On Monday, US equities experienced an uptick, with the Dow Jones Industrial Average and S&P 500 achieving new record closes.
The S&P 500 reached a historic peak today, marking the 40th time this year. $SPX
— Charlie Bilello (@charliebilello) September 24, 2024
Market participants are focusing on remarks from Federal Reserve officials and an important inflation indicator for insights regarding the likelihood of an additional significant rate reduction. Following an all-time high close on Friday, the Dow increased by over 0.1%.
Meanwhile, the S&P 500 rose more than 0.2%, securing its own record. The tech-heavy Nasdaq Composite saw a 0.1% increase.
* S&P 500 ACHIEVES NEW INTRADAY RECORD HIGH @reuters $SPX 🇺🇸 pic.twitter.com/5u3ZvO82V5
— Carl Quintanilla (@carlquintanilla) September 24, 2024
The market is currently contending with worries about the US economic landscape, which have lingered following the Fed’s recent decision to lower interest rates.
A critical consideration now centers on whether forthcoming economic data will validate Fed Chair Jerome Powell’s claim that the economic conditions remain robust.
A lot hinges on Friday’s release of the PCE index, which is the Fed’s favored measure of inflation, as well as Thursday’s report on second-quarter GDP. Favorable data could pave the way for policymakers to implement an additional 0.5% cut within the year.
On Monday morning, investors received further insights into policy direction from Fed members. Raphael Bostic and Neel Kashkari voiced their backing for a more substantial initial rate cut due to advancements in inflation improvements and a softening job market. Given the unusual division in the last decision, comments from Powell and dissenting Fed governor Michelle Bowman later this week will likely be examined closely.
Among the notable corporate movements on Monday, Tesla shares experienced an uptick as Wall Street expressed optimistic forecasts ahead of the electric vehicle manufacturer’s upcoming robotaxi day in October. Tesla’s stock surged by over 4%. The company plans to showcase its autonomous taxis on October.
Impact of the Fed’s Major Rate Cut on the Market
10 and reveal its third-quarter sales data, with analysts predicting a 6% rise in sales, estimating around 460,000 EVs. In addition, Intel’s stock rose by more than 4% following a Bloomberg report revealing that private equity firm Apollo Global Management is prepared to invest up to $5 billion in the distressed chip manufacturer, signaling confidence in its recovery strategy.
Boeing’s shares increased by 2% after the company reportedly enhanced its contract proposal to the machinists’ union in efforts to resolve a strike, offering a 30% wage hike over four years, an increase from a previous 25% proposal. Recently, Boeing shares had been trading near 52-week lows. Meanwhile, GM’s stock declined due to a downgrade from Bernstein.
Auto analyst Daniel Roeska cautioned investors about various challenges that could hinder the stock’s performance. Bernstein moved GM’s stock down from Outperform to Market Perform. Meanwhile, House Republicans are striving to prevent a government shutdown this week, potentially allowing the government to remain operational until December.
20. Bank of America has announced a plan to establish 165 new branches by the end of 2026, following in the footsteps of other major US banks like JPMorgan Chase that are expanding their physical locations. Microsoft’s stock received a rare downgrade due to concerns that the company may be too dependent on Nvidia for its AI infrastructure, while competition has intensified.
D.A. Davidson analysts have lowered Microsoft’s stock rating to Neutral. Trump Media & Technology Group’s stock fell an additional 6% on Monday after the conclusion of the company’s six-month lock-up period. Since last Thursday, shares have plummeted by approximately 15%.
In summary, US stocks climbed higher on Monday, with both the Dow and S&P 500 achieving fresh record closes as the September rally persisted.
