Wall Street’s rally gained momentum as U.S. stocks added over $3 trillion in value from this month’s lows, fueled by optimism that the Federal Reserve might signal an impending cut in interest rates.
The S&P 500 (SPY) marked its longest winning streak of the year, rising for the eighth consecutive day. Despite summer volatility and economic uncertainties, investor appetite for equities remains strong, bolstered by momentum trading and a surge in corporate buybacks. Goldman Sachs (GS) predicts that the "pain trade" for equities continues to be upward, with traders eyeing a potential shift in Fed policy as a pivotal moment.
Market Overview:
- Wall Street's rally added over $3 trillion in value this month.
- The S&P 500 saw its longest winning streak of 2024.
- Momentum trading and corporate buybacks are driving the rally.
Key Points:
- Investors are focused on Fed Chair Jerome Powell's upcoming commentary.
- Bank of America (BAC) analysts caution that the Fed may not be as dovish as expected.
- The S&P 500 hovered near 5,595 with low trading volumes.
Looking Ahead:
- Advanced Micro Devices (ADM) acquired ZT Systems for $4.9 billion.
- Retail giants like Lowe's (LOW), Target (TGT), and TJX (TJX) are set to report earnings.
- Investors are advised to diversify within U.S. stocks, focusing on value and small caps.
Amid the market rally, notable corporate developments included Advanced Micro Devices’ acquisition of ZT Systems for $4.9 billion, a deal that underscores the ongoing consolidation in the tech sector.
As the Fed’s potential policy pivot looms large, market participants are weighing the implications for various asset classes. Strategists suggest diversifying within U.S. stocks, particularly favoring value stocks and small caps as the market broadens.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
