Dow Jones Futures Fall As Market Correction Shows No Mercy; Fed

Dow Jones futures fell Monday morning, along with S&P 500 futures and Nasdaq futures, heading into a massive week of earnings from Apple to Tesla as well as a key Federal Reserve meeting.

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The stock market correction took a firm hold last week, with the major indexes suffering sharp losses and breaking several key support levels. Even sectors of strength, notably financials, came under heavy pressure. So far bulls have made only momentary charges, with investors quick to sell rebounds instead of buying the dip. It’s a time to be heavily defensive.

Tesla stock and Dow Jones giants Apple (AAPL), Microsoft (MSFT) and Caterpillar (CAT) are on tap this week, along with dozens of other quality companies. But the main event will likely be the Federal Reserve meeting on Jan. 25-26.

The Fed meeting announcement Wednesday afternoon and Fed chief Jerome Powell’s news conference could set the tone for the stock market and Treasury yields for weeks to come. The Fed is expected to continue its accelerated bond taper, staying on track to end asset purchases by mid-March.

But the real issue is what happens next. Fed chief Powell will likely offer commentary on the timing and pace of interest rate hikes and balance sheet reductions. Talk of reducing the balance sheet, and at a fast clip, has been a big reason why the 10-year Treasury yield has spiked and the stock market has entered a correction.

Tesla (TSLA) and Microsoft stock are on IBD Leaderboard. MSFT stock is on the IBD Long-Term Leaders list. Tesla stock is on the IBD 50 list.

The video embedded in this article discusses the market correction in depth, while also analyzing Apple stock, UnitedHealth (UNH) and J.B. Hunt Transportation Services (JBHT).

Dow Jones Futures Today

Dow Jones futures fell 0.3% vs. fair value. S&P 500 futures sank 0.5% and Nasdaq 100 futures lost 0.8%. All were solidly higher Sunday night and are still in flux.

The 10-year Treasury yield fell 1 basis point to 1.74% after rising slightly Sunday night. Short-term Treasury yields rose, meaning the yield cure continues to flatten.

U.S. crude oil futures were little changed after backing off multiyear highs late last week. Fears of a Russian invasion into more of Ukraine loom large for energy markets and markets generally.

Bitcoin continued to sell off along with other cryptocurrencies over the weekend, trading below $34,000 after breaking under $40,000 on Friday. It peaked at $68,990.90 in early November.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. That’s been in true in the past several sessions, when Dow Jones futures have pointed to sold opens, only for the major indexes to close sharply lower.

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

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