Dow Jones Drops After Fed-Fueled Market Sell-Off; Treasury Yields Surge
The Dow Jones Industrial Average dropped Thursday, threatening to add to Wednesday’s Fed-fueled stock market sell-off. The Labor Department’s weekly unemployment claims came out before the open.
Darden Restaurants (DRI), along with homebuilders KB Home (KBH) Lennar (LEN), were key earnings movers Thursday morning. A strong early move from Salesforce.com (CRM) propped the Dow, after the company affirmed a $50 billion revenue goal for 2026.
Darden Restaurants shares slid nearly 2%. KB Home stock fell almost 3%, and Lennar shares traded up 1% after the market open. Salesforce traded up more than 2%.
Block (SQ) declined almost 2% after being downgraded from buy to neutral at Mizuho. Electric-vehicle leader Tesla (TSLA) traded 0.1% lower Thursday. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were modestly lower after today’s stock market open.
Top stocks to watch amid the market’s recent weakness include Continental Resources (CLR), DoubleVerify (DV), Neurocrine Biosciences (NBIX) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stock Chevron (CVX). Keep in mind the new stock market correction is a good reason for investors to be mostly, if not entirely, on the sidelines.
DoubleVerify is an IBD Leaderboard stock, but its position size was trimmed during last week’s losses. Tesla was featured in this week’s Stocks Near A Buy Zone column. Neurocrine was Wednesday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Treasury Yields, Oil Prices, Jobless Claims
After Thursday’s opening bell, the Dow Jones Industrial Average lost 0.6%, while the S&P 500 moved down 0.8%. The tech-heavy Nasdaq Composite fell 1.15% in morning action.
Among the exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 0.9%, and the SPDR S&P 500 ETF (SPY) fell 0.7%.
The 10-year Treasury yield surged to 3.65% Thursday, rebounding from Wednesday’s fall. On Wednesday, the 10-year Treasury yield hit a new high at 3.62% before reversing lower. Meanwhile, US oil prices looked to rebound from two days of losses. Oil prices rose more than 1%, putting West Texas Intermediate futures back above $84 a barrel.
Released early Thursday, first-time jobless claims came in at 213,000, below estimates that expected a rise to 220,000 vs. 213,000 in the previous week.
Stock Market Correction
On Wednesday, the stock market posted another disappointing performance, as the major stock indexes sold off following the Fed’s interest rate decision. The Dow Jones Industrial Average and the S&P 500 both lost 1.7%, while the Nasdaq declined 1.8%.
Wednesday’s The Big Picture column commented that Fed Chairman Jerome Powell “made it crystal-clear that the Fed’s No. 1 job today is to focus on getting the long-run inflation rate to 2% annually. And it will take a long time before that could occur.”
To prepare for a new stock market rally, investors should be waiting two things: a rally attempt, then a follow-through day.
In a market correction, the first day the index closes higher counts as day 1 of its attempted rally. The action on day 2 and day 3 is irrelevant as long as the index doesn’t undercut its latest low. If that low is undercut, the rally try is done and the market needs to try again. Wednesday’s action undercut the recent lows, so we’re back to looking for a day 1.
On day 4 and later, you are looking for the Nasdaq or S&P 500 to rise sharply in higher volume than the previous session. That’s a follow-through day. It gives investors the green light to start buying leading stocks breaking out past correct buy points. It should put your portfolio and mindset in sync with the stock market action by gradually committing capital to leading stocks.
During stock market correction, don’t tune out. Instead, create watchlists to find emerging stock market leadership by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, the RS line angles upward. If a stock lags the broad market, the line will point lower.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron
Dow Jones stock Chevron fell 0.8% Wednesday, still barely holding above crucial support around its 50-day line. Shares are trading about 6% away from their latest buy point at 166.93 out of a cup with handle — according to IBD MarketSmith chart analysis — amid a strong performance by energy stocks so far this year. The stock gained 1.8% as oil prices bounced early Thursday.
CVX stock shows a strong 97 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 Buy And Watch In The Current Stock Market Correction
Top Stocks To Watch: Continental, DoubleVerify, Neurocrine, Vertex
Oil explorer and producer Continental Resources is building a cup with handle with a 72.80 buy point, according to IBD MarketSmith chart analysis. The relative strength line touched a recent high last week, but remains a bit off its 52-week high. CLR shares traded up 1.7% early Thursday.
IBD Leaderboard stock DoubleVerify remains below its 28.07 buy point in a bottoming base following Wednesday’s 1.25% loss. DV shares were down 1.3% Thursday morning.
Wednesday’s IBD 50 Stocks To Watch pick, Neurocrine Biosciences, is building a flat base that has a 109.36 buy point. The stock’s RS line hit a new high Wednesday, signifying big stock market outperformance. Shares were down 1.5% Thursday.
Vertex Pharmaceuticals fell further below its 50-day line after Wednesday’s 2.3% loss. The stock has been holding up well during the ongoing market weakness, as indicated by a RS line that is approaching new highs. A new flat base has a 306.05 buy point, and the stock’s resilience makes it a top idea to watch. Vertex shares dropped 0.55% Thursday.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla stock traded down 2.6% Wednesday, as it continues to trade just shy of a short base’s 314.74 buy point. Meanwhile, keep an eye out for additional buy points if the stock is able to climb further up the right side of its larger consolidation, which spans back to January. Shares moved down 0.1% Thursday morning.
Bullishly, the stock’s RS line is at its highest level since April. Shares are about 27% of their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 2% Wednesday, snapping a two-day win streak. Last week, the stock closed at its lowest level since July 18. Apple stock traded down 0.5% Thursday morning.
Microsoft lost 1.4% Wednesday, hitting another 52-week low. The software giant is about 32% off its 52-week high. Microsoft shares lost 0.1% early Thursday.
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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