Market indexes got an additional shot in the arm Tuesday after a Federal Reserve official said he expected interest rates to come down. The news came as investors were already enjoying robust gains on the stock market today thanks to easing wholesale inflation numbers from the Labor Department.
The Nasdaq composite jumped 2.4%, gapping up past Monday's close to notch a fourth straight gain. The tech-heavy index found support at its 21-day exponential moving average, though it remained short of its 50-day moving average.
Stocks on the S&P 500 also finished with a fourth straight increase by posting a 1.7% gain. Like the Nasdaq, the benchmark S&P gapped up to top the 21-day line, but still hung just below the 50-day.
The Dow Jones Industrial Average was the weakest of the three major indexes, though it climbed more than 400 points, or 1%. The 30-stock index started to gap up past its 50-day moving average after hovering around it for six straight days.
In small caps, the Russell 2000 jumped 1.6% on the stock market today. And volume was higher on the Nasdaq and the New York Stock Exchange vs. the same time Monday.
In the bond market, the 10-year Treasury yield shed six basis points to 3.85% Tuesday. U.S. crude oil fell 2% to $78.46 a barrel.
Atlanta Federal Reserve President Raphael Bostic said he expects the U.S. economy to be ready to cut interest rates within the next few months without an upcoming recession.
"I'm hopeful that in the next several months, we'll be at a place where we have an economy that's pretty much fully normalized," Bostic told the Conference of African American Financial Professionals in Atlanta.
Stock Market Today: Stocks Revisit Buy Points
Elsewhere, IBD SwingTrader stock Sherwin-Williams powered up nearly 2% as it clawed back to a recent cup base buy point at 348.37. Shares are in the buy zone up to 365.79.
IBD SwingTrader and IBD 50 stock ServiceNow added 1.5% and revisited a 815.32 buy point out of a long, irregular base. It is in a buy range up to 856.09. Shares have been volatile since the workflow software company beat second-quarter adjusted earnings and revenue on July 24.
Further, Hamilton Insurance popped 6.3% in heavy volume and broke out above an alternate buy point of 18.07. The stock rebounded from a failed flat-base breakout after the insurance company topped second-quarter profit estimates and announced a $150 million stock buyback Aug. 7. Shares reached a record high Tuesday.
2:35 p.m. ET
Nvidia Jumps For Second Day
IBD Leaderboard stock Nvidia popped more than 6% and reclaimed its 21-day exponential moving average. Shares didn't seem rattled on news that Chinese electronics maker Huawei is planning to roll out a new artificial intelligence chip for the China market. The new chip is comparable to Nvidia's H100 chip.
Tuesday's gain follows Monday 4.1% jump as Nvidia stock climbs back from a recent slump. Nvidia is gearing up for its fiscal second-quarter earnings report on Aug. 28.
PACS Group rocketed more than 15% higher after the company topped second-quarter sales estimates but posted a quarterly loss. But enthusiasm may have come from the company's increased 2024 revenue outlook.
The stock reached a 20% profit zone out of a flat base with a 31.76 buy point. Shares reached a record high in heavy trading on the stock market today. The nursing care provider stock started trading on April 11 at an initial price of $21 a share.
Paysafe soared 8.8% in heavy volume after the payment processing company reported higher-than-expected second-quarter adjusted earnings and revenue. The U.K.-based company also raised its full-year 2024 sales guidance. Shares topped the buy zone of a flat base with a 19.83 buy point.
12:03 p.m. ET
Medical Device Stock Plummets
IBD 50 stock Globus Medical plunged around 8% in huge volume and knifed through its 50-day line, triggering a sell signal. The company develops and makes musculoskeletal products including spine and joint reconstruction devices.
Sea Limited popped around 10% after the company reported higher-than-expected second-quarter sales but missed earnings estimates.
"We are also revising up our guidance for Shopee's 2024 full year GMV (gross merchandise value) growth to mid-20%," Forrest Li, Sea's chairman and CEO, said in the earnings release. Shopee is an online marketplace platform that operates in Southeast Asia, Taiwan and Latin America.
Shares retook their 50-day line as they form a new base. The stock has gained around 83% so far this year but remains around 80% below its record high of 372.70 in October 2021.
Tencent Music Entertainment Group tumbled around 15% after the Chinese music streaming provider missed second-quarter sales estimates and earnings came in line with estimates.
The stock sliced below its 200-day line and fell below the bottom of a skewed pattern on the stock market today. The stock is on pace for its largest decrease since March 24, 2021, when it fell 27.1%, according to Dow Jones Market Data.
Samsara spiked nearly 5% and broke out of a cup-with-handle base after reaching the 39.21 buy point. The stock is in the 5% buy zone up to 41.17. Investors should be cautious of new buys in the current market environment. Check the IBD Big Picture for recommended market exposure levels.
10:52 a.m. ET
Data Shows Cooling Inflation
Helping stocks was the July Producer Price Index, which rose 0.1% vs. the 0.2% increase economists expected, according to the Bureau of Labor Statistics. It was also lower than June's 0.2% increase. Excluding the more-volatile food and energy prices, producer prices were flat vs. the 0.2% rise expected and came in lower than June's 0.4% increase.
The year-over-year PPI increased 2.2%, also below a 2.6% forecast. The annual PPI excluding food and energy rose 2.4% vs. estimates for a 3% increase.
Also, the National Federation of Independent Business Small Business Optimism Index rose to 93.7 and topped the 91.7 estimate, higher than June's 91.5 reading. The increase shows an uptick in economic expectations of small businesses based on 10 factors, including plans to increase employment and inventories, economic improvement and expected real sales.
Stock Movers Today: Starbucks Jumps, Chipotle Sinks
Starbucks soared more than 22% in heavy volume on news Chief Executive Laxman Narasimhan will step down immediately. He will be replaced with Chipotle's CEO, Brian Niccol, effective Sept. 9. Starbucks stock reclaimed its downward-sloping 200-day moving average on the stock market today.
Starbucks stock is on pace for its best day on record, according to Dow Jones Market Data. The coffee retail stock was the best performer on S&P 500 in the stock market today. Starbucks stock has struggled as the company has showed declining profit and revenue for the last two quarter. Fiscal 2024 earnings are expected to be flat vs. 2023.
Meanwhile, Chipotle Mexican Grill stock took a 12% hit on the news. The restaurant stock gapped below its 200-day line and has lost 30% from its 52-week high reached on June 18. In contrast to Starbucks, Chipotle was the biggest loser on the on S&P 500 on the stock market today.
On Holding reversed higher more than 4% in heavy volume following a mixed second-quarter report. The footwear company posted lower-than-expected second-quarter adjusted earnings but beat sales views. The stock is in an irregular base with a 44.30 buy point, although the patter may also be interpreted as a double bottom with a 42.45 entry.
Bullish Market Move As 5 Stocks Flash Buy Signals; CPI Inflation Data Due
Musk, Trump Stocks Show Mixed Results
Former President Donald Trump's Trump Media & Technology fell nearly 6%. It continues to tumble further below its 50-day line after Trump held a conversation on Elon Musk's X platform Monday night.
Tesla advanced 3.6% and is bumping up to its 200-day moving average, where resistance appeared the past several days.
Dow Jones stock Home Depot reversed higher 0.6%. The company missed second-quarter sales estimates but adjusted earnings topped views. It also gave full-year adjusted profit guidance below forecasts and sees full-year comparable sales declining vs. 2023.
Home Depot is holding above its 200-day line and is testing the nearby 50-day line. Share are in an undefined base with a 396.87 buy point. The home improvement retail stock has underperformed as seen by its mediocre 58 IBD Relative Strength Rating and 56 Composite Rating. Shares are flat so far this year.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
