Dow Jones Reaches All-Time High Based on Federal Reserve Rate Expectations; Top 5 Stocks to Buy, Micron Surges Later

The stock market rally gained momentum on Wednesday, with Dow Jones futures, S&P 500 futures, and Nasdaq futures all rising slightly overnight. This positive reaction followed indications from Federal Reserve policymakers that they still foresee three rate cuts in 2024. The market reacted well to Fed Chief Jerome Powell’s announcement that it’s appropriate to start easing “at some point this year.”

The standout stock of the day was Micron Technology (MU), which soared overnight on strong earnings. Additionally, a Microsoft AI event scheduled for Thursday added to the positive sentiment in the market.

In terms of specific stock movements, Arista Networks (ANET), DraftKings (DKNG), PVH Corp. (PVH), JFrog (FROG), and Royal Caribbean (RCL) all showed buy signals. Meanwhile, Dow giant Microsoft (MSFT) reaffirmed a recent entry ahead of the AI event on Thursday. However, the Department of Justice is reportedly set to sue Apple (AAPL) for antitrust violations related to the iPhone.

Related:  3 Alternative Artificial Intelligence (AI) Stocks Worth Buying

Micron’s earnings report after the close revealed a surprise profit in the fiscal second quarter, with bullish guidance for Q3. As a result, MU stock surged 18% overnight, signaling a potential record high. The stock rose 2.4% in Wednesday’s session.

The Fed’s rate-hike outlook remained steady, with policymakers indicating a median year-end fed funds rate of 4.6% and three quarter-point rate cuts expected in 2024. The central bank also raised its 2024 GDP and inflation estimates slightly. Despite these projections, the Fed chief emphasized that rate cuts should begin “at some point” in 2024, but few specifics were given.

Overall, the stock market rally saw major gains on Wednesday, with the Dow Jones, S&P 500, and Nasdaq all hitting record highs. The positive momentum continued into the close, with several stocks flashing buy signals. However, investors should remain cautious as the market may have a second-day reaction to the Fed meeting, and bullish sentiment is currently high.

Related:  Government bonds on track for worst year since the Marshall Plan was enacted

As opportunities arise in the market, investors should consider adding exposure incrementally and keeping an eye on actionable stocks and setups. It’s important to stay informed about market direction and leading sectors to make informed investment decisions.

For more market updates and analysis, follow Ed Carson on Threads and Twitter @IBD_ECarson. And remember to stay updated with The Big Picture to track market trends and leading stocks.

Source link

Leave a Comment