The Dow Jones Industrial Average rallied out of the red after the latest Fed minutes were released. EV stock Rivian (RIVN) soared on guidance even as Tesla (TSLA) fell. Microsoft (MSFT) and Apple (AAPL) were among the top blue chips.
Volume was lower on both the Nasdaq and the New York Stock Exchange compared to the same time Tuesday. This is not ideal on an up day.
The yield on the benchmark 10-year Treasury note rose 10 basis points to 2.91%. West Texas Intermediate crude oil slipped just over 1% to trade at just over $98 per barrel.
Fed Minutes Show Gloves Are Off Amid Inflation
The Federal Reserve, led by Chairman Jerome Powell, decided to make a larger than expected interest rate hike last month as the inflation outlook had deteriorated, the newly released minutes from the meeting showed.
They ultimately decided to raise the benchmark rate by 0.75% despite previously taking such a large hike off the table.
“The near-term inflation outlook had deteriorated since the time of the May meeting,” the minutes said. “Participants were concerned that the May CPI release indicated that inflation pressures had yet to show signs of abating, and a number of them saw it as solidifying the view that inflation would be more persistent than they had previously anticipated.”
U.S. Stock Market Today Overview
Last Update: 3:02 PM ET 7/6/2022
They also decided that an “increase of 50 or 75 basis points would likely be appropriate at the next meeting.”
Central bankers seem to have taken the gloves off as they try to tackle the issue. They believed the economic outlook “warranted moving to a restrictive stance of policy.” In addition, they thought an “even more restrictive stance” could be appropriate if inflation pressures persist.
Nasdaq Rallies As Tech Stocks Flex
The Nasdaq turned in the best gain as it rose nearly 0.8%. Lucid Motors (LCID) was a standout here as it rose nearly 7%.
The S&P 500 was also shining, and was up about 0.7%. Leaderboard stock Northrop Grumman (NOC) impressed here as it rose nearly 4%.
The S&P 500 sectors were mostly positive. Technology and utilities were making the best gains while energy and financials were lagging.
Small caps also pared losses, though the Russell 2000 remained down 0.4%.
Growth stocks also surged back, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, trading virtually flat.
Dow Jones Today: Microsoft, Apple Stock Pop
The Dow Jones Industrial Average impressed by rallying out of the red to gain more than 150 points, or 0.5%.
Old rivals Apple and Microsoft were two of the best performers on the blue chip index. AAPL rose, but is continuing to trade below its 50-day moving average. The relative strength line is showing signs of improvement though.
MSFT managed to retake its 50-day line after it rose about 1.5%. Microsoft stock remains down around 20% so far for the year.
Both were outshone by Leaderboard stock UnitedHealth (UNH) though after it popped more than 2%.
Tesla Stock Slips As Rival EV Play Explodes
Tesla stock was struggling despite sunny guidance from EV rival Rivian. TSLA was down more than 1% heading into the close. It remains down about 42% since the start of the year.
In contrast, electric vehicle maker Rivian exploded, rising more than 10%. It was given a boost after it said it is on track to deliver 25,000 vehicles in 2022. The firm also reported it produced 4,401 vehicles in its most recent quarter. Although it delivered 4,467, which was in line with internal expectations.
Despite the bullish spike, RIVN stock remains down an eye-watering 71% since the start of the year.
Outside Dow Jones: 3 Stocks Test Buy Points
Evolent Health is in a buy zone after clearing a new handle entry of 32.55. The relative strength has spiked to fresh heights, a positive. It is breaking out after it struggled to clear a prior cup-with-handle base. It has been moving higher in strong volume, which is a sign of institutional accumulation.
The bullish move saw the medical software stock added to the prestigious Leaderboard list of leading stocks.
A couple of other names also managed to pass buy points of their own.
Dollar Tree is actionable after clearing a cup-with-handle entry of 165.45. Overall performance at the bargain retailer is excellent, which is reflected in an IBD Composite Rating of 96.
The relative strength line is hitting new heights, a positive. Big Money has been buying up stock of late, MarketSmith data shows.
Funko is also in a buy zone after rising past a cup-with-handle buy point of 25.18. This is an early, second stage pattern. The RS line is also spiking here. The stock holds a best possible Composite Rating of 99. In total, 93% of shares are currently held by funds.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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BofA Securities maintains Amazon.com at ‘buy’ with a price target of $154.00
Six people in critical condition, one still missing after Paris blast – prosecutor
© Reuters. French firefighters and rescue forces work after several buildings on fire following a gas explosion in the fifth arrondissement of Paris, France, June 21, 2023. REUTERS/Gonzalo Fuentes
PARIS (Reuters) – Six people remained in a critical condition and one person was believed still missing on Thursday, one day after a blast ripped through a street near Paris’ historic Latin Quarter, the city’s public prosecution office said. “These figures may still change,” prosecutor Maylis De Roeck told Reuters in a text message, adding that around 50 people had been injured in the blast, which set buildings ablaze and caused the front of one to collapse onto the street. Of two people initially believed missing, one has been found in hospital and is being taken care of, the prosecutor said, adding: “Searches are ongoing to find the second person.” Authorities have not yet said what caused the explosion, which witnesses said had followed a strong smell of gas at the site. The explosion led to scenes of chaos and destruction in the historic Rue Saint Jacques, which runs from the Notre-Dame de Paris Cathedral to the Sorbonne University, just as people were heading home from work. It also destroyed the facade of a building housing the Paris American Academy design school popular with foreign students. Florence Berthout, mayor of the Paris district where the blast occurred, said 12 students who should have been in the academy’s classrooms at the time had fortunately gone to visit an exhibition with their teacher.
“Otherwise the (death toll) could have been absolutely horrific,” Berthout told BFM TV. She said three children who had been passing by at the time were among the injured, although their lives were not in danger.
4 big analyst cuts: Alcoa & DigitalOcean shares drop on downgrades
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Alcoa, DigitalOcean, Teleflex, and Xcel Energy.InvestingPro subscribers got this news in rapid fire. Never be left in the dust again.Alcoa stock drops on Morgan Stanley downgrade Alcoa (NYSE:) shares fell more than 3% pre-market today after Morgan Stanley downgraded the company to Underweight from Equalweight and cut its price target to $33.00 from $43.00, as reported in real time on InvestingPro.The firm sees a significant decline in consensus estimates, and as negative earnings revisions materialize, it believes the stock will face downward pressure and underperform.The analyst’s estimates for EBITDA in Q2, 2023, and 2024 are substantially lower than the consensus. The stock is currently trading above its historical average. The firm said its downward revisions in earnings estimates and price target are attributed to the company’s high operating leverage to aluminum prices.DigitalOcean stock plunges on downgradePiper Sandler downgraded DigitalOcean (NYSE:) to Underweight from Neutral with a price target of $35.00. As a result, shares plunged more than 5% pre-market today.The company reported its last month, with revenue beating the consensus estimate, while EPS coming in worse than expected. Furthermore, the company provided a strong outlook, which was above the Street estimates.2 more downgradesTeleflex (NYSE:) shares fell more than 3% yesterday after Needham downgraded the company to Hold from Buy, noting that UroLift expectations may still be too high.According to Needham, their checks indicate that urologists are reducing their use of UroLift due to its retreatment rates, reimbursement cuts, and increasing use of competing procedures. This is also supported by their Google Trends data analysis, which indicates decreasing search interest in UroLift.BMO Capital downgraded Xcel Energy (NASDAQ:) to Market Perform from Outperform and cut its price target to $64.00 from $69.00 to reflect the lower-than-expected terms of the company’s regulatory settlement in Colorado.Amid whipsaw markets and a slew of critical headlines, seize on the right timing to protect your profits: Always be the first to know with InvestingPro.Start your free 7-day trial now.
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