Dow Jones Futures: Market Rally Skids On This Powell Comment, Omicron

Dow Jones futures, S&P 500 futures and Nasdaq futures rose modestly Tuesday night, with Salesforce and Zscaler having reported and several Tesla EV rivals on tap for tomorrow. The stock market rally retreated in Tuesday’s regular session as Fed chief Jerome Powell said he’s open to a faster bond taper at the December Fed meeting. Earlier, Moderna (MRNA) said existing vaccines may be significantly less effective vs. the omicron Covid variant.

Apple stock was a rare bright spot in Tuesday’s trading, with Apple (AAPL) iPhone sales reportedly booming in China. The major indexes also did close off lows somewhat.

Zscaler (ZS) and Salesforce.com (CRM) reported after the close. Chip foundry giant Global Foundries (GFS) and vision-chip maker Ambarella (AMBA) also released results, along with NetApp (NTAP).

Zscaler stock popped in extended trade, while Ambarella soared. NTAP stock edged higher. Global Foundries stock was up and down. CRM stock skidded in late trade.

Early Wednesday, China EV startups Xpeng (XPEV), Li Auto (LI) and Nio (NIO) will likely release November deliveries, with expectations for solid gains as chip shortages start to ease for the industry. China EV giant BYD Co. (BYDDF) should follow in a few days, with Tesla (TSLA) China sales and exports likely due in a week or two.

Tesla stock is on IBD Leaderboard. ZS stock, Xpeng and Tesla are on the IBD 50.

The video embedded in this article discussed the market action and analyzed Apple stock, Pfizer (PFE) and Fox Factory (FOXF).

Fed Chief Powell

Powell, speaking before a Senate panel on Tuesday morning, said policymakers will likely discuss scaling back asset purchases even faster to combat inflation at the Dec. 14-15 meeting.

“The economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner,” Powell said. “I expect that we will discuss that at our upcoming meeting.”

The Fed chief also said it may be time to “retire” describing inflation as “transitory,” as the central bank now sees price pressures as staying elevated for a much longer time.

Powell acknowledged that the omicron Covid variant hasn’t been factored in, but said it creates increased “uncertainty” for inflation. He may just be preserving flexibility. If the omicron variant is seen as no big deal by the mid-December Fed meeting, policymakers may want to go ahead with a faster bond taper.

Dow Jones Futures Today

Dow Jones futures advanced 0.3% vs. fair value, with CRM stock weighing on blue-chip futures. S&P 500 futures rose 0.45%. Nasdaq 100 futures climbed 0.6%.

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

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