The stock market had a strong week, with major indexes hitting record highs thanks to a dovish Fed and bullish AI prospects. As Dow Jones futures, S&P 500 futures, and Nasdaq futures are set to open Sunday evening, let’s take a closer look at what’s been driving the market and what investors can expect in the week ahead.
Two main factors have been influencing the market rally since the end of October: expectations of Fed rate cuts and the ongoing artificial intelligence boom. Last week, the Federal Reserve reaffirmed projections to cut rates three times in 2024. Companies like Nvidia, Broadcom, and Microsoft had upbeat AI events, while Micron Technology reported a surprise profit and strong guidance thanks to AI tailwinds.
Nvidia, Broadcom, and Micron stocks saw significant gains last week, along with other AI plays. Meanwhile, sectors across the board enjoyed big gains, with a diverse group of stocks flashing buy signals, including financials. Leading stocks like Uber Technologies, Eli Lilly, and CrowdStrike Holdings are setting up in messy consolidations, offering opportunities for investors.
As China begins implementing guidelines to keep Intel and Advanced Micro Devices microprocessors out of government PCs and servers, the market continues to shift. Nvidia and Uber stock are on IBD Leaderboard, Microsoft stock is on IBD Long-Term Leaders, and various other stocks are on the IBD 50 and IBD Big Cap 20 lists.
Looking at ETF performance, various sector ETFs showed gains, including technology, semiconductors, metals and mining, infrastructure, airlines, homebuilders, energy, healthcare, and more.
Overall, the market rally last week was fueled by positive news, with many stocks showing buy signals. Investors are advised to make new purchases incrementally, avoiding extended stocks and focusing on finding the best possible names ahead of time.
As the market continues to evolve, it’s crucial to stay informed and prepared for potential opportunities. Keep an eye on leading stocks and sectors, and consider using tools like IBD Live for expert analysis and guidance.
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