Yahoo Finance 5 Stocks Propelling S&P 500 to 25th Record High
The S&P 500 achieved a record high for the 25th time this year, powered by technology stocks. The multiple reports signaling slowing growth in the world's largest economy revived the Fed rate cuts bets once again, leading to a strong rally. Traders now see a nearly 69% chance of a September rate reduction, according to the CME's FedWatch tool, compared with around 50% last week.
While most of the stocks have performed well, we have highlighted five of them that led the way higher in yesterday's trading session. These are Hewlett Packard Enterprise HPE, Moderna Inc. MRNA, Broadcom AVGO, Micron Technology MU and Lam Research Corporation LRCX.
Tech Boost
The continued AI frenzy, coupled with fresh rate hike bets, pushed tech stocks higher. NVIDIA provided the biggest boost to the two indices as it soared more than 5% to a new record and topped $3 trillion in market cap for the first time. The chipmaker became the second-most valuable company in the United States. Apple Inc. has had the longest winning run since March 2022, while Hewlett Packard soared after reporting better-than-expected third-quarter revenues on strong AI server sales.
Traders ramped up rate-cut bets, driven by a slew of softer-than-expected U.S. economic data. The latest report released by payroll processor ADP showed that private sector job growth in the United States slowed down more than expected in May. Additionally, the Bank of Canada’s decision to ease monetary policy and a widely expected cut by the European Central Bank also fueled optimism over a looser monetary policy.
Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and thus provides a boost to the stock market.
What Lies Ahead?
Wall Street has turned more bullish on S&P 500 stocks, given the improving outlook for both earnings and economic growth. Over the past few weeks, three equity strategists tracked by Yahoo Finance have boosted their year-end targets for the S&P 500. The median target on Wall Street for the benchmark index now sits at 5,250, up from the median target of 4,850 on Dec 30, per Bloomberg data.
In the latest league, BMO Capital Markets and Deutsche Bank revamped their 2024 targets for the large-cap benchmark index, raising them to 5,600 and 5,500, respectively. One of Wall Street’s most prominent bears, Morgan Stanley, also turned positive on the outlook for U.S. stocks by lifting the price target for the S&P 500 to 5,400 from 4,500.
Hopes for rate cuts, continued AI adoption as well as strong earnings growth projections are expected to drive the S&P 500 further.
Best-Performing Stocks
Hewlett Packard provides solutions that allow customers to capture, analyze and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. The stock rose 10.7% in yesterday's trading session.
Hewlett Packard’s earnings are expected to decline 12.6% for the fiscal year (ending October 2024). It has a Zacks Rank #3 (Hold) and a solid Momentum Score of A.
Moderna is a commercial-stage pharmaceutical company primarily focused on discovering and developing messenger-RNA (mRNA) based therapies. The stock climbed 6.5% in yesterday's trading session.
Moderna has an expected earnings growth rate of 39.45% for this year. It has a Zacks Rank #3 and a solid Momentum Score of A.
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V-based products. The stock rose 6% in yesterday's trading session and has an estimated earnings growth rate of 11.4% for the fiscal year (ending October 2024).
Broadcom has a Zacks Rank #3 and a solid Momentum Score of A.
Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The shares of MU were up 5.6%. The company has an estimated earnings growth of 119.1% for the fiscal year (ending August 2024).
Micron Technology has a Zacks Rank #2 (Buy) and a Momentum Score of A. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Lam Research supplies wafer fabrication equipment and services to the semiconductor industry. It gained 5.3% in yesterday’s trading session and has an estimated earnings growth rate of 19% for the fiscal year ending June 2025.
Lam Research has a Zacks Rank #3 and a Momentum Score of A.
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Micron Technology, Inc. (MU) : Free Stock Analysis Report
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Moderna, Inc. (MRNA) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
