Inflation Fears Rise with Yields; Tesla Stock Climbs Before Deliveries


Dow Jones futures, along with S&P 500 and Nasdaq 100 futures, were lower in overnight trade ahead of Tuesday’s open. Tesla stock broke its losing streak on Monday as Wall Street prepares for the company’s third-quarter deliveries. This week, the focus will be on key inflation data, with the personal income and outlays report expected on Friday. Additionally, August housing starts hit a three-year low, and the Federal Reserve is preparing for a longer period of high interest rates, leading to concern among investors in the homebuilding sector. Nike is set to report its fiscal first-quarter 2024 results on Thursday, with analysts anticipating a drop in profits and a third consecutive quarter of earnings declines.

In Monday’s stock market, the Dow Jones Industrial Average and the S&P 500 posted small gains, while the tech-heavy Nasdaq composite saw a moderate increase. Tesla and Nvidia both experienced positive movement, and tech giants Apple and Microsoft ended higher. Several stocks, including Airbnb, DraftKings, Meta Platforms, Uber, Amgen, and Caterpillar, are being closely watched during the ongoing stock market correction. Oil prices remained near their 2023 highs, while the 10-year U.S. Treasury yield reached new highs at 4.54%.

As the stock market faces a correction, investors are advised to reduce their market exposure and focus on building a watchlist of strong stocks that could become leaders in the next uptrend. One tool to consider is the relative strength line, which measures a stock’s performance against the S&P 500. IBD’s Stock Screener provides a list of top-rated stocks with lines at new highs, and MarketSmith offers lists that highlight stocks nearing buy points or rising past buy points.

Amgen and Caterpillar are among the Dow Jones stocks to watch, as Amgen nears a buy point in a cup-with-handle pattern and Caterpillar forms a flat base with a buy point. Other stocks worth monitoring include Airbnb, DraftKings, Meta Platforms, and Uber. Tesla stock is expected to report its Q3 deliveries next week, and analysts predict that the numbers will fall short of the previous quarter. Apple and Microsoft continue to struggle, with Apple working on building a flat base and Microsoft receiving an upgrade from Guggenheim.

Overall, the stock market’s performance is uncertain, and investors must exercise caution while identifying potential opportunities and monitoring key indicators such as inflation data, housing starts, and corporate earnings reports.

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