Dow Jones futures saw a modest rise Sunday evening, accompanied by gains in S&P 500 and Nasdaq futures, as the anticipation builds for the Federal Reserve’s pivotal meeting. This marks the first scheduled rate cut since the onset of the COVID-19 pandemic in 2020. After a period of downturn, the stock market has rebounded significantly, with both the S&P 500 and Nasdaq composite experiencing their most substantial weekly gains of the year, successfully reclaiming their 50-day moving averages following a prior week’s decline. Currently, the S&P 500 and Dow Jones are nearing record highs, with numerous leading stocks indicating buy signals.
Investor sentiment remains optimistic, buoyed by expectations of rate cuts from the Fed and the burgeoning influence of artificial intelligence (AI) on the market. Notably, Nvidia’s CEO Jensen Huang has reported an “incredible” demand for the company’s AI chips, with production of their next-generation Blackwell chips now in full swing. Nvidia’s stock jumped, positively impacting other AI-related companies and the broader market.
Several key players are generating buzz with their recent performance. Companies like Arista Networks, Interactive Brokers, Shift4, DoorDash, Royal Caribbean, Meta Platforms, Sea, and Microsoft are all signaling potential buy opportunities. In total, there are around 25 stocks categorized as being in buy territory.
Investors have been actively finding buying opportunities, especially as the Fed’s meeting approaches.
Specifically, Nvidia, DoorDash, and Meta are highlighted on IBD Leaderboard, while Interactive Brokers is featured on SwingTrader. Microsoft is recognized as a Long-Term Leader, and Nvidia, Arista Networks, Meta Platforms, and Royal Caribbean are all included in the IBD 50 portfolio.
In the latest trading, Dow Jones futures climbed 0.3%, with S&P 500 futures rising 0.2% and Nasdaq 100 futures increasing by 0.1%. Additionally, crude oil futures edged upward.
All eyes will be on the Federal Reserve’s meetings scheduled for September 17-18, leading to speculations around the extent of interest rate cuts we might expect. Economists largely anticipate a reduction, although market speculation remains divided on whether the cut will be 25 or 50 basis points. There’s a strong consensus about the potential for 100 to 125 basis points of cuts by the end of the year, along with an updated “dot plot” revealing policymakers’ rate projections.
This past week marked a significant turnaround in the stock market rally, particularly after the previous week’s disappointing performances. The Dow Jones Industrial Average surged 2.6% during the last week, with the S&P 500 increasing by 4% and the Nasdaq composite rocketing up 5.95%—the highest weekly gains recorded this year. The small-cap Russell 2000 also saw a bounce, increasing by 4.4%.
The previous week featured a bearish trend with the Nasdaq closing below previous lows, a concerning sign for traders. However, the market shifted significantly on Wednesday after a rough start, with major indexes recovering strongly, particularly the S&P 500 that closed above its 50-day line, and the Nasdaq following suit by Thursday.
The week also showcased a remarkable performance among leading stocks, which saw many tech stocks entering buy zones. The 10-year Treasury yield dropped 6 basis points to settle at 3.65%, while U.S. crude oil futures gained 1.45%, reaching $68.65 a barrel after recently hitting a 52-week low.
Several growth ETFs also reported remarkable performances. The Innovator IBD 50 ETF surged by 6.95%, the iShares Expanded Tech-Software Sector ETF increased by 4.8%, and the VanEck Vectors Semiconductor ETF skyrocketed by 10.2%, all benefiting from strong underlying stocks like Nvidia and Microsoft.
Among individual stocks, Arista Networks saw a 14.5% increase last week, breaking through its 50-day moving average and achieving a new buy point after a recent pullback. Similarly, Meta Platforms rebounded with a gain of 4.9%, overcoming previous resistance zones. Interactive Brokers also made notable gains, up 4.5%, showing strength as it bounced from critical support levels.
With key stocks rallying, investors are advised to stay vigilant. The stock market rally appears to be gaining renewed momentum, making it essential for investors to capitalize on opportunities while remaining mindful of the upcoming economic indicators and market signals.
As we look ahead, staying aligned with the market’s direction and identifying strong performing sectors and leading stocks is crucial. Regularly consulting resources such as The Big Picture can provide invaluable insights, helping traders navigate the ever-evolving landscape of the stock market.
For ongoing updates and stock market analysis, following industry experts and participating in live discussions can enhance your trading strategy and keep you informed about crucial developments in the market.