Stocks are under pressure again Tuesday as Federal Reserve chatter continues to point to the likelihood of an interest rate hike sometime later this year.
The market, however, isn’t having it. Futures put the odds of a December rate hike at about even, while the odds of an October hike are at less than 25%.
As a result, the Dow Jones Industrial Average is breaking down out of a multiweek bear-flag pattern, setting the stage for a possible retest of the Aug. 24 “Black Monday” lows.
If so, these 10 Dow Jones stocks will be leading the way down as they suffer, or are on the verge of suffering, breakdowns of their own.
Dow Jones Stocks Breaking Down: American Express (AXP)
Shares of American Express (AXP) have been mired in a long consolidation range going back to February, as the loss of its deal with Costco (COST) has soured sentiment and even resulted in a lawsuit against the company.
A boost in early August was attributed to reports that activist investor ValueAct had taken a stake in the company — but there has been no subsequent follow-up.
Shares look ready to move back down to test support at the $72 level.
Dow Jones Stocks Breaking Down: Apple (AAPL)
Apple (AAPL) really hasn’t gone anywhere since the big Sept. 9 product unveiling that featured the iPhone 6s, the iPad Pro and the new Apple TV.
The company has talked up early pre-order demand for its latest smartphones, but it’s unclear whether that is being artificially boosted by the inclusion of China in the opening sales weekend for the first time.
Shares are at risk of breaking below trendline support on news coverage of a cyberattack on its App Store, which would put an end to AAPL’s rebound
Dow Jones Stocks Breaking Down: Boeing (BA)
Boeing (BA) has been in a persistent downtrend since February and was smashed below its 200-day moving average in late August for the first time since late last year. It has yet to recover.
CEO Dennis Muilenburg said on Tuesday that a $6 trillion aerospace market over the next decade will attract new competitors such as Facebook (FB), Amazon (AMZN), Apple and Google (GOOG, GOOGL).
A break of trendline support looks imminent.
Dow Jones Stocks Breaking Down: Caterpillar (CAT)
Beleaguered heavy equipment maker Caterpillar (CAT) just can’t catch a break, falling below its two-month trading range on Tuesday to continue a selloff that started in the summer of 2014.
And demand remains a problem: Its August dealer statistics show a 11% year-over-year decline led by a 38% drop from the transportation segment.
Dow Jones Stocks Breaking Down: Cisco (CSCO)
Oppenheimer analysts told clients in a note last week that sentiment on Cisco Systems (CSCO) remains moribund as the company tried to shift its business model toward more predictable software and subscription-based revenue streams. But neither have been appreciated yet, and CSCO shares are falling out of their two-month trading range on Tuesday.
Dow Jones Stocks Breaking Down: Goldman Sachs (GS)
Shares of Goldman Sachs (GS) are sliding out of a two-month trading range after CEO Lloyd Blankfein disclosed he is suffering from a treatable form of lymphoma.
Shares are also being hit by a rise in long-term Treasury bonds on Tuesday, which lowers net interest margins. The stock is at critical support from its Aug. 25 closing low.
Dow Jones Stocks Breaking Down: JPMorgan Chase (JPM)
Like Goldman Sachs, shares of JPMorgan Chase (JPM) are under pressure on Tuesday on the decline in long-term Treasury yields pinching net interest margins.
The fear that the Fed will need to hold interest rates lower for longer has been pushing JPM lower since July.
Dow Jones Stocks Breaking Down: 3M (MMM)
Since peaking in late February, 3M (MMM) has been in a persistent downtrend that looked like it was stabilizing over the past two months. But that consolidation range has now been violated, with shares on track to set a new closing low below its Aug. 25 level.
Deutsche Bank recent warned clients that companies like MMM will be challenged in the next year by weakness in China, low oil prices and the stronger dollar.
Dow Jones Stocks Breaking Down: Merck (MRK)
Drugmaker stocks were hit hard on Monday after democratic presidential nominee contender Hillary Clinton tweeted that she was about to unveil a proposal to lower prescription prices.
As a result, Merck (MRK) has been pushed below its Aug. 25 closing low as shares push toward a closing level not seen since early 2014.
Dow Jones Stocks Breaking Down: United Technologies (UTX)
United Technologies (UTX) shares are falling hard on Tuesday, dropping out of a two-month consolidation range to challenge its Aug. 24 intraday lows.
The company suffered a downgrade from Barclays analysts on Aug. 31 citing a lack of solutions to a set of challenging problems set to continue until at least 2017.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
