Dow Jones Falls Ahead Of Fed Rate Hike Decision, Powell Comments; Tesla Boosts China Production


The Dow Jones Industrial Average briefly fell more than 225 points Wednesday ahead of the Federal Reserve’s rate hike decision, due in the afternoon. Social media company Snap (SNAP) plunged as much as 13% after falling short of revenue estimates. And Tesla (TSLA) stock reversed lower even after Reuters reported the electric-vehicle giant plans to increase production at its Shanghai plant due to rising demand.


The Fed’s two-day policy meeting concludes Wednesday, with a rate policy decision at 2 p.m. ET, followed by comments from Fed Chair Jerome Powell. The Fed is widely expected to raise the federal funds rate by 25 basis points to a range of 4.50% to 4.75%. Another quarter-point increase is expected in March, which would bring the Fed funds rate very close to the Fed’s terminal rate of 5% to 5.25%. That’s where the Fed thinks it can pause rate hikes to let prior increases work their way through the economy.

ADP issued its employment report Wednesday, and it showed January payrolls came in at 106,000, below the 158,000 estimate and down from 235,000 in the previous month. ADP’s report is a precursor to Friday’s jobs report from the Labor Department.

Key Earnings Movers: AMD, Amgen

Advanced Micro Devices (AMD) rallied 6% after the company topped fourth-quarter targets late Tuesday, while guiding lower for its sales outlook in the current quarter. Dow Jones drug giant Amgen (AMGN) dropped 2.3% after its mixed fourth-quarter earnings report.

Early Wednesday, Peloton Interactive (PTON) jumped 10% after its fiscal second-quarter results.

Meta Platforms (META) will report after the market closes, while Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL) are scheduled for late Thursday.

Stock Market Today

Electric-vehicle leader Tesla moved down 1.1% Wednesday morning. Dow Jones tech giants Apple and Microsoft (MSFT) were mixed after today’s stock market open.

IBD Leaderboard stock Impinj (PI), Etsy (ETSY) and Wingstop (WING) — as well as Dow Jones stock JPMorgan Chase (JPM) — are among the top stocks to buy and watch, with the ongoing strength of the market rally.

Impinj is an IBD Leaderboard stock. Etsy was a recent IBD Stock Of The Day. Impinj and Wingstop were featured in this week’s Stocks Near A Buy Zone column.

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

Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average fell 0.6%, and the S&P 500 moved down 0.25%. The tech-heavy Nasdaq composite fell 0.1%, propped up by the rally in AMD shares.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 0.1% and the SPDR S&P 500 ETF (SPY) dipped 0.3% early Wednesday.

The 10-year U.S. Treasury yield ticked lower to 3.46% Wednesday morning ahead of today’s Fed decision. The 10-year yield continues to trade below its 50-day line and just off its recent lows.

Oil prices crept higher after Tuesday’s modest advance. West Texas Intermediate futures gained less than 1% in morning trade, bouncing between $79 and $80 a barrel, as investors await Wednesday’s OPEC production decision.

Stock Market Rally

On Tuesday, the Dow Jones Industrial Average rallied 1.1%, and the S&P 500 moved up 1.5%. The tech-heavy Nasdaq composite advanced 1.7%.

Tuesday’s The Big Picture column commented, “Distribution days have been virtually nonexistent since Jan. 6. The S&P 500 currently shows three, but only one had the feeling of meaningful institutional selling. That was on Jan. 18, when the index fell 1.6% in  higher volume. The Big Picture on Friday bumped up its invested percentage to a range of 60% to 80% when the Nasdaq surged above its 200-day line.”

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

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: JPMorgan

Banking giant JPMorgan is in the 5% buy range above a 138.76 flat-base buy point after a 0.6% rise Tuesday. The 5% buy zone tops out at 145.70. JPM shares traded down 0.9% early Wednesday.

JPM stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

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

Top Stocks To Buy And Watch: Impinj, Etsy, Wingstop

IBD Leaderboard stock Impinj ended Tuesday back above a 129.12 buy point in a cup base following its recent breakout move, as shares raced 3.9% higher Tuesday. The 5% buy area goes up to 135.58. PI stock was up 1.7% Wednesday.

Backstory: Impinj’s expertise lies in radio frequency semiconductors to identify, locate and authenticate items. While losing money in 2020, the company earned 25 cents per share in 2021. And annual earnings are expected to surge 284% to 96 cents per share this year.

Etsy is back above a 137.01 buy point in a cup with handle after Tuesday’s 2.1% rise. With the stock regaining the entry, the 5% buy area goes up to 143.86. Etsy shares were down 0.3% Wednesday morning.

Backstory: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that, in the last few years, has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.

Wingstop is rapidly approaching a 170.97 buy point in a lopsided cup base, with a 1.2% gain Tuesday. Keep an eye out for a potential handle to offer a lower entry. WING stock was down 0.3% early Wednesday.

Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Columbia, Panama, Singapore and the U.K. The company added a net 40 stores in the prior quarter. Earnings are due out Feb 22.

How Did Your Online Broker Do In IBD’s 2023 Best Online Broker Survey?

Stocks To Buy And Watch In Stock Market Rally

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

Company Name Symbol Correct Buy Point Type Of Base
Monster (MNST) 104.75 Flat base
Vertex (VRTX) 324.85 Cup base
Axon (AXON) 189.72 Cup with handle
Etsy (ETSY) 137.01 Cup with handle
JPMorgan (JPM) 138.76 Flat base
Wingstop (WING) 170.97 Cup base
Source: IBD Data As Of Feb. 1, 2023

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

Tesla Stock

Tesla stock rallied 3.9% Tuesday, rebounding after Monday’s dive. Despite their strong rebound since Jan. 6, shares are still below the 200-day line. And Tesla stock closed about 57% off its 52-week high Tuesday.

Shares looked to add to Tuesday’s gains, but reversed 1.1% lower Wednesday. According to Reuters, the electric-vehicle giant plans to raise production at its Shanghai plant over the next two months to meet increase demand due to its recent price cuts.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares moved up 0.9% Tuesday, recovering a part of Monday’s 2% sell-off. Shares are still holding above their 50-day line following strong gains in recent sessions. The stock remains around 20% off its 52-week high. Apple will report its quarterly earnings late Thursday. AAPL stock moved down 0.6% Wednesday.

Microsoft stock climbed 2.1% Tuesday, bouncing off support at its 50-day line, which it regained last week. Shares remain 22% off the 52-week high. MSFT traded up a fraction Wednesday.

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

Learn How To Time The Market With IBD’s ETF Market Strategy

Find The Best Long-Term Investments With IBD Long-Term Leaders

MarketSmith: Research, Charts, Data And Coaching All In One Place

How To Research Growth Stocks: Why This IBD Tool Simplifies The Search For Top Stocks