Dow Jones futures rose modestly early Wednesday, along with S&P 500 futures and Nasdaq futures, with Treasury yields pulling back slightly. Costco Wholesale headlined overnight earnings with Meta Platforms set to unveil virtual reality hardware and artificial intelligence tools.
The stock market correction hit new lows on the major indexes Tuesday, more than wiping out Monday's slim gains. The 10-year Treasury yield continued to hit long-term highs.
The Federal Trade Commission and 17 states on Tuesday filed a sweeping antitrust lawsuit vs. Amazon.com, a long-expected move. FTC Chair Lina Kahn, who made several controversial antitrust moves during her tenure, rose to prominence with her Amazon analysis.
Amazon stock fell Tuesday, extending a sharp downtrend. Google parent Alphabet, Microsoft and Apple were other megacaps losing notable ground.
Neurocrine Biosciences, oil machinery play Nov, Aflac, Regeneron Pharmaceuticals, Modine Manufacturing and FedEx are near buy points.
Another name that's been holding up relatively well is COST stock.
Costco earnings and revenue beat views Tuesday night. Shares fell modestly in overnight trading. Costco stock declined 1% to 552.96 in Tuesday's regular session, dropping below its 50-day line. The discount giant has a 571.16 buy point from a flat base right next to a longer consolidation. Investors could use the Sept. 20 high of 569.22 as an early entry.
Meta stock is on IBD Leaderboard, with NOV stock on the Leaderboard watchlist. Microsoft stock is on the IBD Long-Term Leaders list. Meta, NVO and MOD stock are on the IBD 50.
Neurocrine Biosciences was Tuesday's IBD Stock Of The Day. FedEx stock was Monday's selection.
The video embedded in the article analyzed Tuesday's market action and reviewed NBIX stock, Meta Platforms and Nov.
Dow Jones Futures Today
Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures advanced 0.35% and Nasdaq 100 futures climbed 0.4%.
The 10-year Treasury yield fell several basis points to 4.51%.
Crude oil futures rose nearly 2%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Meta Connect
Facebook and Instagram parent Meta Platforms will hold its Meta Connect conference on Wednesday and Thursday. It's expected to show off its Quest 3 virtual-reality headset and new generative AI tools.
Meta stock dipped 0.6% to 298.96 on Tuesday, just below its 50-day moving average. The social media giant has a 312.87 cup-with-handle buy point.
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Stock Market Correction
The stock market correction intensified Tuesday, with all the major indexes easily wiping out Monday's gains to hit new lows.
The Dow Jones Industrial Average retreated 1.1% in Tuesday's stock market trading, tumbling below its 200-day line after finding support there on Monday. The S&P 500 index fell 1.5%, now approaching its 200-day. The Nasdaq composite tumbled 1.6% to just above the 13,000 level.
Amazon stock fell 4% to 125.98, a three-month low.
GOOGL stock sank 1.9% to 128.56, now clearly below the 50-day line. the Justice Department antitrust case vs. Google continues in federal court. MSFT stock declined 1.7% to 312.14, a four-month low. AAPL stock fell 2.3% to 171.96, also to a four-month closing low.
The major indexes look bad, while all the details look worse.
The small-cap Russell 2000 slumped 1.3% and the Invesco S&P 500 Equal Weight ETF lost 1.4%. Both are well below their 200-day lines.
Leading stocks continue to weaken, with energy still the strongest sector.
U.S. crude oil prices rose 0.8% to $90.39 a barrel.
The 10-year Treasury yield climbed 2 basis points to 4.56%, the highest since October 2007. That's after initially dipping to 4.51%. This is not about the Fed. Shorter-term yields continue to trade flat in recent day, while the odds of another Fed rate hike are falling.
The stock market is oversold by various measures, so a short-term bounce wouldn't be a surprise. But it's hard to see stocks rebounding seriously without Treasury yields retreating, or at least moving sideways for an extending period.
Meanwhile, a federal government shutdown on Oct. 1 seems increasingly likely, though a stopgap funding measure is still possible.
For now, it's a stock market correction.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF gave up 1.3%. The iShares Expanded Tech-Software Sector ETF declined 1.6%. Microsoft stock is a major IGV holding. The VanEck Vectors Semiconductor ETF also fell 1.6%.
Reflecting more-speculative story stocks, ARK Innovation ETF lost nearly 1% and ARK Genomics ETF edged up 0.1%.
SPDR S&P Metals & Mining ETF gave up 1.9%. U.S. Global Jets ETF and SPDR S&P Homebuilders ETF both descended 1.5%. The Energy Select SPDR ETF fell 0.6% and the Health Care Select Sector SPDR Fund shed 0.85%.
The Industrial Select Sector SPDR Fund declined 1.5%, with FDX stock an XLI component.
The Financial Select SPDR ETF dropped 1.3%. The SPDR S&P Regional Banking ETF slipped 1.6%.
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Stocks To Watch
NBIX stock rose 0.9% to 114.66 on Tuesday. Shares are working on a 119.29 buy point on a cup-with-handle base going back nearly 10 months. A move above Tuesday's high of 115.35 could offer an early entry. The relative strength line, the blue line in the chart provided, is at eight month highs. The RS line tracks a stock's performance vs. the S&P 500.
NOV stock declined 1.2% after moving off the 50-day/10-week line on Monday. Nov, formerly National Oilwell Varco, is not far from retaking a still-valid 20.98 cup-with-handle buy point.
AFL stock dipped 0.5% to 76.44 working on a 78.43 flat base, right on top of a longer consolidation, with 78 as an early entry. Investors could view this as a shallow cup-with-handle base with an official 78 buy point. The RS line for AFL stock is skyrocketing, at eight-month highs.
REGN stock edged down 0.3% to 832.41. Shares have been consolidating around the top of the buy zone for a double-bottom base. Regeneron stock has an 847.50 buy point from a five-weeks-tight pattern that's just turned into a flat base.
MOD stock is trying to bounce off its 10-week line, though it fell 3.2% to 44.14 on Tuesday. The maker of thermal management systems for automakers, buildings and more could have an entry above Monday's high of 46.18. Modine stock is in the process of forging a new flat base.
FDX stock fell 1.9% to 261.39, just holding the 50-day line. Shares have a 270.95 flat-base buy point, according to MarketSmith analysis. Monday's high of 268.43 offers a slightly lower early entry.
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What To Do Now
Investors need patience. Monday's meager uptick was hardly a green light for investors to start making new buys, with heavy selling resuming Tuesday. Wait for clear signs of market strength over several days.
Don't be too thrilled with stocks holding up relatively well. You should be watching those stocks. They may end up leading the next market rally, but many resilient stocks have cracked over the past several sessions.
If a market rally attempt gets underway, you want to have your watchlists up to date. Keep in mind that a rally attempt also could create shorting opportunities as well.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson and Threads at @edcarson1971 for stock market updates and more.
