S&P 500 Undercuts Bear Market Low As Treasury Yields Race Toward Key Level; What

Dow Jones futures turned lower overnight, along with S&P 500 futures and Nasdaq futures. The stock market saw another opening rebound fizzle Tuesday as the 10-year Treasury yield surged toward 4%. The S&P 500 index tumbled to a bear market low, but the major indexes rallied to close mixed.

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Investors should be extremely cautious about making any moves, even when quality stocks show bullish action.

On Tuesday, Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) briefly flashed what would have been aggressive buy signals in a decent market. But they backed off from early highs as the indexes reversed. Enphase Energy (ENPH), a day after a downside reversal, reclaimed key support even after paring intraday gains. Tesla (TSLA) and Shockwave Medical (SWAV) hit resistance at their 50-day lines.

Meanwhile, lawyers for Tesla CEO Elon Musk and Twitter (TWTR) faced off Tuesday in another preliminary court hearing ahead of their October takeover trial. Musk is trying to get out of his $44 billion, $54.20-a-share takeover deal to buy Twitter. Legal experts say Twitter has a strong case to make Musk go through with the deal, and Tuesday’s hearing appeared to reinforce that.

Twitter stock rose 1.4% to 42.11 on Tuesday. TWTR climbed modestly in late trading as the hearing continued.

After the close, egg giant Cal-Maine Foods (CALM) reported stronger-than-expected earnings. Cal-Maine earnings shot up as revenue growth accelerated for a fifth straight quarter, to 103%. CALM stock edged lower overnight. Shares rose 1.4% to 60.53 on Tuesday, at the edge of a buy zone.

ENPH stock and Vertex are on the IBD 50 and the IBD Big Cap 20. The video embedded in this article discusses Tuesday’s bear market action and analyzes Vertex, WWE and SWAV stock.

Dow Jones Futures Today

Dow Jones futures fell 0.3% vs. fair value, reversing from slight gains earlier Tuesday night. S&P 500 futures retreated 0.35%. Nasdaq 100 futures sank 0.4%.

The 10-year Treasury yield edged up 1 basis point to 3.97%.

Crude oil futures fell slightly.

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 Tuesday

The stock market once again tried to bounce near the open, with stronger, broader gains Tuesday morning than on Monday. But as the 10-year Treasury yield soared to a fresh 12-year high, fueled by a number of stronger-than-expected economic reports at 10 a.m. ET, the major indexes reversed lower, with the S&P 500 breaking below its June lows. However, the indexes rallied to finish narrowly mixed.

The Dow Jones Industrial Average fell 0.4% in Tuesday’s stock market trading. The S&P 500 index lost 0.2%. The Nasdaq composite climbed 0.25%. The small-cap Russell 2000 climbed 0.3%.

The 10-year Treasury yield leapt 9 basis points to 3.96%, hitting 3.99% intraday. The 10-year yield hasn’t topped 4% since April 2010. The two-year Treasury yield is at 4.3%, edging lower on the session.

The 30-year U.K. gilt yield hit 5% on Tuesday. The new U.K. government plans to borrow…