The Dow Jones Industrial Average reversed lower Friday, as Federal Reserve Chairman Jerome Powell warned of "some pain" to fight inflation in his Jackson Hole speech.
Gap, Marvell, Ulta Beauty and Workday were all key earnings movers Friday.
Gap shares rose 4% while Marvell stock slid 2.3%. Ulta Beauty shares rallied 2% as Workday stock jumped 9%.
Electronic Arts rallied 5% following news reports that Amazon plans to buy the video game maker. Electric-vehicle leader Tesla traded up 0.5% Friday. Elsewhere, Dow Jones tech leaders Apple and Microsoft were lower after today's stock market open.
In the current stock market pullback, Arista Networks, Axcelis Technologies, Costco and GlobalFoundries as well as Dow Jones stocks Amgen and McDonald's — are among the top stocks to buy and watch.
GlobalFoundries is a new IBD SwingTrader stock, while Costco stock was added to the IBD Leaderboard in the wake of last week's breakout move. Arista and Axcelis were featured in this week's Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices
Early Friday, the Dow Jones Industrial Average dropped 0.65%, while the S&P 500 fell 0.9%. The tech-heavy Nasdaq composite lost 1.1% in morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust moved down 1.1%, and the SPDR S&P 500 ETF was down 0.9% in early trade.
The 10-year Treasury yield ticked higher to 3.07% early Friday, following Thursday's fall to 3.02%. This week, the 10-year Treasury yield is above the 3% level for the first time since July 21.
U.S. oil prices are on pace for solid gains this week after losses last week saw West Texas Intermediate futures reach their lowest level since January. WTI futures rose more than 1% early Friday, trading near $94 a barrel.
Market Rally Feels Powell's 'Pain'; What To Do Now
Inflation Data, Powell Speech
The Federal Reserve's preferred inflation gauge came out Friday morning at 8:30 a.m. ET. The personal consumption expenditure price index dropped 0.1% for the month of July, cooler than the expected 0.1% rise. Year over year, the PCE index climbed 6.3%, in line with estimates. Personal income rose 0.2% in July, lower than the 0.6% forecast.
The PCE price index is one measure of U.S. inflation, tracking the change in prices of goods and services purchased by consumers throughout the economy.
Powell will give a speech on the central bank's economic outlook Friday. In prepared remarks, he said, "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."
Stock Market Pullback
On Thursday, the stock market extended gains through most of the session, closing at the day's highs. The Dow Jones Industrial Average gained 1%, while the S&P 500 moved up 1.4%. The tech-heavy Nasdaq composite climbed 1.7%.
Thursday's The Big Picture column commented, "Top growth stocks outperformed Thursday, as the Innovator IBD 50 ETF rallied 1.7% to hit its highest level since June 13."
If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Amgen, McDonald's
Dow Jones stock Amgen is building a flat base that has a 258.55 buy point, amid a strong performance by biotechs so far this year. An early entry at 253.87 is also in play. Shares remain below their 50-day support level after Thursday's 0.5% gain. The stock was down 0.4% early Friday.
AMGN stock shows a solid 92 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock's fundamental and technical metrics.
McDonald's shares still trade below a 265.56 cup-with-handle entry following Thursday's 0.65 rise, according to IBD MarketSmith chart analysis. MCD shares inched lower Friday morning.
4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally
Top Stocks To Watch: Albemarle, Arista, Axcelis, Costco
Arista Networks, one of last week's IBD 50 Stocks To Watch picks, continues to plod up the right side of a double-bottom base that offers a 143.67 buy point. A handle formed this week, moving the correct entry to 132.97. Arista's RS line has been trending higher and is approaching a new high. ANET shares fell a fraction early Friday.
IBD Leaderboard stock Costco is still below under its 552.81 buy point from a cup with handle, as shares rose 1.4% Thursday. Wait for a bullish retake of the entry before buying shares. Shares inched higher early Friday.
Chip-equipment maker Axcelis broke out past a cup with handle's 79.93 buy point, according to IBD MarketSmith chart analysis, with a 12.9% surge Thursday. The 5% buy area goes up to 83.93. Shares also surged past a short trendline drawn within the handle itself. The stock lost 0.3% Friday morning.
New IBD SwingTrader stock GlobalFoundries decisively reclaimed a double bottom's 61.98 buy point Thursday, advancing 6.8% and closing in the buy area that tops out at 65.08. An alternative entry, from a handle, is in play at 66.06. A breakout past that entry would be a sign to accumulate more shares. GFS stock moved down 2% Friday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock inched lower Thursday, snapping a two-day win streak. Shares of the electric-vehicle giant moved up 0.5% Friday morning.
Tesla stock has been wrestling to overcome resistance around its 200-day line. Tesla is about 29% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.5% Thursday, as they trade about 5% away from a cup with handle's buy point at 176.25. Bullishly, the stock's relative strength line is holding at new highs, indicating big stock market outperformance. Shares fell 0.3% Friday morning.
Microsoft rallied 1.1% Thursday, snapping a seven-day losing streak. Shares remain sharply below their long-term 200-day line. The stock lost 0.4% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
