Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, rebounded after Monday's stock market rout, as the Cboe Volatility Index — also known as the VIX and the fear index — soared to its highest level since March 2020. Magnificent Seven stocks Apple, Nvidia and Tesla plunged Monday, while Palantir Technologies surged on earnings after the close.
Artificial intelligence leader Palantir vaulted 13% in extended trading after the company reported strong Q2 earnings results and raised its full-year revenue outlook.
Other key earnings movers early Tuesday include Diamondback Energy, Hims & Hers Health and Lucid Motors.
Diamondback shares gained 0.8%, while Hims & Hers erased heavy losses to inch higher in after-hours trading. Finally, Lucid stock raced up 6%.
Financial markets are suddenly pricing in a strong likelihood of 1.25 percentage points in Federal Reserve rate cuts by the end of the year. Just a week ago, markets saw a 0.2% chance of such an outcome. In short, markets have gone haywire almost overnight, prompted by five developments that together have triggered a massive liquidity squeeze, though one that will likely fade.
On Monday, the VIX spiked from around 23 to above 65, reflective of extreme fear, before pulling back below 39. This Cboe index can offer a hedge against sudden market downturns. However, if investors are positioned for continued low volatility, as has been the case, the reversal can be even more jarring.
This is the highest the VIX has been since March 2020, shortly after the Fed's emergency actions during the Covid-19 pandemic, according to FactSet.
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Stock Market Today
On Monday, the Dow Jones Industrial Average moved down 2.6%, while the S&P 500 lost 3%. The tech-heavy Nasdaq composite declined 3.4%.
Among the best companies to watch on the stock market today are Ferrari, MercadoLibre, ServiceNow and Shake Shack.
Also on the list are Dow Jones components Amazon, Amgen, Apple, IBM and Microsoft.
Amgen and Ferrari are featured in this Stocks Near A Buy Zone column.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Tuesday's opening bell, Dow Jones futures rose 0.7% vs. fair value, and S&P 500 futures gained 0.9%. Tech-heavy Nasdaq 100 futures rebounded 1% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
On Monday, the 10-year U.S. Treasury yield tumbled to 3.78%. And oil prices rose modestly, as West Texas intermediate futures settled around $73.90 a barrel.
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What To Do Now
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market action. Following Monday's session, be sure to check out today's The Big Picture and today's updated exposure level.
On Monday's "IBD Live" show, the team discussed current trading conditions amid the recent stock market sell-off.
An essential resource for daily breakouts is IBD MarketSurge's "Breaking Out Today" list. It shows MarketSurge Growth 250 stocks that are breaking out past buy points. Meanwhile, the MarketSurge "Near Pivot" list shows more stocks nearing buy points in bases.
To find more stock ideas, check IBD Stock Lists like IBD 50, Big Cap 20 and Stocks Near A Buy Zone. These features identify bullish patterns and buy points and are available to check every day.
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Dow Jones Stocks: Amgen, IBM
Among Dow Jones components, biotech giant Amgen is in buy range above a cup-with-handle base's 322.60 entry, according to MarketSurge pattern recognition. Earnings are due late Tuesday. Meanwhile, IBM staged a breakout in recent weeks following the company's earnings report. Shares are below a 189.47 cup-with-handle entry following recent losses.
Outside the Dow Jones index, automaker Ferrari is close to a 442.80 buy point in a flat base, bullishly regaining their 50-day line last week. MercadoLibre is attempting a breakout past a 1,792.05 buy point in a cup with handle, as shares inched lower Monday.
ServiceNow is below an 806.52 handle entry following a three-day losing streak. And Shake Shack, which soared last week on earnings, gave up gains Monday as it builds the right side of a cup base that has a 111.29 buy point.
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Stock Market Today: Companies To Watch
These are four stocks in or near buy zones in today's stock market.
| Company | Symbol | Buy point | Type of buy point |
|---|---|---|---|
| MercadoLibre | 1,792.05 | Cup with handle | |
| Shake Shack | 111.29 | Cup base | |
| ServiceNow | 806.52 | Handle entry | |
| Spotify | 331.08 | Flat base |
Source: IBD Data as of Aug. 5
Magnificent Seven Stocks: Nvidia And Tesla
Among Magnificent Seven stocks, Nvidia and Tesla ended with sharp losses Monday.
Nvidia, an IBD Leaderboard stock, plunged 6.4% Monday, further below its 50-day line and hitting its lowest level since mid-May. Shares bounced 3.1% late Monday.
Tesla stock skidded 4.2% Monday, breaking down through the 50- and 200-day lines. The EV giant moved up 3.2% in extended trading Monday.
Dow Jones Leaders: Amazon, Apple And Microsoft
Among Dow Jones stocks in the Magnificent Seven, Amazon, Apple and Microsoft tumbled Monday.
Amazon shares declined 4.1%, giving up their long-term 200-day line.
On Monday, Apple stock sold off 4.8%, triggering the round-trip sell rule from a 199.62 buy point. Shares closed below their 50-day line.
Microsoft shares lost 3.3% Monday, falling below their 200-day line for the first time since March 2023.
Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
