Futures Fall Ahead Of Fed Meeting, Big Earnings

Amid widespread risk aversion, Dow Jones futures fell on Monday morning, along with S&P 500 futures and Nasdaq futures, signaling a pullback following big gains in the latest trading sessions. The stock market rally cleared some major resistance last week. The major indexes had solid gains, responding bullishly to uneven earnings reports and economic data. Leading stocks acted well, with breakouts and buy points continuing to work.

Since the January 6 follow-through day, the market rally has shown robust gains. In fact, the advance suggests this uptrend could be a “moneymaker” or even a “life-changing” rally, according to one noted growth investor.

Investors should be taking advantage of the opportunities. But do so carefully. The market rally is around key levels, while it’s another big week for news. Apple, Google parent Alphabet, Amazon.com, Facebook parent Meta Platforms are all on tap, as well as hundreds of other companies.

Apple stock and these other tech titans are rebounding strongly, but have a lot of repair work. Still, their earnings and guidance will be key for the market rally as well as many other tech stocks.

The Fed holds its policy meeting this week, with another rate hike expected on February 1. The big question is when Fed chief Jerome Powell and his colleagues call a halt to further rate increases.

Tesla skyrocketed on mixed earnings as CEO Elon Musk was bullish about the future. TSLA stock soared from its Jan. 6 bear market low, but isn’t yet offering a buy point. Meanwhile, Tesla archrival BYD, Snowflake, Shift4Payments and Etsy are four aggressive stocks in or near potential buy areas. But handle them with care.

Hong Kong’s Hang Seng index tumbled 2.7% on Monday after a strong start to 2023. Many U.S.-listed Chinese companies tumbled before the open, including Alibaba. But Baidu surged amid reports that it will soon launch an AI chatbot like OpenAI’s ChatGPT.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session. The stock market rally had strong gains across the board last week.

The Dow Jones Industrial Average climbed 1.8% in last week’s stock market trading. The S&P 500 index jumped 2.5%. The Nasdaq composite leapt 4.3%. The small-cap Russell 2000 surged 2.4%.