Dow Jones futures were higher ahead of Tuesday's open, as JPMorgan Chase and other big banks made new efforts to stabilize troubled First Republic Bank. FRC stock crashed 47% Monday, hitting a new low.
JPMorgan's discussions, while preliminary, have focused on how the financial industry could arrange for an investment that would boost the bank's capital. Among the options on the table, the people said, is an investment in First Republic by the banks themselves.
The SPDR S&P Regional Bank ETF rose 1.1%. Western Alliance sold off nearly 7%, while KeyCorp was up 1.2%.
Fed Meeting, Earnings Results
The Federal Reserve's two-day meeting kicks off Tuesday, and the central bank may have a hard time hiking its key interest rate on Wednesday after the weekend passed with rescue attempts for several U.S. regional and community banks still faltering.
As of Monday, markets were pricing in 71% odds of a quarter-point rate hike at the conclusion of Wednesday's Federal Reserve meeting. That would lift the Fed's key interest rate to a range of 4.75% to 5%. Odds of a Fed rate-hike pause slipped to 28% from 38% on Friday.
Still, Goldman Sachs economists are sticking by their prediction that the Fed will pause rate hikes "because of stress in the banking system."
Whatever happens this week, markets see rate cuts starting this summer and solid odds of a sub-4% federal funds rate by the end of 2023.
Key earnings results this week include GameStop, General Mills, KB Home, On and Nike.
Stock Market Today
On Monday, the Dow Jones Industrial Average rallied 1.2%, and the S&P 500 gained 0.9%. The tech-heavy Nasdaq composite rose 0.4% in a day of volatile trading.
Electric-vehicle giant Tesla traded up 1.7% Monday. Among Dow Jones stocks, Apple rose 1.55% and Microsoft faltered 2.6% in today's stock market action.
Chip leader Advanced Micro Devices, IBD SwingTrader stock Meta Platforms and IBD Leaderboard stock Palo Alto Networks — as well as Dow Jones stocks Nike and Salesforce — are among the top stocks to watch in the ongoing stock market correction.
Palo Alto is an IBD Leaderboard stock. Meta is an IBD SwingTrader stock. And Microsoft was featured in this week's Stocks Near A Buy Zone column.
3 Top Growth Stocks To Buy And Watch In The Current Stock Market Correction
Dow Jones Futures Today: Oil Prices, Treasury Yields
Ahead of Tuesday's opening bell, Dow Jones futures rose 0.9% vs. fair value, and S&P 500 futures were up 0.8%. Nasdaq 100 futures rose 0.6% vs. fair value in morning action. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
The 10-year U.S. Treasury yield rose to 3.48% Monday, as the banking crisis continues. Oil prices rebounded more than 1% Monday after last week's big losses. West Texas Intermediate futures traded below $68 a barrel.
What To Do In The Ongoing Stock Market Correction
Now is an important time to read IBD's The Big Picture column with the stock market trend back in a "market in correction" after sharp losses in recent sessions.
With the market in correction, investors should mostly, if not entirely, be on the sidelines until a follow-through day triggers a new uptrend. Now is a good time to build a robust watchlist of actionable stocks in leading groups.
(Check out IBD Stock Lists like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.)
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Nike, Salesforce
Since bottoming on Oct. 3, Nike shares have rallied as much as 59% to their recent high at 131.31. Now the stock is consolidating within a flat base that offers a 131.41 buy point, according to IBD MarketSmith pattern recognition.
Amid recent gains, Nike stock faces a crucial test of the 50-day moving average, a key level to watch. A decisive retake would be bullish for base-building prospects, carving the right side of the pattern. The relative strength line is also holding up well during the rapidly-developing stock market correction.
In recent weeks, Dow Jones leader Salesforce showed big upside strength after strong fourth-quarter results. The stock is above a 178.94 cup-with-handle entry after last week's big gains. Still, the market is in a correction, so investors should avoid new purchases until the market environment improves.
Top Stocks To Watch: AMD, Meta, Palo Alto
Advanced Micro Devices broke out past an 89.04 buy point in a flat base last week, and remains out of buy range despite a 1.05% loss Monday. The 5% buy range topped out at 93.49. AMD was featured in Wednesday's IBD Screen Of The Day column.
Back story: In early February, the chipmaker reported stronger-than-expected data center chip sales in the fourth quarter. But AMD tempered that news with a soft outlook for the current period.
Facebook-parent Meta Platforms reclaimed a flat base's 197.26 buy point during Monday's 1.1% gain. Still, last week's breakout attempt was a sign of strength within the general market's weakness. Meta shares were up 0.25% Monday morning.
Back story: Like social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as clients squirm over macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions of dollars on a risky bet to build the "metaverse," a virtual reality world that has yet to take hold.
IBD Leaderboard stock Palo Alto Networks is trading just short of a cup-with-handle's 192.94 buy point after Monday's 0.2% rise. The relative strength line is at new highs.
Back story: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla Stock
Tesla stock climbed 1.7% Monday, as it continues see some support around its 50-day moving average line. Shares closed Monday around 52% off their 52-week high.
On Tuesday, weekly China EV insurance registration data could be an important gauge for Tesla demand in the world's largest EV market, which is in the midst of a huge price war started by Tesla.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.55% Monday, rebounding from Friday's losses. Shares closed at their highest level since Sept. 12.
Microsoft shares broke out above a flat base's 276.86 buy point Friday. But the stock gave up that entry during Monday's 2.6% decline.
