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Wall Street Wobbles on Second Day of Trading, Eyes on Fed Minutes

Major indexes pulled back on Wednesday, the second trading day of the year, as investors awaited the release of the Federal Reserve’s December meeting minutes later in the afternoon. The Dow Jones Industrial Average fell 0.4%, while the S&P 500 and Nasdaq declined 0.5% and 0.8%, respectively.

Market Movers:

  • Tech Tumble: Technology stocks led the decline, with the Nasdaq lagging behind other indexes. The Innovator IBD 50 ETF (FFTY) fell 2.1%, while Tesla (TSLA) dropped over 3%, despite exceeding its 2023 delivery goals.
  • Healthcare Holds Up: Healthcare stocks bucked the trend, with Eli Lilly (LLY), Cardinal Health (CAH), and McKesson (MCK) all making gains. Vertex Pharmaceuticals (VRTX) even broke out of a buy zone.
  • Fed in Focus: The minutes from the Fed’s December meeting are due at 2 p.m. ET and will be closely scrutinized for clues about the central bank’s future policy plans. A majority of traders expect rates to remain unchanged in January but see a 67.2% chance of a cut in March.

Stocks to Watch:

  • Nvidia (NVDA): The chipmaker held above its 50-day moving average despite early weakness, suggesting potential support at this level.
  • Tesla (TSLA): The electric vehicle maker remains just above its 50-day line, but continued selling pressure could push it below this key level.
  • Alphabet (GOOGL): Google’s parent company is nearing a buy point after rebounding from its 50-day line.
  • Meta Platforms (META): Facebook’s parent company faces a potential third test of its 50-day line after a failed breakout attempt in October.
  • Amazon (AMZN): The e-commerce giant pulled back into a buy zone but remains above its key support level.

While Wall Street wobbled yesterday, several tech giants showed resilience that could offer savvy investors buying opportunities. Here’s a closer look:

Nvidia (NVDA): This chipmaker defied early weakness, clinging to its 50-day moving average like a determined climber. This crucial support level suggests a potential buying zone could be forming. If you’re bullish on AI and gaming trends, NVDA might be worth a closer look.

Alphabet (GOOGL): Google’s parent company is warming up nicely, approaching a buy point after bouncing off its 50-day line. With its dominant search engine and cloud computing arm, GOOGL remains a powerhouse with long-term growth potential. If it breaks through that buy point, it could be fuel for the rocket ship.

Amazon (AMZN): The e-commerce giant took a breather, dipping back into its buy zone. This provides a second chance for investors who missed the initial entry point. Don’t underestimate the power of online shopping and cloud dominance – AMZN could be a steady climber in the long run.

Hold Your Horses on These Two:

Tesla (TSLA): While the electric vehicle leader remains precariously perched above its 50-day line, continued selling pressure could send it tumbling. Wait for a more definitive signal before diving in.

Meta Platforms (META): Facebook’s parent company faces a potential third test of its 50-day resistance, which it previously failed to breach. Until it shows consistent strength above this level, consider waiting on the sidelines.

Remember, these are just potential opportunities, and thorough research is crucial before making any investment decisions. Consider your risk tolerance and investment goals before taking the plunge. But for those seeking tech exposure with potentially strong support levels, these names could be worth watching closely.

Overall Sentiment:

While Wednesday’s decline wasn’t dramatic, it indicates growing investor nervousness ahead of the Fed minutes. The direction of the market in the coming days could hinge on the central bank’s signals and their impact on economic expectations.

For investors:

  • Keep an eye on the Fed minutes and reaction in the market.
  • Look for stocks holding support levels or offering buy zone opportunities.
  • Be cautious about chasing falling stocks, especially in volatile sectors like technology.

Shayne Heffernan

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