Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures, as the market reacted favorably to the prospect of steady interest rate cuts from the Fed. micron technology (Mu) saw its revenue soar overnight as the Microsoft AI event took place on Thursday.
X
Stocks rose solidly for most of the afternoon on Wednesday, as Federal Reserve policymakers signaled they still expect three interest rate cuts in 2024. Fed Secretary Jerome Powell reiterated that it would be appropriate to begin easing at “some point this year.”
The NASDAQ and small-cap stocks led the way, with the S&P 500 and Dow Jones hitting record highs.
Arista Networks (ANET), draft kings (DKNG), PVH Co., Ltd. (PVH), jayfrog (frog) and royal caribbean (R.C.L.) The buy signal flashed.
dow giant microsoft (MSFT) Revisited recent entries ahead of Thursday’s AI event.
It is reported that the Department of Justice will file a lawsuit. apple (AAPL) Will be indicted on Thursday for iPhone-related antitrust violations.
DraftKings is in stock IBD Leaderboard. DraftKings and PVH stock are on SwingTrader. Microsoft stock is listed on the IBD Long-Term Leaders list. Microsoft, DraftKings, Arista Networks, JFrog, and Royal Caribbean stocks are IBD50. Nvidia, Arista Networks, and SMCI stocks are IBD big cap 20. PVH was the IBD Stock Of The Day on Wednesday.
Dow Jones futures today
Dow Jones futures were trading 0.25% above fair value, with Apple stock providing some drag. S&P 500 futures rose 0.3%. Nasdaq 100 futures rose 0.6%. Micron stock is a component of the S&P 500 and Nasdaq 100.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
micron earnings
After the market closed, Micron announced unexpected profits in its second quarter results, and sales hit a record high. The memory chip giant also gave a bullish outlook for the third quarter. MU stock soared 18% overnight to an all-time high. Shares rose 2.4% to 96.25 in Wednesday trading.
Outlook for Fed rate hike
As expected, the Fed took no action Wednesday afternoon. But through a “dot plot” forecast, policymakers expect the median federal funds rate to end the year at 4.6%, down from the current 5.25% to 5.5%. This is unchanged from expectations that the Fed will cut interest rates by three quarter points this year in late 2023. With inflation stagnant, some speculated that the Fed may limit its rate cuts to just two.
The Fed slightly raised its forecasts for 2024 GDP and core PCE inflation.
Policymakers also now expect the federal funds rate to be 3.9% at the end of 2025, compared to the 3.6% expected in December, which would mean one less rate cut.
Fed Chairman Jerome Powell said the Fed is making good progress in combating inflation. He said rate cuts should begin “at some point” in 2024, but gave few details. Powell also said there was no discussion on the balance sheet, indicating that policymakers were not yet ready to taper off quantitative tightening.
Notably, Chairman Powell appeared unconcerned with the rise in stock markets and generally accommodative financial conditions.
The probability of a June rate cut rose to 75% from 59.2% on Tuesday.
The central bank appears to be taking a wait-and-see approach to lowering interest rates. Several important inflation and economic reports are still scheduled before the June 11-12 meeting.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
The stock market’s rally gained momentum toward the close as the Fed stuck to its rate cut plan and Fed Chairman Jerome Powell did not say anything to undermine it.
In stock market trading on Wednesday, the Dow Jones Industrial Average rose 1% and the S&P 500 rose 0.9%, both hitting record highs. The Nasdaq Composite rose 1.25% to a record close. The small-cap Russell 2000 rose 1.9%, above its 21-day line and back near its 23-month high.
Financial markets often react by changing direction on the second day of a Fed meeting.
But on Wednesday, the market rallied, with many stocks issuing buy signals and other major stocks rallying higher.
The opportunity may not last long. The S&P 500 is 4.6% above its 50-day moving average, not too far from the 5% level that seems to be an extension. The Nasdaq has a little more room to move above 50 days at 4.2%.
Bullish mood remains excessivesomething to be concerned about.
US crude oil prices fell 2.1% to $81.68 per barrel.
The 10-year Treasury yield fell 2.5 basis points to 4.27%.
ETF
Among growth ETFs, iShares Expanded Technology Software Sector ETF (IGV) rose 1%, with Microsoft stock becoming a major holding. VanEck Vectors Semiconductor ETF (SMH) rose 1.6%. Micron stock is SMH’s major shareholder.
ARK Innovation ETF (Arkku) rose 3.5%, while the ARK Genomics ETF (arcg) rose 1.85%.
SPDR S&P Metals & Mining ETF (XME) rose 2.4%. SPDR S&P Home Builders ETF (XHB) rose 1.8%. Energy Select SPDR ETF (XLE) fell 0.1%, while the Healthcare Select Sector SPDR Fund (XLV) fell 0.2%.
Industrial Select Sector SPDR Fund (XLI) and Financial Select SPDR ETF (XLF) rose 1.2%.
Timing the Market with IBD’s ETF Market Strategy
Purchase area inventory
Arista stock rose 3.4% to 296.58, clearing a flat-based buy point of 292.66. On Tuesday, the stock fell to its 10-week line shortly after the start of trading, but losses narrowed. The relative strength line marks a new high on the breakout, a bullish sign marked by the blue dot at the end of the RS line. market surge chart.
DraftKings stock rose 5.7% to 46.27, breaking a short-term consolidation that wasn’t long enough for a flat base. Early Wednesday, the stock rose above a short trend line. DKNG stock rebounded from its 21-day and 10-week lines this week, fueling sports betting activity as March Madness begins.
PVH stock rose 3.7% to 137.40, rebounding from its 21-day line and breaking a short downtrend. As a result, the rebound from the 10-week line on Tuesday was slightly larger than the previous consolidation.
JFrog stock rose 3.9% to 44.65, rebounding from its 21-day line and breaking above the downtrend line. Volume was below average. FROG stock is undergoing new consolidation following the profit gap up on February 15th.
Royal Caribbean shares rose 4.7% to 135.53, clearing a cup-based buy point of 133.77. That happened a few hours before RCL stock completed its handle, but it only moved the entry lower by a fraction.
Microsoft stock rose 0.9% to 425.23, a record closing price of just one penny above its March 14 closing price of 425.22. On March 13th, the stock completely cleared its non-sideways base, giving a buy signal.
The Dow giant will hold a “New Era of Work” event on Thursday. Microsoft discusses AI innovations along with new features for Windows and Surface computers.
what to do now
The stock market showed a bullish move following the Fed meeting and Chairman Powell’s comments. The major indexes are at or near their highs, with many major stocks issuing buy signals.
This provided an opportunity for investors to add exposure. If the market doesn’t reconsider, there could be more opportunities on Thursday.
But with this week’s rally bringing the S&P 500 closer to an extension and increasing bullish momentum, investors may want to gradually add exposure, especially after Wednesday.
However, look for stocks that are viable or set. Keep your watchlist up to date.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
Follow Ed Carson on the thread. @edcarson1971 and on X/Twitter @IBD_ECarson The latest information on the stock market, etc.
You may also like:
The best growth stocks to buy and watch
IBD Digital: Get access to IBD’s premium stock lists, tools and analysis now
Identify locations and buy points with MarketSurge pattern recognition
