Dow Jones Futures: Market Rallies On Powell Comments; Apple, Nvidia, Tesla In

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures, ahead of a key inflation report. Biogen (BIIB) dived late as Medicare restricted coverage of its Alzheimer’s drug.

X

The stock market rally extended a rebound Tuesday and crude oil prices jumped as Fed chief Jerome Powell eased fears that the central bank will be overly aggressive on reducing its massive balance sheet.

Advanced Micro Devices (AMD) and Nvidia stock rallied Tuesday, and investors could see the makings of double-bottom bases. But trying to guess the (double) bottom on a stock is fraught with peril. Tesla (TSLA) has a new buy point, while Apple (AAPL) is rebounding bullishly from a key level. Meanwhile, Zim Integrated Shipping (ZIM) broke out.

Tesla stock and Nvidia (NVDA) are on IBD Leaderboard. Tesla and ZIM stock are on the IBD 50. Zim Integrated Shipping was Tuesday’s IBD Stock Of The Day.

Meanwhile, Medicare plans coverage limits on the pricey and controversial Biogen (BIIB) Alzheimer’s drug. It’ll only pay for Aduhelm for Medicare patients in clinical trials. Biogen stock plunged. Eli Lilly (LLY), which is working on a similar Alzheimer’s drug, fell modestly.

Fed Chief Powell

Fed chief  Powell testified Tuesday at a Senate Banking confirmation hearing for a second term. He assured lawmakers that the Federal Reserve will bring inflation under control.

Powell said the need for aggressive monetary stimulus is over, adding that the Federal Reserve may see some balance sheet runoff in 2022, after asset purchases go to zero in mid-March. That appeared less hawkish than at least some of his colleagues. As revealed in last week’s release of Fed minutes, several policymakers at the December meeting spoke in favor of cutting the balance sheet soon after the first Fed rate hike, which could happen as early as March. Some also suggested they wanted to pare back the balance sheet aggressively.

Inflation Report

The Labor Department’s December consumer price index is due out at 8:30 a.m. ET on Wednesday. Economists expect the CPI to show a 0.4% gain, or 0.5% excluding food and energy. Overall consumer inflation is seen rising to a fresh long-term high of 7.1% from November’s 6.8%. Core inflation is forecast to hit 5.5%, up from 4.9%.

On Thursday, the Labor Department will release the producer price index.

Dow Jones Futures Today

Dow Jones futures edged higher vs. fair value. S&P 500 futures and Nasdaq 100 futures were little changed.

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

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

Stock Market Rally

The stock market rally had a solid session as investors appeared to appreciate Fed chief Powell’s comments. Growth stocks, among the hardest hit in 2022, led the bounce.

The Dow Jones Industrial Average rose 0.5% in Tuesday’s stock market trading, with gains muted as investors sold some defensive blue-chip names. The S&P 500 index climbed 0.9%. The Nasdaq composite jumped 1.4%. The small-cap Russell 2000 advanced 1%.

The 10-year Treasury yield…