Small caps and major stock indexes kept charging higher up to the close Friday as virtually all gained back the ground lost in Thursday's sell-off. The catalyst on the stock market today was a dovish speech from Federal Reserve Chairman Jerome Powell, who set the stage for a series of rate cuts starting at the Fed's September meeting.
The Russell 2000 soared above the 2,200 level with ease and held a 3.2% gain at the close. The small-cap index stands firmly above all its major moving averages.
Meanwhile, the Nasdaq composite rallied 1.5%, and fell just short of Wednesday's close. It remains below the 18,000 mark, a potential resistance level to watch.
The S&P 500 jumped 1.2%, recapturing all of Thursday's loss and then some. The benchmark index flirted with an all-time high.
The Dow Jones Industrial Average rallied 1.1%. Blue chips came within 200 points of their all-time high, set on July 18.
There was some conviction behind the buying, with volume on the Nasdaq exchange about 7% higher compared with the same time Thursday. Volume on the New York Stock Exchange was 11% higher.
Breadth was strong again, with winners beating losers on the Nasdaq by nearly 4-to-1 on the stock market today. The ratio was about 8-to-1 positive on the NYSE.
The 10-year Treasury yield was down six basis points to 3.8%.
3:07 p.m. ET
Markets Get Ready For Rate Cuts
After Powell's speech at the Fed's Economic Symposium in Jackson Hole, Wyo., the market leaned heavily toward a total of 100 basis points of rate cuts before the end of the year. That implies a 50-basis-point cut at one of the Fed's last three meetings before the end of the year.
In a widely anticipated speech, Powell said "the time has come for policy to adjust" in reference to interest rates. He pointed out that inflation has declined significantly, the labor market is no longer overheated and supply constraints have normalized. Moreover, he sees inflation "on a sustainable path" to the Fed's 2% target.
Investors have been expecting the Fed's first rate cut to happen as soon as September as part of a series of rate reductions.
Stock Market Movers
Inside the Dow Jones index, Home Depot was one of the top gainers, up more than 2%. The home-improvement chain is trying to break out over its recent high of 375.74. Goldman Sachs also did well on the Dow, up around 2%.
Red-Hot Nvidia Next Up On Earnings Calendar
JPMorgan tried to clear a 217.56 entry early in the session, but a 1.2% intraday gain faded to 0.5%.
Homebuilders outperformed again, with the group up about about 3.5%. PulteGroup, a member of Leaderboard, jumped 4%, bringing its weekly gain to around 10%.
Also, Investor's Business Daily's Leaderboard model portfolio added two more names Friday after increasing exposure aggressively last week in light of follow-through days for the Nasdaq and S&P 500 on Aug. 13. They are pet-food maker Freshpet and utility Vistra.
Also part of the MarketSurge Growth 250, Freshpet jumped more than 3% in strong volume and topped a 136.35 entry. The maker of fresh pet food just turned profitable amid strong top-line growth in recent quarters. Freshpet is this week's New America.
1:13 p.m. ET
Stock Market Today: Banks Lead The Way
Financial stocks were among the day's best performers, with three bank-related industry groups up at least 3.5%. Among Midwest banks, UMB Financial jumped 5%, on track for its highest close since January 2022.
Nvidia was in recovery mode, up 3%, after Thursday's 3.7% haircut in higher volume. The stock has a 140.76 cup-base buy point with 136.15 as an alternate entry.
The artificial intelligence bellwether continues to trade well ahead of next week's earnings report. Results for the Magnificent Seven stock are due Wednesday after the close.
Adjusted profit is expected to jump 139% to 65 cents a share, with revenue up 112% to $28.7 billion. Growth is expected to slow at Nvidia starting with the October-ended quarter, but that's due to tougher comparisons as opposed to waning demand. Nvidia is on IBD 50 and Leaderboard.
Several other semiconductor stocks outperformed in the Nasdaq 100, including Marvell Technology, Arm Holdings and Onsemi, with gains of around 3%.
Meanwhile, cruise line operator Viking Holdings bounced back after Thursday's earnings sell-off. Shares were up 7% after slumping nearly 9% Thursday in heavy volume.
12:32 p.m. ET
Stock Market Today: IBD 50 Stock Builds On A Tear
Victory Capital progressed 2.7% and broke out of a double-bottom base with a 54.06 buy point.
IES Holdings gained nearly 5% and broke out of a cup-with-handle base with a 181.40 buy point. The 5% buy zone reaches to 190.47.
IBD 50 stock Powell Industries added another 5.3% as it looks for its seventh straight day of gains. The stock is building the right side of a cup base with a 209.14 buy point.
11:32 a.m. ET
Tesla, Nvidia Make A Comeback
Tesla stock powered up 4.6% as tech stocks reacted strongly to Powell's comments. Interest rate cuts would make auto loan rates lower. Tesla tested its 50-day line on the stock market today. The electric vehicle stock is in a newly formed base with a 271 buy point, although the Aug. 20 high of 228.22 could be used as an aggressive entry. Tesla stock was a big gainer on the S&P 500 Friday.
Intuit slid 7% in heavy volume despite the company's better-than-expected fiscal fourth-quarter profit and revenue. Investors clued in on its current-quarter earnings guidance, which was below views. Intuit was the biggest loser on the S&P 500.
10:43 a.m. ET
Cava Stock Leaps On Earnings
IBD SwingTrader stock Cava Group climbed around 16% in heavy volume following the company's higher-than-expected second-quarter earnings and sales. It also raised its 2024 same-store sales guidance. The Mediterranean-themed restaurant chain reached a record high on the stock market today. Shares are extended from an alternate buy point of 98.69. Shares have gained 167% so far this year.
Ross Stores rose 2% after the off-price retailer topped fiscal second-quarter profit and sales forecasts. The stock regained the 153.06 buy point of a flat base after reaching it Wednesday but closing below it Thursday.
Workday soared more than 10% in heavy volume after the software company topped fiscal second-quarter adjusted earnings and revenue projections. The stock retook its 200-day moving average on the stock market today. The stock has underperformed and still has a dismal 21 IBD Relative Strength Rating.
Online pet supplies retailer Chewy got a 1.5% lift after Piper Sandler upgraded the stock to outperform from neutral. Shares are extended from a cup-with-handle base with a 24.17 buy point, according to MarketSurge pattern recognition.
Peloton Interactive reversed higher 2%. The stock opened lower after JPMorgan downgraded the stock to neutral from overweight and lowered its price target to 5 from 17. Shares have lost about 29% so far this year.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
