This summary text is fully AI-generated and may therefore contain errors or be incomplete.
Stock Market Rally Gains Momentum After Fed Meeting
The stock market rally gained momentum following the Federal Reserve’s meeting and Chairman Jerome Powell’s comments. The major indexes, including the Dow Jones Industrial Average and the S&P 500, reached all-time highs, with the Nasdaq composite also closing at a record high. The small-cap Russell 2000 surged, indicating a positive market reaction to the Fed’s rate-cut outlook.
Fed Rate-Hike Outlook
The Fed, as expected, took no action during the meeting but indicated a median year-end fed funds rate of 4.6%, down from the current 5.25%-5.5%. The Fed’s projections also maintained the forecast of three quarter-point rate cuts in 2024. Fed Chief Powell reiterated the plan to start easing “at some point this year,” while also acknowledging the progress in fighting inflation. The central bank’s willingness to take a wait-and-see approach on rate cuts was evident, with the odds of a June rate cut rising to 75%.
Stocks in Buy Areas
Several stocks showed positive momentum, with Arista Networks, DraftKings, PVH Corp., JFrog, and Royal Caribbean flashing buy signals. Microsoft reaffirmed a recent entry ahead of an AI event, indicating potential opportunities for investors to add exposure.
Market Analysis and Opportunities
While the market rally presented opportunities for investors, the S&P 500’s proximity to extended levels and high bullish sentiment suggested a cautious approach. Investors were advised to add exposure incrementally, especially after the recent gains. The need to focus on actionable or setting up stocks was emphasized, with a recommendation to keep watchlists up to date and stay in sync with market direction and leading stocks and sectors.
ETFs and Sector Performance
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF and the VanEck Vectors Semiconductor ETF showed positive gains, with notable holdings such as Microsoft and Micron. Reflecting more speculative story stocks, ARK Innovation ETF and ARK Genomics ETF also advanced. The performance of SPDR S&P Metals & Mining ETF, SPDR S&P Homebuilders ETF, Energy Select SPDR ETF, and Health Care Select Sector SPDR Fund varied, while the Industrial Select Sector SPDR Fund and Financial Select SPDR ETF climbed.
Individual Stock Performance
Several individual stocks demonstrated strong performance, with Arista, DraftKings, PVH, JFrog, and Royal Caribbean showing notable gains. Microsoft’s record close and upcoming event were highlighted, along with the rebound of DraftKings from the 21-day and 10-week lines. The performance of PVH and JFrog stocks, along with Royal Caribbean’s rally, were also detailed.
Micron Earnings and Futures
Micron reported a surprise fiscal second-quarter profit, with revenue exceeding expectations and bullish Q3 guidance. This led to a positive after-hours market reaction, with Dow Jones futures, S&P 500 futures, and Nasdaq futures rising. The stock’s strong performance indicated a potential record high.
Conclusion
The stock market rally, fueled by the Fed meeting and positive market reaction, presented opportunities for investors to consider adding exposure. However, caution was advised due to the S&P 500’s proximity to extended levels and high bullish sentiment. The need to focus on actionable stocks and stay in sync with market direction and leading stocks and sectors was emphasized, along with the performance of individual stocks and ETFs.
📎 Read the original article on investors.com
