Dow Jones Falls As Treasury Yields, Oil Prices Tumble On Recession Fears

The Dow Jones Industrial Average dropped Tuesday morning, as both the 10-year Treasury yield and U.S. oil prices tumbled on rising recession fears. Currencies were also active, with the euro briefly dipping its closest to parity with the U.S. dollar since 2002.

Soda giant PepsiCo (PEP) reported better-than-expected second-quarter results early Tuesday. The company also raised its revenue outlook for the year. PepsiCo shares added 0.5% in morning trade.

American Express (AXP) dropped more than 2%, weighing heavy on the Dow following an analyst downgrade. Retailer Gap (GPS) shed 7%, as chief executive Sonia Syngal suddenly stepped down, and Wells Fargo downgraded the stock.

Tesla (TSLA) traded up 1.5% early Tuesday. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were both squarely higher after today's stock market open.

In a volatile stock market environment, Dow Jones leaders Johnson & Johnson (JNJ), Merck (MRK) and UnitedHealth (UNH) — as well as BJ's Wholesale Club (BJ), Evolent Health (EVH), Funko (FNKO) and Quanta Services (PWR) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.

Evolent Health and UnitedHealth are IBD Leaderboard stocks. BJ's is an IBD 50 stock. Evolent was IBD's Stock Of The Day on Wednesday. Quanta was Thursday's Stock Of The Day.

After Tuesday's open, the Dow Jones Industrial Average fell 0.2%, and the S&P 500 rose 0.1%. The tech-heavy Nasdaq composite gained 0.6% in morning trade. Peloton (PTON) cut gains to 2.75% after announcing it would shutter its in-house manufacturing operations.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved up 0.6%. The SPDR S&P 500 ETF (SPY) rose 0.2%.

The 10-year Treasury yield tumbled to 2.92% Tuesday morning, deepening Monday's drop to 2.99%. Meanwhile, U.S. oil prices slid nearly 5% in early action, with West Texas Intermediate trading just above $99 per barrel. WTI fell as low as $95 per barrel last week.

On Monday, the Nasdaq closed 2.3% lower, the S&P 500 fell 1.2% and the Dow Jones Industrial Average lost 0.5%. Small caps also sold off, with the Russell 2000 losing 2.2%.

Monday's The Big Picture column commented, "Bears stomped back into the stock market Monday as apprehension built for the first wave of second-quarter earnings and inflation reports coming out this week."