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The Dow Jones and Stock Market Movements: A Comprehensive Analysis

2024-11-25

The Dow Jones Industrial Average and various major stock indexes witnessed a notable upward trend on Monday. Tesla (TSLA) surged close to a new high, while MicroStrategy (MSTR) continued its rebound in the stock market. Before the opening bell, Dow Jones futures rose by 0.8% or 350 points above fair value. The S&P 500 futures also moved up by 0.7%, and the tech-heavy Nasdaq 100 futures traded up by 0.7% in morning trading.

Unraveling the Dynamics of the Stock Market

Early Monday's Market Scenario

In early Monday trading, the 10-year Treasury yield slightly decreased to 4.34%. Oil prices eased, with West Texas Intermediate futures trading around $71.10 per barrel. Among exchange-traded funds, the Invesco QQQ Trust (QQQ) and the SPDR S&P 500 ETF (SPY) both moved up by 0.7% ahead of the open. Tesla stock rallied by 2.4% premarket on Monday, just shy of a new 52-week high. Shares were significantly extended past a 264.86 cup-with-handle entry. Meanwhile, MicroStrategy jumped by 4.3%, aiming to add to Friday's rebound following Thursday's 16% plunge. The price of bitcoin traded just above $98,000 in early action.

Stock Market Today: Key Earnings and Economic Data

This week, key earnings reports include Burlington Stores (M), Nordstrom (JWN), and Dick's Sporting Goods (DKS), along with Dell (DELL), CrowdStrike (CRWD), and Semtech (SMTC). On the economic front, the Fed's primary inflation gauge, the core personal consumption expenditures price index (PCE), is expected to be released on Wednesday midmorning, which is a change from the usual premarket fare. Other important economic data includes jobless claims, durable goods orders, and a second estimate on third-quarter GDP growth. New home sales for October will be released on Tuesday, followed by pending home sales on Wednesday.

Amazon, Google, and Nvidia in the Stock Market

Amazon elbowed out Google while Nvidia shoved Apple aside. On Friday, the Dow Jones Industrial Average advanced by 1%, and the S&P 500 climbed by 0.4%. The tech-heavy Nasdaq composite moved up by 0.2%. Among the best companies to watch on the stock market today are Broadcom (AVGO), Deckers Brands (DECK), Heico (HEI), Cloudflare (NET), and Tradeweb Markets (TW). Dow Jones components making notable moves are Amazon.com (AMZN), Apple (AAPL), Microsoft (MSFT), and Sherwin-Williams (SHW). Broadcom featured in this Stocks Near A Buy Zone column. There were four new stocks on IBD MarketSurge's "Breaking Out Today" list Friday, notably Atlassian (TEAM), which topped a 256.39 cup-with-handle entry. Check for potential breakouts on the "Near Pivot" list. To find additional stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20, and Stocks Near A Buy Zone.

Dow Jones Leaders and Their Buy Points

Dow Jones leader Sherwin-Williams is approaching a 392.57 buy point in a flat base, although shares edged lower on Monday. Outside the Dow Jones index, artificial intelligence giant Broadcom remains below its 50-day moving average as it continues to build a flat base with a 186.42 entry. Broadcom shares rose by 0.6% on Monday. Heico is in buy range above its flat base's 269.38 buy point and is a recent IBD Stock Of The Day. Shares gained 0.7% early Monday. Deckers stock surged past a buy point in a cup-with-handle base at 182.26 on Friday as shares continued to rally in recent months. Deckers stock was up by 1.6% on Monday. Cloudflare broke out last week, topping a 99.17 buy point in a cup with a handle. The 5% buy zone runs up to 104.13, so shares are barely extended. Cloudflare stock climbed by 1.5% premarket on Monday. Finally, Tradeweb closed Friday just below a 136.13 entry in a flat base. Tradeweb stock rose by 1.1% in premarket action on Monday.

Stock Market Today: Companies to Watch

These are four stocks in or near buy zones in today's stock market.Company Name: TradewebSymbol: (TW)Correct Buy Point: 136.13Type Of Buy Point: Flat baseCompany Name: Costco WholesaleSymbol: (COST)Correct Buy Point: 923.83Type Of Buy Point: Flat baseCompany Name: BroadcomSymbol: (AVGO)Correct Buy Point: 186.42Type Of Buy Point: Handle entryCompany Name: Deckers BrandsSymbol: (DECK)Correct Buy Point: 172.57Type Of Buy Point: Handle entrySource: IBD Data as of Nov. 20Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on growth stocks, the Dow Jones Industrial Average, and the stock market today.

On Monday, stock index futures witnessed a notable rise as investors carefully evaluated Donald Trump's selection of Scott Bessent to serve as the Treasury Secretary. This development had a significant impact on the market, with S&P 500 futures (SPX) seeing a 0.5% increase, Nasdaq 100 futures (US100:IND) also rising by 0.5%, and Dow futures (INDU) gaining 0.7%. Additionally, the 10-year Treasury yield (US10Y) experienced a decline of 5 basis points. These movements in the financial markets highlight the importance of such appointments and their potential to influence economic trends.

Unraveling the Impact of Trump's Treasury Choice on the Markets

Analysis of S&P 500 Futures

The S&P 500 futures showed a positive trend on Monday, with a 0.5% increase. This indicates that investors have a certain level of confidence in the market's future performance. The rise in S&P 500 futures can be attributed to several factors. Firstly, the appointment of Scott Bessent as the Treasury Secretary may bring about certain policy changes that are perceived to be beneficial for the economy. Secondly, the overall market sentiment remains relatively optimistic, with investors looking for opportunities in the stock market. However, it is important to note that the stock market is highly volatile and subject to various external factors. Therefore, the continued monitoring of market trends is crucial for investors to make informed decisions. 2: The 0.5% increase in S&P 500 futures also reflects the market's reaction to the current economic conditions. With the global economy showing signs of recovery, investors are becoming more willing to take risks and invest in the stock market. The performance of S&P 500 futures serves as an important indicator of the overall market sentiment and can provide valuable insights for investors. It is essential for investors to analyze the underlying factors driving the rise in S&P 500 futures and assess their potential impact on their investment portfolios.

Insights into Nasdaq 100 Futures

The Nasdaq 100 futures also witnessed a 0.5% increase on Monday. This indicates that technology-related stocks are performing well in the market. The rise in Nasdaq 100 futures can be attributed to the strong performance of some of the leading technology companies. These companies have been driving the growth in the Nasdaq 100 index and are expected to continue to do so in the future. However, it is important to note that the technology sector is highly volatile and subject to rapid changes. Therefore, investors need to carefully assess the risks associated with investing in technology stocks. 2: The performance of Nasdaq 100 futures also reflects the market's confidence in the growth potential of the technology sector. With the increasing adoption of digital technologies and the rise of e-commerce, the technology sector is expected to continue to play a crucial role in the global economy. Investors who are looking for long-term growth opportunities may consider investing in technology stocks. However, they need to be aware of the risks involved and adopt a diversified investment approach to manage their risks.

Examining Dow Futures

Dow futures (INDU) saw a 0.7% increase on Monday. This indicates that the blue-chip stocks are also performing well in the market. The rise in Dow futures can be attributed to the positive sentiment towards the overall economy and the performance of some of the major companies in the Dow Jones Industrial Average. These companies have a significant impact on the stock market and their performance can influence the market sentiment. However, it is important to note that the Dow Jones Industrial Average is composed of 30 large-cap companies and may not fully represent the performance of the entire stock market. 2: The 0.7% increase in Dow futures also reflects the market's optimism about the future economic prospects. With the implementation of various economic policies and the recovery in key sectors, the economy is expected to continue to grow. Investors who are looking for stability and long-term returns may consider investing in blue-chip stocks. However, they need to carefully analyze the financial health and performance of these companies before making any investment decisions.

In a significant development for the U.S. stock market, Dow contracts reached a record high on Monday. This surge was led by gains among U.S. stock index futures, driven by investor optimism following Scott Bessent's nomination as Treasury Secretary in the incoming Trump administration. President-elect Donald Trump's decision to name Bessent late on Friday ended weeks of speculation. Some investment strategists believe that Bessent could take steps to restrain further government borrowing while still fulfilling fiscal and trade campaign pledges.

Bessent's Nomination: A Game Changer for U.S. Stocks

Investor Optimism and Bessent's Role

Joe McCann, CEO at Asymmetric in Miami, emphasized the beauty of Bessent's nomination. He stated that Bessent is a fiscal conservative, which sets the stage for more fiscal discipline. This, according to McCann, is something that the market is really going to welcome. The nomination has instilled confidence among investors, leading to significant gains in stock futures.The domestically focused small-caps index futures also rose by 1%, with the yield on 30-year Treasury bonds leading declines across the curve. This shows the complex interplay between different sectors and asset classes in the market.

Impact on Big Banks and Megacaps

Big banks saw gains, with Wells Fargo up 1.1% and Morgan Stanley adding 1.2% in premarket trading. Popular 'Trump trade' Tesla also rose 2.2%, indicating the broader market sentiment. Among megacaps, Alphabet and Amazon.com rose 0.8% and 0.9%, respectively. This shows that the market rally is not limited to specific sectors but is affecting a wide range of companies.The benchmark S&P 500 crossed 6,000 points for the first time just days after the election verdict and has jumped more than 4% since Nov. 4. The Russell 2000 index has surged more than 8% during the same period and both indexes are near their respective record highs. This shows the strength and resilience of the U.S. stock market.Brokerage Barclays raised its full-year 2025 forecast for the S&P 500 to 6,600 points from 6,500, further highlighting the positive outlook for the market.

Inflation Expectations and Fed Policy

Yields on Treasury bonds had surged after Trump's victory on expectations that his policies could stoke inflationary pressures and slow down the pace of the Federal Reserve's monetary policy easing. However, Bessent is seen as being less aggressive on tariffs than some of the rhetoric espoused by Trump. A fall in bond yields in response to his unveiling suggests that some concerns about a new wave of inflationary pressures from import tariffs have eased.Expectations for what the U.S. Federal Reserve's policy move is likely to be in December have recently swayed between a pause and a cut. The CME Group's FedWatch Tool shows a near 56% probability that the central bank will lower borrowing costs by 25 basis points. This shows the uncertainty surrounding the Fed's policy decisions and the impact it could have on the stock market.The Personal Consumption Expenditure report, the central bank's preferred inflation gauge, will be on investors' radar this Thanksgiving week, along with the latest estimate on gross domestic product and minutes from the Fed's policy meeting earlier this month. This indicates the importance of these economic indicators in shaping market sentiment.

Crypto Stocks and Other Market Movements

Crypto stocks such as MicroStrategy advanced 5.4%, MARA Holdings rose 4.8% and Coinbase added 1.4%, with bitcoin prices just shy of the $100,000 mark. This shows the growing influence of cryptocurrencies in the financial market.Peabody Energy dropped 7% after Anglo American decided to sell its remaining Australian steelmaking coal mines to the company for up to $3.78 billion in cash. This shows the volatility in the energy sector and the impact of corporate decisions on individual stocks.Retail trading platform Robinhood Markets advanced 3.9% after Morgan Stanley upgraded its stock to “overweight” from “equal-weight”. This highlights the importance of analyst recommendations and their impact on stock prices.