — a gauge of prices received by producers for their goods — fell 0.3% on the month, cooler than estimates. Year over year, wholesale inflation slowed to 1.1% from 2.3%, also lower than expected. Core PPI inflation eased to 2.8%. It was expected to fall to 2.9% from 3.2%.

The Fed is widely expected to skip a rate hike at its two-day policy meeting that wraps up on Wednesday at 2 p.m. ET. The move would pause the 10 consecutive rate increases begun in March last year.

However, Wall Street also expects policymakers to signal their intent to hike again, barring a pronounced softening of the job market and core services inflation. Just how hawkish the Fed’s signals are today will likely determine how the S&P 500 responds.

Stock Market Today

Advanced Micro Devices (AMD) rallied 1.2% after Reuters reported Amazon (AMZN) was considering AMD’s newest AI chip for its AWS cloud-computing business.

EV giant Tesla (TSLA), now up 13 days in a row, rose 0.5% Wednesday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were higher after today’s stock market open.

Dexcom (DXCM), Floor & Decor (FND), Kinsale Capital (KNSL) and Churchill Downs (CHDN) — as well as Dow Jones stocks Cisco Systems (CSCO), JPMorgan Chase (JPM) and Salesforce (CRM) — are among the best stocks to buy or watch in the stock market uptrend.

Tesla is an IBD Leaderboard stock, while Floor & Decor was IBD’s Stock Of The Day on Thursday. Churchill Downs featured in this week’s Stocks Near A Buy Zone story.

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Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average fell 0.4%, weighed down as UnitedHealth Group (UNH) tumbled nearly 8%. The health insurer warned of a spike in medical costs in the second quarter at the Goldman Sachs health care conference.

The S&P 500 added 0.3%, while the tech-heavy Nasdaq composite also gained 0.3% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded up 0.3%, while the SPDR S&P 500 ETF (SPY) rose 0.35% early Wednesday.

After the PPI inflation data, but ahead of the Fed decision, the 10-year U.S. Treasury yield on Wednesday ticked lower to 3.78%. On Tuesday, the 10-year yield closed at its highest level since March 9.

Oil prices sloshed higher in early Wednesday trade after Tuesday’s rebound from recent lows. West Texas Intermediate futures rose more than 1% Wednesday, moving back above $70 a barrel. Weekly inventory data from the Energy Information Administration is out at 10:30 a.m.

Stock Market Action

On Tuesday, the Dow Jones Industrial Average rose 0.4%. The S&P 500 gained 0.7%, while the tech-heavy Nasdaq composite climbed 0.8%, hitting a new 2023 high.

Tuesday’s Big Picture column commented, “When it comes to the Nasdaq, well, the index’s longest losing streak since May 5 has been two sessions. The index closed 9% above its 50-day line and crossed an upper channel line, raising the probability for a pullback. The Invesco QQQ Trust (QQQ) ended 10.1% above its 50-day line. That’s above the 6% to 7% threshold that has flagged pullbacks for the Nasdaq 100 in the past.”

Now is an important time to read IBD’s The Big Picture column after the recent bullish change in the market’s outlook.

Five Best Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Cisco, JPMorgan, Salesforce

Dow Jones networking giant Cisco Systems is breaking out past a 50.58 buy point in a cup-with-handle base, posting a 0.6% rise Tuesday. CSCO stock rose 0.1% Wednesday.

Dow Jones banking leader JPMorgan is nearing a 143.37 flat-base buy point after a five-day win streak. Shares are just 2% away from their latest buy point. JPM stock gained 0.4% early Wednesday.

Salesforce rallied past alternative entries at 193.91 and 200.00 in recent weeks, according to IBD Leaderboard analysis. In recent weeks, shares reached the 20% profit zone from a 178.94 cup-with-handle entry, and are now trying to bounce from support at the 10-week line. CRM stock dropped 0.9% Wednesday morning.

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

Best Stocks To Buy And Watch: Dexcom, Floor & Decor, Churchill Downs

Dexcom gave up a flat base’s 126.44 buy point, with a 0.8% drop Tuesday, according to IBD MarketSmith pattern recognition. The 5% buy area will go up to 132.76 if the stock retakes the entry. DXCM stock rose 0.2% Wednesday.

IBD SwingTrader stock Floor & Decor decisively regained its 50-day line during last week’s gains, placing the flooring retailer in a new buy area. FND stock is just 3% away from a conventional buy point at 101.39. Shares were up 0.1% early Wednesday.

Insurance leader Kinsale Capital closed Tuesday in the 5% buy area past a 345.75 buy point amid a 1.1% rise in the session. The buy zone runs up to 363.04. KNSL stock fell 0.7% Wednesday morning.

Last week, IBD Leaderboard watchlist stock Churchill Downs found support around its 50-day line, triggering a bullish signal with an alternate entry near 139. But the stock is still around that level, as it also traces a flat base with a 150.45 buy point. Shares dropped 0.6% early Wednesday.

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Best Stocks To Buy And Watch In Stock Market Rally

These are four best stocks to buy and watch in today’s stock market, including a Dow Jones leader.

Source: IBD Data As Of June 12, 2023

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

Tesla Stock

IBD Leaderboard stock Tesla rallied 3.55% Tuesday, hitting a new 2023 high and moving further above a double-bottom base’s 207.79 buy point. Shares closed Tuesday 18% off their 52-week high.

TSLA stock looked to add to its extended win streak, rising 0.5% Wednesday morning.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple stock snapped a three-day win streak, falling 0.3% Tuesday after an analyst downgrade. Shares hit an all-time high at 184.95 last week and are just off that level. The stock continues to hold sharply above a 157.38 buy point. Early Wednesday, AAPL stock was up 0.4%.

Microsoft shares rose 0.7% Tuesday, rebounding for a fourth-straight session and again nearing their 2023 highs. MSFT stock continues to hover around the 20%-25% profit-taking zone from a 276.76 flat-base buy point, so investors take at least some profits. And on Wednesday morning, Microsoft shares were up 0.6%.

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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