Stocks closed mostly higher after the May consumer price index was unchanged and the Federal Reserve signaled only one rate cut this year. The Dow Jones Industrial Average, S&P 500 and Nasdaq weakened in the final hour in the stock market today.
The Dow closed 0.1% lower after a whippy afternoon and ended just below its 50-day moving average. The S&P 500 trimmed its gains to a 0.9% increase while the Nasdaq composite ended the day 1.5% higher. The Nasdaq and S&P closed at record highs. The small-cap Russell 2000 outperformed with a 1.6% jump but closed near the session's lows.
Volume rose on the Nasdaq and New York Stock Exchange, according to early data. The Innovator IBD 50 ETF advanced 2%.
Breadth was bullish, with advancers leading decliners by a 7-4 ratio on the Nasdaq and by 5-to-2 on the NYSE.
Broadcom climbed 2.4% as it sits solidly in a buy zone up to 1,510.08 from a flat base with a 1,438.17 buy point. Shares got 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 1,500 price target. The chip designer reports its fiscal second-quarter earnings results after the market close.
Updated 3:02 p.m. ET
Fed Cuts Forecast On Rate Cuts
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 only one rate cut in 2024 vs. the three projected 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 it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%."
Powell told reporters that 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 1:33 p.m. ET
These Stocks Flash Sell Signals Despite Rally
IBD 50 stock Kanzhun sank more than 7% below its 21.32 buy point and triggered a sell signal. The China-based job recruitment app also retreated below its 50-day moving average.
AppLovin is on track for a fifth straight day of losses as it undercuts its 50-day line, also triggering a sell signal.
Meanwhile, mortgage, real estate and financial services provider Rocket Companies climbed back above a 15.19 buy point. The stock reacted to the Mortgage Bankers' Association's mortgage application Composite Index, which increased 15.6% last week vs. a 5.2% drop in the prior week. Housing-related stocks are also rising with the cooler consumer price index report.
Robinhood jumped and continues its climb above the buy zone above a cup base with a 20.55 entry. Shares have rallied since the online brokerage announced plans to buy cryptocurrency exchange Bitstamp. Robinhood stock has climbed around 89% so far this year.
Updated 12:15 a.m. ET
Stock Breakouts Rack Up; Nvidia Hits Fresh High
Element Solutions catapulted in heavy volume after the specialty chemicals company raised its full-year 2024 adjusted earnings forecast. It also boosted its second-quarter and full-year adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance. The stock jumped out of a flat base with a 25.81 buy point and is in a buy zone to 27.10.
ASML Holding broke out of a cup base with a 1,056.34 buy point and is in a buy zone to 1,109.16. Its relative strength line hit a 52-week high as shown by the blue dot on the MarketSurge weekly chart.
Universal Display bolted past a 194.84 entry. Shares are on pace for an eighth straight advance. The maker of high-resolution video displays has the third best EPS Rating, Composite Rating and SMR Rating of 35 companies in its industry group.
Lam Research jumped past a flat base 1,007.39 buy point. Its buy zone stretches to 1,057.76.
Vista Outdoor broke out of a flat base with a 36.37 buy point and remained in the bottom of the buy zone.
IBD Leaderboard stock Nvidia powered up and hit another high. MarketSurge pattern recognition identified a "power from pivot" flag after the stock advanced more than 20% from the entry point within 15 trading days.
First Solar leapt to a 52-week high and reached a 31% gain from a long, undefined base with a 232 buy point. Oppenheimer raised its price target to 325 from 271 and maintained its outperform rating on the solar panel maker. First Solar also has a power from pivot flag in MarketSurge.
Updated 10:39 a.m. ET
Economic News In Stock Market Today
The May consumer price index was unchanged vs. the expected 0.1% rise. Excluding food and energy, or the core CPI, the index increased 0.2% vs. the 0.3% consensus. The annual CPI rose 3.3%, slightly below the 3.4% forecast. Annual core prices rose 3.4%, lower than the 3.5% forecast.
The two-day Federal Reserve meeting wraps up with a policy statement at 2 p.m. ET, followed by comments from Powell at 2:30 p.m. The Fed's latest economic projections and policymakers' updated "dot plot" rate outlook will be critical, along with Powell's statements.
Investor remain unclear on 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 chances for a cut at the November meeting at 69%, according to CME Group's FedWatch Tool. That increased after the CPI numbers to 72.7% in September and an 83.8% chance for a November cut.
The 10-year Treasury yield fell 13 basis points to 4.27%.
U.S. crude oil prices rose around 1.7% to $79.24 a barrel.
Stock Market Today: Oracle Breaks Out On AI News
Oracle gapped up and broke out of a cup base in heavy volume. The cup's buy point is 132.77, but a more appropriate 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 on the S&P 500 in the stock market today.
The database and cloud infrastructure company reported fiscal fourth-quarter earnings and sales that missed estimates late Tuesday. But the stock rose after Oracle announced cloud partnerships with OpenAI and Alphabet's Google. It also said it would expand its partnership with Microsoft Azure to include training ChatGPT models from OpenAI.
Magnificent Seven stock Microsoft, also an IBD Long-Term Leaders name, rose more than 1% and is in a buy zone up to 452.36 from a 430.82 buy point.
Another Magnificent Seven name, Apple, spiked to a new high in the stock market today. The Dow Jones stock is extended from the buy zone of a 199.62 cup-base buy point. Shares surged Tuesday after investors digested Apple's artificial intelligence strategy, which it presented at its Worldwide Developers Conference Monday.
Casey's General Store soared more than 18% and is 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 increase 3% to 5%.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
