Dow Jones Dives On Fear Of More Rate Hikes Into 2023; Tesla Stock Plunges

Dow Jones futures were higher ahead of Tuesday’s open after the Dow Jones Industrial Average sold off more than 480 points Monday. Tesla stock dived after multiple reports said Tesla is planning to cut its EV production in China, as demand seems to be faltering.

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The EV giant refuted the reports, calling the claims that it’s cutting its China production untrue. Still, investors left the stock down more than 6% and near the day’s lows.

More Fed Rate Hikes Into 2023?

The stock market headed south Monday, as stronger-than-expected economic data sparked fears that the Federal Reserve will continue to aggressively raise interest rates into next year due to a strong labor market. Early Monday, the ISM services report came in better than expected, with a 56.5 reading in November vs. a 54.4 in October. The ISM services is a barometer of U.S. business conditions in the service sector; a reading above 50 indicates expansion and a sub-50 reading is contraction.

Monday’s economic data came directly on the heels of Friday’s strong jobs report that showed employers added 263,000 payroll positions while the unemployment rate held at 3.7% and wages jumped.

According to Nick Timiraos at the Wall Street Journal, “Federal Reserve officials have signaled plans to raise their benchmark interest rate by 0.5 percentage points at their meeting next week, but elevated wage pressures could lead them to continue lifting it to higher levels than investors currently expect.”

Timiraos continued, “policymakers expect price pressures to ease meaningfully next year, but brisk wage growth or higher inflation in labor-intensive service sectors of the economy could lead more of them to support raising their benchmark rate next year above the 5% currently anticipated by investors.”

The 10-year Treasury yield jumped to 3.59% Monday, rebounding from last week’s sharp losses.

Earnings reports this week include Academy Sports + Outdoors (ASO), AutoZone (AZO), Broadcom (AVGO), Ciena (CIEN), Lululemon Athletica (LULU), Ollie’s Bargain Outlet (OLLI) and Toll Brothers (TOL).

Stock Market Today

On Monday, the Dow Jones Industrial Average lost 1.4%, or 482 points, and the S&P 500 dropped 1.8%. The tech-heavy Nasdaq composite sold off 1.9%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 1.7% and the SPDR S&P 500 (SPY) fell 1.8%.

Electric vehicle giant Tesla (TSLA) traded down 6.4% Monday. Among Dow Jones stocks, Apple (AAPL) declined 0.8% and Microsoft (MSFT) dropped 1.2% in today’s stock market.

Celsius (CELH), Chubb (CB), Dexcom (DXCM) and KLA (KLAC)— as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Home Depot (HD) — are among the top stocks to buy and watch.

Dexcom is an IBD Leaderboard stock. Caterpillar and Home Depot were featured in this week’s Stocks Near A Buy Zone column. Celsius was a recent IBD 50 Stocks To Watch pick and a New America stock. Caterpillar was Thursday’s Stock Of The Day.

4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally

Dow Jones Futures Today: Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures rose 0.2% vs. fair value, while S&P 500 futures gained 0.25%….