Dow Jones Futures Rally After Key Inflation Report; First Republic rises 60% by allaying banking fears

Dow Jones futures rose more than 300 points Tuesday morning as a major inflation report and recovering financial data boosted early trading. Controversial regional bank First Republic (FRC) rose 60% in premarket action as federal steps to allay bank fears appeared effective following Monday’s plunge.


The SPDR S&P Regional Banking ETF (KRE) rose more than 6% and bounced 12% after Monday’s plunge. Key Corp (KEY) advanced nearly 15%, while Western Alliance (WAL) jumped 34%. Finally, Karl Schwab (SCHW) rallied 12% in early morning trading.

CPI inflation report

Wall Street suddenly sees a good chance that the Federal Reserve will pause its rate hike campaign at next week’s meeting, as the failure of three banks fuels concerns about the broader financial sector.

That could reduce the recent weight of the consumer price index, which rose 0.4% in February, in line with expectations. Core CPI rose 0.5% in February, above the 0.4% estimate. Headline CPI inflation reached 6.0%, in line with estimates, while core inflation also met estimates of 5.5%.

But almost regardless of the CPI outcome, half-point moves now appear to be off the table. And that’s just a week after Fed Chair Jerome Powell signaled that policymakers were ready to accelerate rate hikes again next week from February’s quarter-point pace.

Bank failures sent a rush to bonds and other safe havens, leading to a sharp plunge in government bond yields and signaling growing doubts about the strength of the economy. Even if the Fed doesn’t pause next week, markets now seem to be betting that rate cuts are imminent.

In terms of revenue, GitLab (GTLB) fell 30% in premarket trading after the company’s weaker-than-expected revenue guidance.

Earnings are still trickling down this week at the end of the season. being among them Academy Sport & Outdoors (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX), Five below (FIVE) and lennar (LEN).

Fair today

United Airlines (UAL) fell 4.7% after the company said it expects a quarterly loss in the first quarter.

Leader of electric vehicles Tesla (TSLA) was up 1% Tuesday morning following positive registration data out of China. Meanwhile, Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were higher leading up to the stock market opening.

Social media giant Meta platforms (META), IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New relic (NEWR) — as well as Dow Jones stocks Nike (OR) and Sales team (CRM) – are among the top stocks to watch during the ongoing correction in the stock market.

Palo Alto is an IBD Leaderboard watchlist stock. New Relic was recently an IBD Stock Of The Day. And Nike was near a buy zone in this week’s Stocks section.

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Dow Jones Today: Oil Prices, Treasury Yields

Prior to Tuesday’s market open, Dow Jones futures were up 1% and S&P 500 futures were up 1.2%. Tech-heavy Nasdaq 100 futures gained 1.1% in the morning action.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 1.1% and the SPDR S&P 500 ETF (SPY) was up 1.2% early Tuesday.

The 10-year US Treasury yield fell to 3.51% on Monday as safe-haven trading pushed bonds sharply higher following the collapse of Silicon Valley Bank. On Tuesday, the 10-year Treasury yield recovered to 3.57% in morning trading.

Oil prices continued to fall early Tuesday after Monday’s sharp losses. West Texas Intermediate futures fell 2% to trade just above $73 a barrel.

Stock market correction

On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq composite climbed 0.45% in a day of volatile trading.

Monday’s Big Picture column noted, “The S&P 500 fell more than 1% in early trading, but recovered to close less than 0.2% lower. The index found support around 3,800, where buyers also emerged during the swoon of the market in December.”

This is an important time to read IBD’s The Big Picture column amid the new stock market correction.

Five Dow Jones stocks to buy and watch now

Dow Jones stocks to watch: Nike, Salesforce

Since bottoming out on Oct. 3, Nike shares are up a whopping 59% to their recent high of 131.31. Now the stock is consolidating within a flat base that offers a buy point of 131.41, according to IBD MarketSmith pattern recognition. NKE shares rose 0.1% early Tuesday.

Despite the recent weakness, the stock is below its 50-day moving average, an important metric. A decisive rematch would be bullish for base-building prospects, cutting the right side of the pattern. The relative strength line also holds up well during the fast-moving stock market correction.

In recent weeks, Dow Jones leader Salesforce has shown great upside after strong fourth-quarter results. But those gains have largely vanished amid recent market weakness, and now the stock is back below the 178.94 cup-with-handle entry. Still, the stock’s recent strength is a reason to watch the software leader in the coming sessions. The CRM share rose 0.7% on Tuesday.

3 Top growth stocks to watch Stock market correction

Top stocks to watch: Meta, Palo Alto, New Relic

Facebook parent Meta Platforms is quietly building a flat base with a buy point of 197.26 after a revenue-driven price hike in February. Shares are about 8% off the last buy point, rising 0.8% on Monday. Meta-shares rose 0.9% on Tuesday morning.

Back story: Like social media rivals, Meta is struggling due to a sharp drop in ad revenue as customers grapple with macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions on a risky bet to build the “metaverse,” a virtual reality world that has yet to catch on.

IBD Leaderboard watchlist stock Palo Alto Networks continues to trade calmly in a hold following the share’s 12.5% ​​gain on Feb. 22. The shares remain within striking distance of a base’s 192.94 buy point. Bullish, the stock’s relative strength line is at new highs as the stock far outperforms market averages. PANW shares were up 0.5% on Tuesday.

Back story: On Feb. 21, the cybersecurity giant reported good results for the quarter ended January, when earnings were $1.05 per share, up 81% from a year earlier, on a 26% increase in revenue to $1. 7 billion.

The recent IBD stock of the day, New Relic, is working on a flat base with a buy point of 80.98 in the wake of the February 8 earnings-driven surge. The RS line will hold for the time being. Shares of NEWR fell early Tuesday.

Back story: New Relic offers a cloud-based suite of software products that enable organizations to collect, store and analyze massive amounts of data in real time. Customers gain greater insight into their business software to help make data-driven decisions.

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Stocks to keep an eye on when the stock market corrects

Here are four top stocks to watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct point of sale Point of sale type
New relic (NEW) 80.98 Flat base
Nike (by) 131.41 Cup with handle
Palo Alto Networks (PANW) 192.94 Cup with handle
Sales team (CRM) 178.94 Cup with handle
Source: IBD data as of March 13, 2023

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla stock

Tesla stock rose 0.6% on Monday as it continues to see some support around its 50-day moving average. Shares closed around 55% of their 52-week high on Monday.

TSLA shares rose 1% Tuesday morning, seeking contribution to Monday’s gains.

On Tuesday, China’s weekly electric vehicle registration data could be a key gauge of demand for Tesla in the world’s largest EV market, which is in the midst of a massive price war started by Tesla.

Dow Jones leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 1.3% on Monday, breaking a two-day losing streak and finding support at the long-term 200-day line. AAPL gained 0.8% on Tuesday morning.

Microsoft shares bullishly regained their 200-day line during Monday’s 2.1% jump. The stock is still about 20% off its 52-week high after recent declines. MSFT shares rose 1% early Tuesday.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.


Top growth stocks to buy and watch

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