US OPEN: Dow rebalancing, Tesla and Apple stock splits

• Wall Street opens slightly lower

• Changes in Dow Jones index take effect

• Tesla and Apple start to trade on post-split basis

US stock market indices started the final trading session of the month almost unchanged compared to Friday's closing prices. Small declines can be spotted on most US benchmarks. Nevertheless, indices from Wall Street are on the way to have the best August in decades. Below we have provide month-to-date results for the 3 main US indices (using today's opening prices):

• S&P 500: +7.1%

• Nasdaq: +9.1%

• Dow Jones: +8.2%

Dow Jones (US30) is pulling back from its post-pandemic high. The first support to watch can be found at 23.6% retracement of recent upward impulse at 28,450 pts. Keep in mind that this level is also marked with previous local peaks and lows. Nevertheless, the index still hasn't painted a lower low therefore the rally may not be over yet. Source: xStation5

Changes in Dow Jones index

A set of changes to the composition of Dow Jones (US30) is taking effect today. Those changes were forced by Apple's 4-for-1 stock split as Dow Jones is a price-weighted index. Additions to the index also reflect the growing importance of the tech sector in the US stock market and economy.

Additions:

• Salesforce.com (CRM.US)

• Amgen (AMGN.US)

• Honeywell International (HON.US)

Removals:

• Pfizer (PFE.US)

• Exxon Mobil (XOM.US)

• Raytheon Technologies (RTX.US)

Starting from today, Apple will no longer be a stock with the biggest impact on Dow Jones as its weight will be scaled down from around 12% to around 3%. In fact, Apple will be ranked 18th in terms of weight. Moreover, the divisor used to calculate index level will be increased slightly meaning that individual stocks will have a smaller impact on the index moves.

Apple (AAPL.US) started to trade on a split-adjusted basis today. The stock opened higher at the upper limit of the recent trading range. Finishing the day above $127.50 could create a bullish bias and allow the stock to test split-adjusted, intraday all-time high ($128.75) in the later part of the week. Source: xStation5

Apart from Apple, Tesla (TSLA.US) will also begin today's trading on a post-split basis. US electric vehicles maker carried a 5-for-1 stock split after close of Friday's session.

According to CNBC, a deal to sell US operations of TikTok could be announced tomorrow. Among companies that have expressed interest in the Chinese app one can find Microsoft (MSFT.US), Walmart (WMT.US) and Oracle (ORCL.US). Other reports claimed that White House thinks Microsoft is the best bidder but Trump prefers Oracle due to his friendship with Larry Ellison, owner of Oracle.

Zoom Video Communications (ZM.US) will release its quarterly earnings report today after the US stock market closes. US company providing software for video meetings has experienced a surge in its business amid a work-from-home environment. However, Zoom has attracted some bad publicity after it turned out that its software is vulnerable to hacks. Company is expected to report revenue of $500 million, marking a 242.5% YoY increase. EPS is seen increasing to $0.45 from $0.08 a year ago.