Stocks closed mostly higher as the May consumer price index was unchanged and the Federal Reserve signaled just one rate cut this year. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq were all down in the last hour of trading today.
X
The Dow closed 0.1% lower after a quiet afternoon and ended just below its 50-day moving average. The S&P 500 trimmed its gains to a 0.9% gain, while the Nasdaq composite ended the day 1.5% higher. Nasdaq and S&P closed at record highs. The small-cap Russell 2000 outperformed with a 1.6% jump, but closed near session lows.
Volume rose on the Nasdaq and New York Stock Exchanges, according to early data. The Innovator IBD 50 ETF ( FFTY ) advanced 2%.
The spread was bullish, with advancers leading decliners by a 7-4 ratio on the Nasdaq and 5-to-2 on the NYSE.
Broadcom ( AVGO ) rose 2.4% as it holds well in a buy zone up to 1,510.08 from a flat base with a 1,438.17 buy point. Shares received a boost after SWS Research initiated coverage on the stock with a buy rating and 1,716 price target. In addition, Rosenblatt reiterated its buy rating and price target of 1500. The chip designer reports its fiscal second-quarter earnings results after the market close.
Updated at 3:02 pm ET
Fed cuts rate cut forecast
The Fed decided to maintain the target range for the federal funds rate at 5.25%-5.5%. But in a surprise to financial markets, the Fed now expects just one rate cut in 2024 versus the three it forecast in March.
“In recent months, there has been modest further progress toward the Committee’s 2% inflation objective,” the Fed said. “The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving steadily toward 2%.”
Powell told reporters that the inflation readings had led policymakers to reduce the expected number of rate cuts. He added that today’s CPI report was better than expected, but the central bank wants to see more evidence of cooling prices.
Updated at 1:33 PM ET
These stocks flash sell signals despite the rally
IBD 50 shares Kanzhun (BZ) dipped more than 7% below the 21.32 buy point and triggered a sell signal. The China-based job recruitment app also retreated below its 50-day moving average.
AppLovin ( APP ) is on track for a fifth straight day of losses as it undercuts its 50-day line, also triggering a sell signal.
Meanwhile, a provider of mortgage, real estate and financial services Rocket companies (RKT) climbed back above the 15.19 buy point. The stock reacted to the Mortgage Bankers Association’s mortgage application Composite Index, which rose 15.6% last week versus a 5.2% drop the previous week. Housing stocks are also rising with the latest consumer price index report.
Robin Hood (HOOD) bounced and continues its ascent above the buy zone on a cup base with a 20.55 entry. Shares have risen since the online brokerage announced plans to buy cryptocurrency exchange Bitstamp. Shares of Robinhood are up about 89% so far this year.
Updated at 12:15pm ET
Stock Breakouts Rack Up; Nvidia hits Fresh High
Solutions of elements ( ESI ) catapulted to heavy volume after the specialty chemicals company raised its adjusted earnings forecast for 2024. It also raised adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) guidance for the second quarter and for the year full. The stock bounced off a flat base with a 25.81 buy point and is in a buy zone at 27.10.
ASML Holding (ASML) broke out of a cup base with a 1,056.34 buy point and is in a buy zone at 1,109.16. Its relative strength line reached a 52-week high, as shown by the blue dot on MarketSurge’s weekly chart.
Universal screen (OLED) has crossed a 194.84 entry. Shares are on pace for an eighth straight advance. The high-resolution video display maker has the third-best EPS, Composite Rating and SMR Rating of 35 companies in its industry group.
Lam Research (LRCX) crossed a flat-based buy point at 1007.39. Its buy zone lies at 1,057.76.
Vista Outdoor (VSTO) broke out of a flat base with a 36.37 buy point and remained at the bottom of the buy zone.
IBD Stock Leaderboard Nvidia (NVDA) fired up and hit another level. Recognizing the market’s bullish pattern identified a “pivot strength” flag as the stock advanced more than 20% from its entry point within 15 trading days.
First solar ( FSLR ) jumped to a 52-week high and posted a 31% gain from a long, uncertain base with a buy point of 232. Oppenheimer raised its price target to 325 from 271 and held evaluation of the best performance in the solar panel manufacturer. First Solar also has a power from the rotating flag in MarketSurge.
Updated at 10:39 a.m. ET
Economic News In the stock market today
The consumer price index in May remained unchanged against the expected increase of 0.1%. Excluding food and energy, or the core CPI, the index rose 0.2% versus the 0.3% consensus. Annual CPI rose 3.3%, slightly below the 3.4% forecast. Annual core prices rose 3.4%, lower than the forecast of 3.5%.
The Federal Reserve’s two-day meeting concludes with a policy statement at 2:30 PM ET, followed by comments from Powell at 2:30 PM. statements.
Investors remain uncertain about the timing of the first rate cut. On Wednesday before the CPI announcement, there was a 50-50 chance that the first rate cut would come at the September meeting, with the odds of a cut at the November meeting at 69%, according to CME Group’s FedWatch Tool. This increased after CPI numbers at 72.7% in September and an 83.8% chance of a November decrease.
The 10-year Treasury yield fell 13 basis points to 4.27%.
U.S. crude oil prices rose about 1.7% to $79.24 a barrel.
Stock market today: Oracle explodes on AI news
The burden (ORCL) opened up and came out of the cup base in great volume. The cup buy point is 132.77, but a more suitable buy point of 139.60 based on the first five-minute price bar extends the buy zone to 146.58. The stock was the biggest gainer in the S&P 500 in the stock market today.
The database and cloud infrastructure company reported fiscal fourth-quarter revenue and sales that missed estimates late Tuesday. But the stock rose after Oracle announced cloud partnerships with OpenAI and Alphabet‘s (GOOGL) Google. It also said it will expand its partnership with Microsoft (MSFT) Azure will include ChatGPT training models from OpenAI.
Shares of Microsoft’s Magnificent Seven, also an IBD Long-Term Leaders name, rose more than 1% and are in a buy zone up to 452.36 from a 430.82 buy point.
Another name of the Magnificent Seven, Apple (AAPL), reached a new high in the stock market today. Dow Jones shares extend from the buy zone of a 199.62 cup-based buy point. Shares rose on Tuesday as investors digested Apple’s artificial intelligence strategy, which it unveiled at its Worldwide Developers Conference on Monday.
Casey’s General Store ( CASY ) rallied more than 18% and has now extended from the 324.40 buy point of a flat base. The convenience store chain beat fiscal fourth-quarter profit and sales estimates. The company expects fiscal 2025 same-store sales to grow 3% to 5%.
Follow Kimberley Koenig for more scholarship news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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