Dow Jones Futures Rise On Hopes Inflation Fever Has Peaked As CPI Data Looms

Dow Jones futures rose sharply early Wednesday, along with S&P 500 futures and Nasdaq futures, with a key inflation report on tap. The stock market had an up-and-down session Tuesday, with techs closing higher as the Dow Jones lagged.

X

Coinbase (COIN) and Unity Software (U) plunged late on weak first-quarter results. COIN stock and Unity are notable Ark Invest holdings.

Meanwhile, Merck stock, Dollar Tree (DLTR) are among stocks worth watching amid the ongoing market correction.

Inflation Report

The Labor Department will release the April consumer price index at 8:30 a.m. ET Wednesday. Economists expect the CPI to show a 0.2% increase vs. March. Core CPI, which excludes food and energy, should climb 0.4%. Year over year, consumer prices should surge 8.1%, down from March’s 40-year high of 8.5%. Core inflation should ease to 6% from March’s 6.5%. Year-over-year comparisons are getting tougher.

Meanwhile, the Labor Department will release the April producer price index on Thursday.

Stocks To Watch

Dow giant Merck (MRK), Louisiana-Pacific (LPX), Atkore (ATKR), Anthem (ANTM) and DLTR stock are all worth watching right now.

Merck stock is holding just below a cup-with-handle buy point. LPX stock and possibly Atkore are working on handles after both gapped up on earnings last week. ANTM stock and Dollar Tree (DLTR) have pulled back to their 50-day lines around the top of prior buy zones. This could offer a buying opportunity, or  a sell signal.

Meanwhile, the relative strength line for Apple (AAPL) keeps hitting new highs, as shares rose 1.6% on Tuesday. AAPL stock is fighting to get back to its 200-day line, but it’s easily the best-looking megacap.

Microsoft (MSFT) looks a lot worse than Apple stock, but did rebound 1.9% Tuesday after undercutting 2022 lows. Cybersecurity play Fortinet (FTNT) jumped 6.8% Tuesday after also undercutting its 2022 lows. That could be a hopeful sign for these institutional-quality software leaders, but they are nowhere close to being actionable.

Anthem and Microsoft stock are on IBD Leaderboard. MRK stock is on SwingTrader. Microsoft and FTNT stock are IBD Long-Term Leaders. ATKR stock is on the IBD 50. Dollar Tree was Tuesday’s IBD Stock Of The Day.

The video embedded in the article reviewed Tuesday’s market action and analyzed Merck stock, Louisiana-Pacific and Anthem.

Dow Jones Futures Today

Dow Jones futures rose 1% vs. fair value. S&P 500 futures climbed 1.2% and Nasdaq 100 futures advanced 1.4%.

Crude oil futures rebounded 4%.

The 10-year Treasury yield fell 7 basis points to 2.92%, continuing a retreat this week ahead of key inflation data.

The CPI inflation report is sure to move Dow Jones futures and Treasury yields before the open.

China consumer prices rose 2.1% in April vs. a year earlier. Producer prices jumped 8%. Both were slightly higher than expected. That comes amid severe Covid lockdowns that have slashed production and demand.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Tuesday

The stock market opened sharply higher, soon reversed lower, then rebounded again before fading to mixed.

The Dow Jones Industrial Average fell 0.3% in Tuesday’s stock market trading. The S&P 500 index climbed 0.2%, with FTNT stock leading the way. The Nasdaq composite rose 1%. The small-cap Russell 2000 closed little changed.

U.S. crude oil prices fell 3.2% to $99.76 a barrel, back below $100. Crude tumbled 6.1% on Monday.

The 10-year Treasury yield retreated nine basis points to 2.99%. The 10-year yield hit 3.17% intraday Monday before reversing lower.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.3%, with MSFT stock the No. 1 holding and Fortinet also a component. The VanEck Vectors Semiconductor ETF (SMH) up 2.5%.

SPDR S&P Metals & Mining ETF (XME) declined 1.1% and the Global X U.S. Infrastructure Development ETF (PAVE) lost 1%. U.S. Global Jets ETF (JETS) ascended 0.9%. SPDR S&P Homebuilders ETF (XHB) declined 1.4%. The Energy Select SPDR ETF (XLE) advanced 0.9% and the Financial Select SPDR ETF (XLF) dropped 0.9%. The Health Care Select Sector SPDR Fund (XLV) rose 0.4, with MRK stock and Anthem both holdings.

Ark Stocks Tumble

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) edged down 0.1% in Tuesday’s regular session and ARK Genomics ETF (ARKG) popped 3.1%.

Coinbase and Unity stock are top 10 Ark Invest holdings. COIN stock and Unity reported weaker-than-expected first-quarter results and gave weak guidance, with Coinbase also filing for a mixed shelf offering. Coinbase dived 16% in premarket trade while Unity stock crashed 22%. Both already fell to fresh record lows Tuesday.