The Dow Jones Industrial Average rallied late to close higher. Tesla CEO Elon Musk lost a prestigious title. Bitcoin gained but cryptocurrency stocks like Coinbase and Riot Blockchain were mixed after Sam Bankman-Fried was arrested and charged. Moderna rocketed on vaccine news.
Meanwhile, a number of noteworthy stocks attempted breakouts. Illinois Tool Works, Lattice Semiconductor and Calix all tested buy points.
West Texas Intermediate crude rose 3% to trade at more than $75 per barrel. Natural gas also popped 5.9%.
Inflation Data Cools As Crunch Fed Meeting Awaits
Stocks were initially given a big boost after the release of consumer price index data for November.
Prices were up 7.1% year over year. This was lower than October's reading of 7.7% and better than the 7.3% consensus forecast. Core prices, which exclude food and energy, rose 6%, also below October's reading of 6.3% and better than the 6.1% consensus. Core CPI had the smallest monthly increase in over a year.
But enthusiasm cooled off as the morning wore on. Traders seemed to be taking stock of the fact a crunch Federal Reserve meeting started today. The Federal Open Market Committee (FOMC) will announce its latest interest rate move tomorrow, with Fed Chair Jerome Powell giving a news conference afterward.
Oanda senior market analyst Edward Moya said the CPI report supports the idea that the Fed could be done with hiking rates after the February meeting.
"The Fed might not have to take rates to 5% or higher and that is surprising news for stock traders," he said in a note to clients. "Fed tightening is looking like it will just need a half-point increase tomorrow and a 25 (basis point) increase in February. "
Nasdaq, Small Caps Move Higher
The Nasdaq fared best out of the major indexes, rising 1%. Match fared well here with a gain of 7.7%.
The S&P 500 also faded, gaining 0.4%. Halliburton was strong here, rising 7.9%.
The S&P 500 sectors nearly all positive, with energy and real estate faring best. Consumer staples was the only area to close lower.
Small caps fared well, with the Russell 2000 up 0.8%.
The Innovator IBD 50 ETF, a bellwether for growth stocks, rose 0.8%.
Dow Jones Today: Index Rebounds Late As Chevron Shines
The Dow Jones Industrial Average rallied out of the red to close higher. It ended the day up 0.3%.
Chevron fared best on the upside. The oil major rose 2.2%.
The likes of Salesforce and Merck were other top performers.
Amgen and UnitedHealth lagged with dips of 1.6% and 1.4% respectively.
Tesla Stock Tumbles, Elon Musk Loses Title
Tesla's Musk lost his title as the world's richest man as TSLA stock tumbled again Tuesday.
TSLA stock ended the day down 4.1%, about 20% below its 50-day moving average. It is now down almost 60% so far this year.
This was enough to see Musk lose his title as the world's richest man to Bernard Arnault, the Wall Street Journal reported. Arnault is the chair and CEO of LVMH Moët Hennessy Louis Vuitton.
Tesla narrowly avoided closing with a market cap of under $500 billion for the first time since Nov. 23, 2020, according to Dow Jones Market Data. It ended the session with a cap of $504 billion.
It is currently the seventh largest U.S. company by market cap, behind the likes of Apple, Microsoft and Amazon.
Bitcoin Pops After Sam Bankman-Fried Arrest
Bitcoin was gaining a day after FTX founder Sam Bankman-Fried was arrested in the Bahamas.
The former crypto king is accused of eight offenses, including wire fraud and violation of campaign finance laws. He is expected to be extradited to the U.S., though he will reportedly contest automatic extradition.
Bankman-Fried, known as SBF, has previously denied knowingly committing fraud.
Bitcoin was off highs for the day but was up more than 3% vs. 24 hours ago, according to CoinDesk. It was trading just below the $18,000 mark.
Crypto plays were mixed. The Grayscale Bitcoin Trust popped 3.7% while Bitcoin mining play Riot Blockchain reversed 2.4% lower.
Cryptocurrency exchange stock Coinbase plunged 9.1%. It is down nearly 85% so far this year.
Moderna Stock Surges On Cancer Vaccine News
While it is famous for being a Covid vaccine maker, Moderna exploded Tuesday amid promising news on a potential skin cancer vaccine.
The firm announced its experimental melanoma vaccine reduced the risk of skin cancer recurrence by 44% when combined with Merck cancer treatment Keytruda, compared to treatment with Keytruda alone.
Moderna stock closed slightly off highs. Nevertheless, it still ended the session up 19.6%.
MRNA stock closed near the top of its buy zone from a cup-with-handle buy point at 188.75, according to MarketSmith analysis.
Merck stock made a more modest gain of 1.8%.
Airline Stocks Struggle
Airline stocks were having a tough session overall. They were hit after JetBlue Airways warned that demand appears to be pacing below expectations this month.
It is a sign consumer travel spending may be fading following a strong summer. Jetblue stock closed the day down 7.7%
Other stocks fell in sympathy. United Airlines was given the boot from Leaderboard after it dived 6.9%.
UAL stock triggered the 7% sell rule from a 45.67 entry in the process.
Delta Air Lines was down 4% while American Airlines crumbled 5.2%.
Fed On Tap After Rally Fades; Tesla Dives As Elon Musk Admits This
Outside Dow Jones: These 3 Stocks Test Entries
Illinois Tool Works closed below its entry after testing a cup-with-handle buy point of 230.86.
The industrial machinery stock is in the top 15% of stocks in terms of price performance over the past 12 months.
Lattice Semiconductor ended the day in a buy zone after clearing a cup-with-handle entry of 73.63. The relative strength line hit fresh highs, a good sign.
Strong performance won Lattice stock a place on the Leaderboard Watchlist. The Hillsboro, Ore., designer of programmable gate arrays focuses on four key markets: data center, computing, automotive and industrial.
Computer networking play Calix is trading just below a 75.56 buy point it crossed earlier today.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
