Dow falls 200 points as Powell says rates are headed higher than expected: Live updates

Stocks slid Tuesday after comments from Federal Reserve Chair Jerome Powell indicated that rates will likely remain elevated for longer.

The Dow Jones Industrial Average was last down 196 points, or 0.6%, while the S&P 500 traded 0.8% lower The Nasdaq Composite shed 0.9%.

— Samantha Subin

The stock market bounced upward off of some key technical indicators last week, but investors shouldn’t fully buy into a new rally just yet, according to Art Cashin of UBS.

Cashin said on CNBC’s “Squawk on the Street” that Salesforce’s strong quarterly report last week muddied the waters for technical traders, meaning that market passing the technical test may have been “accidental.”

The S&P 500, which was trading just below 4,050 after the market open on Tuesday, needs to take another leg higher to reinforce last week’s move, Cashin said.

“You’ve got to get up above 4,085 to get some credibility,” Cashin said.

— Jesse Pound

Stocks opened flat on Tuesday as Wall Street awaited Federal Reserve Chari Jerome Powell’s testimony.

The Dow Jones Industrial Average traded flat, while the S&P 500 dipped 0.06%. The Nasdaq Composite inched 0.04% higher.

— Samantha Subin

Worn down by months of higher prices, consumers are shying away from buying discretionary items, said Northcoast analyst Chuck Cerankosky. Sounds bad, but he says Costco has been here before.

“At these times, its strong value proposition in consumables — from food to pharmacy and [health & beauty care] to household supplies to gasoline — not only allows it to retain its many loyal members, but attract new ones,” he wrote in a research note.

Cerankosky sees Costco shares rallying nearly 16% from Monday’s close as it starts to grab market share from competitors. His prediction is higher than Wall Street’s average price target of $544.97, according to FactSet.

In addition to stock price acceleration, there could also be a special dividend ahead and possibly a pick-up in the pace of stock buybacks, he said. And that’s all before, Costco makes an expected hike in membership fees, which isn’t baked into his analysis yet.

— Christina Cheddar Berk

Here are some of the names making the biggest moves in the premarket:

To see more companies making moves in the premarket, read the full story here.

— Michelle Fox

Joby Aviation may have risks that investors are overlooking, Deutsche Bank warned.

The company, known for its electric aircrafts, got downgraded to sell from hold by analyst Edison Yu. Yu also cut his price target by $2 to $4, meaning he thinks the stock could fall by 11.1% over the next year.

The stock fell more than 3% in premarket trading.

His downgrade comes amid concerns that the company may be making its aircrafts too heavy. The company also pushed back its approval timeline.

“Operationally, despite Joby being perceived as the leader in the industry, the developmental path of its [electric vertical takeoff and landing] aircraft seems increasingly challenging to us as we think the aircraft is dealing with weight management issues,” Yu said in a Tuesday note to clients.

CNBC Pro subscribers can read the full story here.

Goldman Sachs initiated Juniper Networks with a buy and a price target that implies upside of nearly 25% from Monday’s close.

“We expect core underlying demand for JNPR products to be supported by secular trends (e.g., 400G, metro, software-based management platforms) and a re-focused enterprise strategy, though we recognize that tough comps & macro-driven budget scrutiny will be headwinds in the near term,” Analyst Michael Ng said in a note to clients.

— Alex Harring

Shares of Dick’s Sporting Goods jumped more than 5% before the bell after the company posted a strong holiday quarter that included better-than-expected same-store sales.

The sporting goods retailer said same-store sales grew 5.3% during the period, more than double Wall Street’s estimate of 2.1%, according to StreetAccount.

Dick’s Sporting Goods also posted a beat on the top and bottom lines, or adjusted earnings of $2.93 a share on revenues of $3.60 billion.

Guidance for 2023 came in above expectations, with management saying it now expects full-year EPS to range between $12.90 and $13.80. Analysts polled by Refinitiv had anticipated fiscal 2023 EPS of $12.

— Samantha Subin, Rebecca Picciotto

Meta is planning another round of layoffs that could affect thousands of workers as soon as this week, according to a Bloomberg News report published Monday evening.

The job cuts come after the company laid off 13% of its workforce in November as part of a major cost-cutting plan. CEO Mark Zuckerberg previously told investors that 2023 would be the “year of efficiency” for the company. 

Meta shares gained 1.5% during premarket trading on Tuesday following the news. 

— Hakyung Kim

Adam Crisafulli of Vital Knowledge highlighted several pieces of “dovish news” to start the day.

“To start, the RBA delivered a ‘dovish hike’, signaling that this 25bp rate increase may be its final one of the cycle. Meanwhile, CPIs from Taiwan, Thailand, and the Philippines all undershot the St, while Japan’s wage data also came in below plan. The latest ECB survey revealed a drop in inflation expectations,” Crisafulli said.

Still, the “big focus today will be on Powell’s testimony at 10amET before the Senate. … Our bottom line: Powell’s bar to sound “less hawkish than feared” is low.”

— Fred Imbert, Michael Bloom

European markets are heading for a mixed open Tuesday.

The U.K.’s FTSE 100 index is expected to open 19 points higher at 7,945, Germany’s DAX 20 points higher at 15,669, France’s CAC up 10 points at 7,383 and Italy’s FTSE MIB down 16 points at 27,953, according to data from IG.

Data releases include Irish inflation data for February, while earnings come from Greggs, Reach, Man Utd, Nielsen, Zalando, Schaeffler, Henkel, and Lego and HelloFresh.

— Holly Ellyatt

Paul Hickey, co-founder of Bespoke Investment Group, said the strength of the small-cap stocks is a sign of market resilience despite the uncertainty of the Federal Reserve’s tightening path. The Russell 2000 index is up nearly 8% this year, outperforming the S&P 500‘s 5.4% gain.

“There was some really strong underlying resiliency in the market in the face of tightening financial conditions,” Hickey said on CNBC’s “Closing Bell Overtime” Monday.

— Yun Li

The January wholesale inventories data is set to release Tuesday after the opening bell, giving investors insight into the consumer economy. Economists polled by Dow Jones expect a decline of 0.4%, compared to a rise of 0.1% in the prior reading.

Consumer credit data expected Tuesday afternoon is forecasted to show a rise of $22 billion in January, according to consensus estimates from Dow Jones. That would follow a $11.6 billion increase the prior month.

— Sarah Min

WW International shares jumped more than 10% in extended trading.

The firm, which is also known as WeightWatchers, said it’s acquiring Sequence, a subscription telehealth platform with a focus on chronic weight management, for a net purchase price of $106 million. The deal is expected to close during the second quarter of 2023.

Separately, WW International announced its fourth-quarter and full-year results.

U.S. stock futures were little changed on Monday night as traders await Federal Reserve Chair Jerome Powell’s latest comments on the state of the economy.

Dow Jones Industrial Average futures fell by 2 points, or 0.01%. Futures tied to the S&P 500 and Nasdaq 100 dipped 0.01% and 0.06%, respectively.

— Sarah Min