Dow Jones Futures: Fed Minutes Lift Market Rally, Microsoft Makes Key Move;

Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally rose slightly Wednesday in an up-and-down session as hawkish Fed minutes held few surprises. Treasury yields rebounded, still flashing a recession warning. Crude oil prices fell again, but came off lows.

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Microsoft stock and Google parent Alphabet (GOOGL) reclaimed their 50-day moving averages. Amazon.com (AMZN) and Apple (AAPL) moved above their 10-week lines. Microsoft (MSFT) and Google stock are IBD Long-Term Leaders.

Tesla rivals BYD (BYDDF) and Li Auto (LI) are in buy zones. BYD stock rose modestly within a buy zone while Li Auto fell back into range. Tesla stock edged lower.

GME Stock Split

After Wednesday’s close, original meme stock GameStop (GME) announced plans for a 4-for-1 stock split. GME stock popped 9% overnight after closing down 2.4% to 117.30.

Stock splits have come back in favor. Amazon stock split 20-for-1 in early June. Google stock will split 10-for-1 on July 15 while Tesla has proposed a 3-for-1 split. But those tech titans have or had high share prices, making it difficult to trade, say, AMZN stock options. That’s not the case with GME stock.

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures declined 0.15% and Nasdaq 100 futures lost 0.1%.

Crude oil prices sank 1%.

The 10-year Treasury yield rose 1 basis point at 2.91%. The 2-year yield climbed 1 basis point to 2.97%.

At 8:15 a.m. ET, ADP will release its June estimate of private-sector hiring. At 8:30 a.m. ET, the Labor Department issues its weekly jobless claims report. Those come ahead of Friday’s June jobs report.

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

Fed Minutes, Economic Data

Fed minutes from the June 14-15 policy meeting revealed that policymakers said a “restrictive policy” was needed, and might need to become “more restrictive,” fearing that inflation could become “entrenched.”

Policymakers saw a late July hike of 50 or 75 basis points as likely, according to the Fed meeting minutes. But Fed chief Jerome Powell already said as much after the meeting.

More generally, the Fed minutes offered no real surprises and underscored the big shift in economic conditions in the past three weeks.

The Fed minutes mentioned “inflation” 90 times but not “recession” even once. Since the mid-June Fed meeting, recession fears have swelled while commodity prices have fallen sharply.

The Fed minutes slightly reinforced market expectations for a rate hike of 75 basis points later this month, with 50 basis points in September. December still marks the likely end of Fed rate hikes.

Earlier Wednesday, the Labor Department’s JOLTS survey showed that jobs openings fell to 11.254 million in May from April’s upwardly revised 11.68 million. That was slightly higher than expected, but the biggest month-to-month drop since August 2020.

The June ISM nonmanufacturing index dipped to a two-year low but topped views and still pointed to solid growth. The jobs subindex fell to 47.4 from 50.2, below the break-even 50 level.

Stock Market Rally

The stock market rally moved between slim gains or losses for most of Wednesday’s trading. The major indexes gained steam after the 2 p.m. ET release of Fed meeting minutes, but then pared the advance in the closing minutes.

The Dow Jones Industrial Average rose 0.2% in Wednesday’s stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite advanced 0.35%. The small-cap Russell 2000 fell 0.8%.

Microsoft and Google stock rose just over 1% to move above their 50-day moving averages. Amazon stock edged up 0.7%, coming right up to the 50-day line and above its 10-week line. Apple stock fell short of its 50-day, but Wednesday’s 1% gain pushed the iPhone giant above its 10-week line.

U.S. crude oil prices fell 1% to $98.53 a barrel, well off morning lows but after diving 8.2% on Tuesday. Gasoline futures, which topped $4 a gallon just a few weeks ago, sank 4% to $3.20. Prices at the pump have been falling for the past three weeks and are set to drop significantly in the next few weeks.

The 10-year Treasury yield rebounded 10 basis points to 2.9% after plunging 30 basis points in the prior three sessions. The two-year Treasury yield jumped 14 basis points to 2.96%. The Treasury yield curve is now slightly more inverted, reflecting rising recession risks.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) was flat, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 1%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.1%, with MSFT stock a top holding. The VanEck Vectors Semiconductor ETF (SMH) rose 0.7%.

SPDR S&P Metals & Mining ETF (XME) fell 0.7% and the Global X U.S. Infrastructure Development ETF (PAVE) ticked…