Dow Jones Futures: Struggling Stock Market Rally Faces Key Inflation Report As Oil Prices Crash

Dow Jones futures were little changed following Tuesday’s stock market fall, as U.S. oil prices crashed below $96 a barrel. A key inflation report — the consumer price index — is due out before Wednesday’s stock market open.

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Early Wednesday, earnings reports from Delta Air Lines (DAL) and Fastenal (FAST) are on tap.

Banking giants JPMorgan Chase (JPM) and Morgan Stanley (MS), along with Taiwan Semiconductor Manufacturing (TSM) will report Thursday morning. Citigroup (C), Dow Jones stock UnitedHealth (UNH) and Wells Fargo (WFC) wrap up the trading week with earnings reports on Friday morning.

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Dow Jones Futures Today: Treasury Yields, Oil Prices, CPI

After Tuesday’s close, Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were little changed vs. fair value. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield ticked lower to 2.95% Tuesday, following Monday’s drop to 2.99%. Meanwhile, U.S. oil prices crashed more than 8%, with West Texas Intermediate trading below $96 per barrel.

The Labor Department’s consumer price index is due out Wednesday morning at 8:30 a.m. ET. Consumer prices are expected to rise 1.1% in June, per Econoday estimates. Inflation is expected to surge 8.8% in June from a year ago, up from May’s 8.6% year-over-year rise.

Stock Market Today

On Tuesday, the Dow Jones Industrial Average fell 0.6%, while the S&P 500 moved down 0.9%. The tech-heavy Nasdaq composite lost 0.95%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 1%, and the SPDR S&P 500 ETF (SPY) declined 0.9%.

Tesla (TSLA) slid 0.5% Tuesday. Among Dow Jones leaders, Apple (AAPL) was up 0.7% and Microsoft (MSFT) traded 4.1% lower in today’s stock market.

In the struggling stock market environment, Dow Jones leaders Johnson & Johnson (JNJ), Merck (MRK) and UnitedHealth Group (UNH) — as well as BJ’s Wholesale Club (BJ), Dollar Tree (DLTR), Northrop Grumman (NOC) and Quanta Services (PWR) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.

Northrop and UnitedHealth are IBD Leaderboard stocks. Dollar Tree is an IBD SwingTrader stock. BJ’s is an IBD 50 stock. Quanta was Thursday’s IBD Stock Of The Day. Northrop was featured in this week’s Stocks Near A Buy Zone column.

Struggling Stock Market Rally

Tuesday’s The Big Picture column commented, “Even if the distribution-day count remains almost minimal, it doesn’t mean the stock market is doing fine. It’s entirely reasonable to think volume is lighter because institutional investors are reluctant to trade before Wednesday’s consumer inflation report. Without that brake on trading, volume could easily have increased Monday and Tuesday, and we’d be looking at multiple distribution days now.”

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.

Four Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Johnson & Johnson, Merck

Dow Jones leader Johnson & Johnson remains below a double-bottom base’s 181.84 buy point, according to IBD MarketSmith chart analysis. The company reports earnings on July 19. JNJ shares fell 1.4% Tuesday.

Drug giant Merck dropped 0.7% Tuesday, and is right below its flat base’s 95.02 buy point. Medical stocks in general, and biotechs in particular, have shown rising strength in recent stock market action.

Health insurance giant and IBD Leaderboard stock UnitedHealth remains above its double-bottom base’s 507.36 buy point after Tuesday’s 0.5% fall. Shares are in buy range. UNH reports second-quarter results Friday morning.

UNH stock shows a strong 96 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.

3 Top Growth Stocks To Watch In The Current Stock Market Rally

Top Stocks To Watch: BJs, Dollar Tree, Northrop, Quanta

IBD 50 stock BJ’s Wholesale is still in the 5% buy range above a cup-with-handle’s 67 buy point despite Tuesday’s 0.8% drop. The stock’s relative strength line is at new highs, which is a sign of big stock market outperformance.

IBD SwingTrader stock Dollar Tree fell further below its cup-with-handle’s 166.45 buy point Tuesday, losing 1.2%. On a positive note, the discount retailer’s RS line is right at a new high. Dollar Tree stock shows a strong 97 out of a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup.

IBD Leaderboard stock Northrop Grumman is building a new flat base that has a 492.40 buy point. NOC shares were down 1.4% Tuesday.

Quanta Services is putting the finishing touches on a cup with handle that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Shares are about 5% away from the latest entry after Tuesday’s 2.6% fall.

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Tesla Stock

Tesla stock declined 0.5% Tuesday, extending losses after Monday’s 6.55% skid. Shares fell further below their 50-day line and remain deeply below their 200-day line ahead of the company’s July 20 earnings report date.

Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 44% off that record high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.7% Tuesday, recovering a portion of Monday’s 1.5% decline. Apple reclaimed its 50-day line last week, but is now testing that key level. Shares remain far below their long-term 200-day line. The stock is about 20% off its 52-week high. Apple earnings are due out July 28.

Microsoft slid 4.1% Tuesday, giving up its recently reclaimed 50-day line. The stock closed about 27% off its 52-week high. The software giant will report quarterly results on July 26.

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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