Dow Jones futures showed minimal movement overnight, alongside relatively stable S&P 500 and Nasdaq futures. Anticipation is building for the Federal Reserve’s imminent announcement regarding its first rate cut of 2025, with comments from Fed Chair Jerome Powell expected to provide crucial insights into future monetary policy shifts.
As the stock market rally continued, it experienced a slight pullback on Tuesday ahead of the two-day Fed meeting.
Market Leaders and Their Positioning
Meta Platforms (META) is currently positioned above early buy points as it approaches its highly publicized Connect conference. Similarly, key stocks such as Uber Technologies (UBER), Blackstone (BX), Robinhood Markets (HOOD), Nvidia (NVDA), and Vertiv (VRT) are nearing buy points, while Palantir Technologies (PLTR) is forming a new base. Both Vertiv and Robinhood are gaining visibility on watchlists, with Meta gaining attention as Tuesday’s featured stock.
Overview of the Market Conditions
Futures trading for the Dow Jones indicated a fractional decline, while both the S&P 500 and Nasdaq 100 remained flat. It’s important to note that movements in futures may not accurately predict trading behavior during regular market hours.
Fed Rate Expectations
The Fed is widely expected to announce a quarter-point rate cut at 2 p.m. ET on Wednesday. Mixed opinions exist among Fed officials, with some advocating for a more aggressive 50 basis point reduction and others resisting any change. The market will be closely monitoring Powell’s press conference at 2:30 p.m. ET for clarity on the Fed’s future direction, especially as investors anticipate further rate cuts in October and December.
Stock Market Performance on Tuesday
In the lead-up to the Fed’s announcement, the stock market rally showed a subdued performance, with major indices slightly dipping yet remaining near record highs. The Dow fell by 0.3%, while the S&P 500 and Nasdaq composite registered a 0.1% decline. The small-cap Russell 2000 also lost ground.
Notable market movements included uranium-related stocks, which softened after strong gains the previous day, and Rocket Lab (RKLB), whose stock plummeted 12.6% following news of a share offering. Meanwhile, crude oil prices surged by 1.9% to $64.52 per barrel, driven by reports of potential reductions in Russian oil exports amid geopolitical tensions.
ETF Performance
In the realm of growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.7%, while the iShares Expanded Tech-Software Sector ETF (IGV) dipped slightly by 0.1%. The VanEck Vectors Semiconductor ETF (SMH) made minor gains, led by Nvidia’s outstanding performance. Conversely, the ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) saw increases of 1.6% and 2.3%, respectively, supported significantly by holdings like Palantir and Robinhood.
Stocks to Watch
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Meta: The stock increased by 1.9% to 779 on Tuesday and remains slightly below an early entry of 766.51, with a potential breakout point of 796.25 after the conference.
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Uber: Declined by 1% to 97.83, close to a cup-with-handle buy point it surpassed earlier.
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Blackstone: Dropped slightly, holding its crucial buy point of 181.32.
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Robinhood: Gained 2.2%, inching closer to a buy point of 177.70.
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Nvidia: Experienced a 1.6% drop, testing its 50-day moving average, with a flat-base buy point at 184.48.
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Vertiv: Fell by 1.2% but maintains potential for a buy point at 153.50.
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Palantir Technologies: Slightly edged down to 170.26, developing a base with a possible buy point of 190.
Strategic Considerations
As the market holds at elevated highs, many leading stocks are either in buy zones or setting up favorable positions. Investors should remain vigilant, especially with the Fed meeting outcome on the horizon. It’s advisable to have watchlists prepared, alongside well-defined exit strategies to mitigate risk, particularly for those with significant market exposure.
Stay informed and aligned with the latest market trends and leading sectors for optimal investment opportunities.
