Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally attempt struggled for direction Wednesday as Fed chief Jerome Powell spoke. The major indexes shrugged off solid early losses, but later gave up decent gains to close slightly lower.
Fed chief Powell, speaking before the Senate Banking Committee on Wednesday, reaffirmed the central bank is “strongly committed” to fighting inflation aggressively. But he gave mixed signals about recession risks.
Crude oil futures, copper prices and Treasury yields fell significantly Wednesday, though they closed off their worst levels.
Health care names are among the more-resilient sectors right now. Bristol Myers Squibb (BMY), UnitedHealth (UNH), Eli Lilly (LLY), Vertex Pharmaceuticals (VRTX) and Harmony Biosciences (HRMY) are in or near buy areas. All have relative strength lines at highs.
China EV stocks have been rallying strongly for several weeks. Startup Li Auto (LI) rose modestly Wednesday to just shy of a record high. EV and battery giant BYD (BYDDF) has forged a handle on a daily chart.
The video embedded in this article discussed Wednesday’s market action and analyzed UNH stock, Bristol Myers Squibb and Halozyme (HALO).
Dow Jones Futures Today
Dow Jones futures dipped 0.2% vs. fair value. S&P 500 futures retreated 0.3% and Nasdaq 100 futures fell 0.45%.
Bitcoin traded back at $20,000 after drifting lower on Wednesday. The Bitcoin price hit an 18-month low near $17,600 on Saturday.
Fed Chief Powell On Recession Risks
“At the Fed, we understand the hardship high inflation is causing,” Fed chief Powell said in his prepared remarks. “We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so.”
Powell said the U.S. is “well positioned” to handle tighter Fed policy. He later said the risks of a recession ‘are not particularly elevated right now.” But he also said that an economic soft landing is “significantly more challenging” now.
In recent months, Powell has cheered Wall Street with comments minimizing recession risks, only for stocks to sell off the next session. Investors may feel he’s not telling the whole truth, or simply doubt his forecasts.
Stock Market Rally
The stock market rally opened solidly lower, soon rebounded higher as Fed chief Powell testified, but then closed with slim losses.
The Dow Jones Industrial Average fell 0.15% in Wednesday’s stock market trading. The S&P 500 index dipped 0.1%. The Nasdaq composite gave up 0.15%. The small-cap Russell 2000 dipped 0.2%
U.S. crude oil prices fell 3% to $106.19 a barrel, but after tumbling more than 6% at one point.
The 10-year Treasury yield tumbled 15 basis points to 3.16%, but rebounded off the 21-day moving average.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) tumbled just over 4%, reflecting losses in energy and commodity stocks. The Innovator IBD Breakout Opportunities ETF (BOUT) slid 1.7%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.2%. The VanEck Vectors Semiconductor ETF (SMH) slid 1.2%.
SPDR S&P Metals & Mining ETF (XME) slumped 3.8% and the Global X U.S. Infrastructure Development ETF (PAVE) fell 0.6%. U.S. Global Jets ETF (JETS) ascended 0.5%. SPDR S&P Homebuilders ETF (XHB) climbed 0.7%. The Energy Select SPDR ETF (XLE) lost 4% and the Financial Select SPDR ETF (XLF) dipped 0.2%. The Health Care Select Sector SPDR Fund (XLV), with UNH stock a huge component along with Eli Lilly, Bristol Myers and Vertex, added 1.4%.
Stocks To Watch
VRTX stock advanced 0.8% to 272.31, breaking a trendline for an early entry, with 279.23 as another aggressive buy area. The official buy point is 292.85.
LLY stock gained 3.1% to 306.69, rebounding from the 50-day line in above-average volume while closing right on a short trendline. Investors could buy shares here or use Wednesday’s high of 309.65 as an aggressive entry. Eli Lilly stock is working on a new consolidation.