The Dow Jones Industrial Average fell over 100 points Tuesday, as Fed chief Jerome Powell called the U.S. economy “much improved.” Treasury yields backed off from recent highs. EV giant Tesla stock reversed lower, while chip giants Applied Materials and Nvidia are stocks to watch.
Tesla (TSLA) reversed lower Tuesday morning following Monday’s 2.3% gain.
Among the top stocks to watch, chip leaders Applied Materials (AMAT), ASML (ASML), MKS Instruments (MKSI), Nvidia (NVDA) and Qorvo (QRVO) are showing leadership potential in the current stock market rally.
Dow Jones Today: Treasury Yields, Powell Comments
The Dow Jones Industrial Average dipped 0.2%, while the S&P 500 moved down 0.1%. The tech-heavy Nasdaq composite slumped 0.2% after reversing lower in morning trade.
U.S. Stock Market Today Overview
Last Update: 10:50 AM ET 3/23/2021
On Tuesday, Fed Chairman Powell and Treasury Secretary Janet Yellen will make an appearance before the U.S. House Committee on Financial Services. In prepared remarks, Powell said the U.S. economy is “much improved,” but the recovery is “far from complete.” He commented that the Fed will “continue to provide the economy the support that it needs for as long as it takes.”
The 10-year Treasury yield dropped under 1.7% Monday, following Thursday’s spike to 1.757%. Early Tuesday, the 10-year Treasury yield eased further to 1.661%.
Among exchange traded funds, the Innovator IBD 50 (FFTY) traded down 0.6% on Tuesday. The Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) lost 0.4% Tuesday. Meanwhile, the SPDR S&P 500 ETF (SPY) moved down less than 0.1%.
Stock Market Rally: Nasdaq Tests Key Level Again
Amid the current stock market rally, the Dow Jones Industrial Average and S&P 500 indexes snapped two-day losing streaks Monday with modest gains.
Meanwhile, the tech-heavy Nasdaq is again trying to retake its key 50-day moving average line, but fell short Monday. Last Thursday, the Nasdaq composite gave up that key level. The Nasdaq will need to overcome this key hurdle in order to maintain its upward trajectory. The 50-day line is a critical potential resistance level. If the Nasdaq decisively clears it, then new highs could be on the horizon.
Monday’s Big Picture commented, “The Nasdaq climbed 1.2%, a good follow-up after Friday’s bullish price reversal. But a late swoon cost the index nearly half its gain for the day, a sign that the stock market’s confirmed uptrend remains delicate. The composite closed just below its 50-day moving average after peeking above it earlier in the day.”
Dow Jones Stocks: Boeing
Inside the Dow Jones Industrial Average, Boeing is back in buy range above a 244.18 buy point in a cup base, according to IBD MarketSmith chart analysis.
Shares fell 1% Tuesday.
Chip Stocks To Watch: Applied Materials, Nvidia
Chip stocks continue to be some of the best technology names in the current stock market rally. The VanEck Vectors Semiconductor ETF (SMH) was a new IBD SwingTrader addition Monday amid a 2.3% rise. The ETF fell 0.9% Tuesday morning.
Applied Materials continues to rebound from its 50-day support level. Shares fell 0.6% Tuesday and are just 4% from new highs.
ASML jumped back above its 50-day line Monday, but fell about 1.4% Tuesday. Shares are in week six of a potential base. The minimum length of a cup base is six weeks, so a new buy point could emerge at the end of the week.
Qorvo found support at its 50-day line Friday and continued its rebound Monday with a 1.9% rise. Shares are closing in on a 191.93 buy point, while an early entry exists at 185.96. Early Tuesday, Qorvo stock moved down 0.9%.
Recent IBD Stock Of The Day MKS Instruments ended just below its 177.46 buy point in a double bottom amid Monday’s 2.4% gain. The 5% buy zone goes up to 186.33. Tuesday morning, the stock moved down 1.3%.
According to IBD Stock Checkup, MKSI stock boasts a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
Chip giant Nvidia rose 0.5% Tuesday. The graphics-chip maker could be forming the right side of a new base, but it’s a bit too early for a conventional buy point. A strong day to reclaim the 50-day line would be bullish for the stock’s prospects.
Stocks Near Buy Zones: Alphabet, Wayfair
IBD Leaderboard stock Alphabet completed a five-week flat base Friday, creating a new buy point at 2,145.24, according to IBD MarketSmith chart analysis. Shares are about 6% below the new entry. GOOGL stock moved up 0.3% Tuesday.
According to Leaderboard commentary, “Alphabet has made better progress than other big-cap techs lately. Support at the 21-day line is defining the current chart action. The last base was second stage.”
Monday’s IBD 50 Stocks To Watch pick, Wayfair, is trying to break out past a 343.09 buy point in a cup with handle. Shares rallied 0.3% Tuesday and are in buy range.
Tesla stock reversed from early gains to edge lower Tuesday morning. The stock jumped 2.3% Monday, after Cathie Wood’s ARK Invest announced its new price target at 3,000 by 2025.
Shares of Tesla ended Monday about 26% off their 52-week high. Tesla stock could be forming a new base, but it is too early for a new risk-optimal buy point.
On Feb. 22, Tesla broke down through its key 10-week moving average line, a critical support level. On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple fell 0.6% Tuesday, threatening to give back a part of Monday’s 2.8% gain. Apple stock is rebounding from its long-term 40-week line and could soon again try to reclaim its 10-week line.
On Feb. 18, Apple stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, software giant Microsoft moved up 0.8% Tuesday, moving further above its key 50-day line. Shares are back above their 232.96 buy point and are approaching a 246.23 buy point in a new flat base.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
YOU MAY ALSO LIKE: