All three major indexes are cruising toward comfortable weekly wins
September is shaping up to be not so bad after all. The Dow Jones Industrial Average (DJI) scored four consecutive record highs this week amid the Federal Reserve's first interest rate cut in four years, which came in at 50 basis points. While traders initially feared the outsized move could be indicative of economic downturn, Fed Chairman Jerome Powell reinforced that inflation trends drove the central bank's decision.
This week was not without volatility, however. The S&P 500 Index (SPX) snapped a seven-day win streak, after it narrowly avoided a loss as investors brushed off better-than-expected retail sales data for August. Meanwhile, the Nasdaq Composite (IXIC) cut short a five-day winning run amid some mid-week profit-taking. Despite pivoting lower again Friday as interest ate cut optimism fades, all three major indexes are pacing for weekly wins.
Retail Names to Watch
Retailers stepped into the spotlight after fresh sales data, with Target (TGT), TJX (TJX), and Costco Wholesale (COST) all shrugging off August's strong reading. Elsewhere, Shopify (SHOP) scored an upgrade to "buy" on e-commerce growth, and Barclays praised Vans and The North Face parent VF's (VFC) healthy risk-reward profile.
Competition between Celsius Holdings (CELH) and Monster Beverage (MNST) ramped up after Jefferies chimed in, and Darden Restaurants (DRI) stock popped after revealing a partnership with Uber Technologies (UBER). Meanwhile, retail delivery competitor DoorDash (DASH) attracted a fresh bull note, and Nike (NKE) brought on a new CEO.
This Week in Tech
Intel (INTC) stock kicked off the week with a pop, after the company qualified for $3.5 billion in federal grants to produce chips for the U.S. Pentagon. News that CrowdStrike (CRWD) will expand its startup accelerator sent cybersecurity stocks Okta (OKTA) and Fortinet (FTNT) higher, while Microsoft (MSFT) gave the Dow a boost after announcing its new $60 billion share buyback plan.
We also checked in with Micron Technology (MU) before next week's earnings report, while chip sector peers Arm Holdings (ARM) and ASML Holding (ASML) were in rally mode after the Fed's interest rate cut. Finally, Mobileye Global (MBLY) shares enjoyed some relief after Intel said it had no plans to divest its majority stake in the company.
Another Wave of Economic Data Ahead
The end of September packs a data-heavy punch, with both the S&P flash U.S. services purchasing managers' index (PMI) and the manufacturing PMI slated for release, as well as the personal consumption expenditures (PCE) price index. While the earnings docket is quieter, reports will come from AutoZone (AZO), CarMax (KMX), COST, KB Home (KBH), and MU. Going into the action, take a look at six-month returns leading into Election Day, and revisit why this week required patience from options bulls.