Major indexes tried to turn positive but struggled Tuesday as Federal Reserve Chairman Jerome Powell weighed in on the future course of monetary policy. Among individual stocks, Tesla (TSLA) rose on better deliveries while Amazon.nl (AMZN) was steady despite a bullish call. And Supermicrocomputer (SMCI) posted solid gains on the stock market today.
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Monthly Market Report with Jim Roppel and Alissa Coram: June 2024
The Dow Jones Industrial Average fell 0.1%, while the tech-heavy Nasdaq composite rose 0.1%. Chip stocks ON Semiconductor (ON) did well here, with an increase of over 2%.
Meanwhile, the S&P 500 flirted with break-even territory. Artificial intelligence player Super Micro Computer stood out as it rose around 3%. Eli Lilly (LLY) lagged, however, falling about 3%.
S&P 500 sectors were mixed, with consumer staples and real estate the best performers, while technology and health care were the worst.
Small caps were higher after yesterday’s pullback, with the Russell 2000 rising 0.2%. However, the Innovator IBD 50 ETF (FFTY) struggled, falling 0.7% in the stock market today.
Fed Chairman Powell speaks out
Speaking at the European Central Bank’s forum on the future path of interest rates on Tuesday, Fed Chairman Powell said “significant progress” had been made in bringing down both core and headline inflation.
“When we sat here last year, there were a lot of things we didn’t know,” Powell said. “We didn’t realize that we were about to enter a seven-month period of much lower inflation rates, we didn’t realize that the second half of last year was going to be an extraordinary year from a growth standpoint and also from the same labor standpoint, so things actually played out in a remarkable way in the second half of last year.”
He said the US “continued to experience solid growth” in the first half of 2024 and that the labor market “remains strong, although we have seen continued reallocation in the labor market.” He also said that inflation appears to be returning to a disinflationary trend after a pause in the first quarter.
“I think the latest reading, and to a lesser extent the previous one, suggests that we’re getting back on a disinflationary path. We want to be more confident that inflation is coming down sustainably to 2% before we start the process of easing policy,” Powell said. “What we’d like to see is more data like we’ve seen recently. We’d also like to see the labor market remain strong. We’ve said that if we see the labor market weaken unexpectedly, that’s something that could also prompt a response.”
Dow Jones Today: Apple Stocks Rise
Apple was the best performing stock on the Dow Jones Industrial Average, rising nearly 1 percent. The stock has now expanded past a cup base entry of 199.62.
3M (MMM) and Honeywell International (HON) also outperformed on the widely watched index.
Nike (NKE) lagged the most and is still reeling from the fallout from its dreadful earnings report, down nearly 2%. Verizon Communications (VZ) also fell, by more than 1%.
Stock Market Today: Tesla Surges on Surging Deliveries
Tesla bears licked their wounds in early action. Tesla shares rose nearly 5% after the company beat analysts’ expectations for deliveries.
The electric vehicle giant reported 443,956 deliveries in the second quarter, easily topping expectations of 420,000 to 425,000. While that far exceeded Wall Street expectations, it also fell short of the 466,000 EVs delivered in the second quarter of 2023.
Tesla also reported Tuesday that it deployed 9.4 gigawatt hours of energy storage products in the second quarter, the company’s highest quarterly deployment to date.
Tesla shares have now been extended from a 191.08 handle buy point, according to MarketSurge chart analysis. The buy range extended as high as 200.63. Shares were holding gains ahead of the major announcement, as the stock rose in each of the previous five sessions.
Amazon Approaches AI ‘Tipping Point’
Elsewhere, Mizuho analyst James Lee named another Magnificent Seven stock, Amazon, as a “top pick” in a note to clients. Lee gave the stock a price target of 240.
“Gen-AI projects are approaching a tipping point, where externally facing models will not be commercially deployable for another six months,” Lee said in his note.
Given the company’s large customer base, he expects “inference activity to grow significantly,” bolstering his confidence in the company’s cash cow, Amazon Web Services.
Amazon shares were nearly flat on the stock market today, trading in a buy zone above a flat entry level of 191.70.
The stock has a Composite Rating of 93 from Investor’s Business Daily and is on the prestigious IBD Leaderboard list of best growth stocks.
Stock Market Today: Stocks Close to Buy Points
Play financial software Alkami technology (ALKT) is flirting with a cup entry of 29.29, according to an analysis by MarketSurge.
The stock has a near-perfect IBD Composite Rating of 98. Earnings performance is solid, with an Earnings Per Share Rating of 80 out of 99. It ranks in the top 5% of issues in terms of price performance over the past 12 months.
Banking giant Goldman Sachs (GS) is approaching a flat-base entry of 471.48 on the stock market today. The relative strength line is bending upwards again after a dip.
Overall performance has been good, with an IBD Composite Rating of 97. Big Money has been buying up a lot of stocks lately, with an Accumulation/Distribution Rating of B-.
Follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more growth stock analysis.
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