The Dow Jones Industrial Average remained markedly lower after the hot inflation data. Twitter shares rose after shareholders voted on the offer for Tesla (TSLA) CEO Elon Musk to buy the firm. base of coins (CURRENCY) and riot block chain (RIOT) tanked as Bitcoin melted. Apple (AAPL) dove.
With the market under pressure, investors should look for base-forming stocks that could be good opportunities when the market improves. CMS Energy (CMS) and Comstock Resources (CRK) are strong examples.
Volume was up on the Nasdaq and the New York Stock Exchange compared to the same time Monday. This is a bad sign on a bad day.
The benchmark 10-year Treasury yield rose seven basis points to 3.43%. West Texas Intermediate crude oil fell almost 3% to more than $85 a barrel, though it recovered in afternoon trading.
Inflation data hurts the stock market
Stocks broadly fell after the consumer price index showed prices rose 0.1% in August from a month earlier. That came out hotter than estimates for a 0.1% monthly drop. Inflation rose 8.3% in August from a year earlier, higher than the expected increase of 8.1%.
The move saw Nomura call for a base rate hike of 100 at the Fed’s Open Market Committee meeting in September. It had previously forecast a rise of 75 basis points. It also expects a terminal rate of 4.50%-4.75% for February 2023.
“The Fed will probably have to be even more aggressive with raising rates and that’s bad news for risk assets,” Oanda senior market analyst Edward Moya said in a note to clients.
Nasdaq hit as small caps struggle
The Nasdaq was struggling at the top of the major indices. It fell almost 4% and was close to the lows of the day.
The S&P 500 also struggled, falling nearly 3%. shelter him (ALB) was a bright spot as it gained almost 3%.
All sectors of the S&P 500 were negative, with technology and communication services being the worst performers. The energy yielded the least ground.
Small caps were also under attack from the bears, with the Russell 2000 down more than 3%.
The Innovator IBD 50 ETF (FFTY), a gauge of growth stocks, also fell, falling about 2%.
Dow Jones today: Apple shares pull back sharply
The Dow Jones Industrial Average was suffering, sinking more than 800 points, or 2.5%.
Aggressive investors who moved into Apple stock were regretting the decision after it fell almost 5%. It had been the best performer of the previous session, but has now reversed below its 50 and 200-day moving averages.
AAPL shares also lost ground on an aggressive trend line entry and handle entry at 176.25.
But Apple’s losses were not as severe as those of boeing (LICENSED IN LETTERS). The aerospace giant was the worst performer in the Dow Jones Industrial Average today as it fell more than 5%.
Twitter stocks gain ahead of Elon Musk vote
Twitter shareholders voted Tuesday to approve Elon Musk’s takeover bid even though he is currently trying to get out of the deal.
The social media firm criticized the eccentric executive’s latest attempt to scuttle the $44 billion deal.
While Musk has claimed an alleged $7.75 million severance payment to whistleblower Peiter Zatko is a violation of the acquisition agreement, the firm said his latest letter regarding the termination agreement is “invalid and unfair.”
Twitter shares rose 2% and moved away from its 50-day line.
Tesla Values was markedly lower, down almost 4%, losing ground at a short pattern buy point of 314.74. It has now fallen back below its 200-day moving average, according to MarketSmith analysis.
Coinbase and RIOT Stocks Plunge as Bitcoin Melts
Coinbase was close to the lows of the day as it tumbled more than 6%. The volume was lighter, a mere crumb of comfort.
The stock, which cut its full-year forecast last month, managed to hold above the 21-day exponential moving average and its 50-day line. COIN shares are down almost 70% since the beginning of the year.
Bitcoin tanked as risk assets struggled. It is back below the $21,000 mark after shedding more than 6% in the last 24 hours, according to CoinDesk.
Other cryptocurrency plays also fell sharply. Grayscale Bitcoin Trust (GBTC) fell nearly 9% as Bitcoin mining plays riot block chain (RIOT) fell 7%.
Outside the Dow Jones: These 2 Stock Eye Buying Points
Utilities stock CMS Energy is showing relative strength as it eyes a handle entry of 71.29. CMS is in the top 15% of stocks in terms of price performance over the last 12 months. Big Money trails the stock as well, with its accumulation/distribution ratio coming in at a solid B-.
CMS Energy offers a dividend yield of 2.7%.
Comstock Resources is making a mug base with a handle. It is targeting a buy point at 21.28. It has once again struggled above the 21-day exponential moving average, an encouraging sign.
The oil and gas explorer is a member of IBD’s list of industry leaders. This is our tightest and most powerful screen.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
YOU MAY ALSO LIKE:
The Stock Market’s Forecast for the Next Six Months Has Big Risks for the Dow, But Also Hope
MarketSmith: research, charts, data and advice all in one place
These are the 5 best stocks to buy and watch right now
This is the ultimate Warren Buffett stock, but should you buy it?
This is the definitive action of Donald Trump: Is DWAC a purchase?