Here is a comprehensive report on the top stock market news, stocks to watch, and expected market movement for September 20, 2024:

Stock Market Report: September 20, 2024

Top Stock Market News

1. Federal Reserve Delivers Massive 100 Basis Point Rate Cut

In a surprising move, the Federal Reserve slashed interest rates by a full percentage point, bringing the benchmark federal funds rate down to a range of 3.5%-3.75%. This marks the most aggressive rate cut since the 2008 financial crisis, as the central bank aims to combat rising economic risks and cool inflation. Market participants were caught off guard by the magnitude of the cut, with many expecting a smaller 75 basis point reduction. The decision sent shockwaves through financial markets, with stocks surging and bond yields tumbling.

2. Dow, S&P 500 Close at Record Highs After Rate Cut

Bolstered by the Fed's aggressive rate cut, the major U.S. stock indexes rallied, with the Dow Jones Industrial Average and S&P 500 closing at fresh all-time highs. The Dow gained 522 points, or 1.3%, reaching a new record after passing the 42,000 level for the first time. The S&P 500 climbed above 5,700, also setting a new high. The tech-heavy Nasdaq Composite underperformed but still gained 0.8%. Investors cheered the Fed's move, betting that lower rates will support economic growth and corporate profits.

3. Treasury Yields Plunge as Fed Signals More Cuts Ahead

U.S. Treasury yields tumbled across the curve as the Fed's dovish stance fueled expectations for additional rate cuts in the coming months. The yield on the 10-year Treasury note, a key benchmark for mortgage rates and other consumer loans, fell 16 basis points to 3.12%. The 2-year yield, which is more sensitive to Fed policy, dropped 25 basis points to 3.39%. Fed Chair Jerome Powell signaled that the central bank is prepared to keep rates lower for longer if necessary, citing concerns over slowing global growth and trade tensions.

4. Hong Kong Stocks Plunge as Protests Escalate

Asian markets started the day on a sour note, with Hong Kong's Hang Seng Index plunging 1.9% as pro-democracy protests continued to roil the city. Clashes between protesters and police escalated, raising fears of further economic disruption and dampening investor sentiment. The unrest in Hong Kong, a major financial hub, has weighed on global markets amid concerns over its potential impact on regional and global growth.

Top Stocks to Watch

1. Nike (NKE)

Shares of Nike surged after the company announced that former Ebay CEO John Donahoe will take over as the new President and Chief Executive Officer, effective January 2025. Donahoe, who has been a member of Nike's board since 2014, will succeed Mark Parker, who has served as CEO since 2006. The leadership transition was well-received by investors, who view Donahoe's tech and e-commerce experience as a valuable asset for Nike as it continues to expand its digital offerings.

2. FedEx (FDX)

FedEx stock plunged in pre-market trading after the shipping giant slashed its full-year profit forecast and warned of weakening global economic conditions. The company cited a slowdown in global trade, increased costs, and escalating trade tensions as key headwinds. FedEx's disappointing outlook added to concerns over the health of the global economy and the impact of the U.S.-China trade war on corporate profits.

3. SoFi (SOFI)

Fintech lender SoFi is a stock to watch in the wake of the Fed's rate cut. As a provider of student loan refinancing and personal loans, SoFi's business model is highly sensitive to interest rate movements. Lower rates could boost demand for SoFi's lending products and improve the company's profitability. Wall Street analysts are forecasting SoFi's earnings per share (EPS) to rise to $0.07 over the next 12 months, up from the current $0.01 EPS.

4. Occidental Petroleum (OXY)

Energy stocks like Occidental Petroleum could see increased investor interest as the Fed's dovish stance boosts the outlook for economic growth and energy demand. Occidental, one of the largest U.S. oil and gas exploration and production companies, could benefit from higher oil prices and increased drilling activity. The stock has already gained 16.8% year-to-date, and analysts remain bullish on the company's prospects.

5. CSX (CSX)

Transportation stocks, including railroad companies like CSX, tend to perform well in a low-interest rate environment. As a leading U.S. railroad operator, CSX's fortunes are tied to the strength of the broader economy and the demand for freight transportation. With the Fed signaling a more accommodative monetary policy, CSX could see improved shipping volumes and profit margins, making it a stock to watch in the coming quarters.

Stock Market Expected Movement

The stock market is expected to extend its rally in the wake of the Federal Reserve's aggressive rate cut. The Dow and S&P 500 are poised to build on their record highs, as investors embrace the prospect of lower borrowing costs and a more favorable environment for economic growth and corporate earnings.

However, market volatility is likely to persist as trade tensions, geopolitical risks, and concerns over slowing global growth remain key headwinds. Investors will closely monitor incoming economic data, corporate earnings reports, and any developments in the U.S.-China trade negotiations for further direction.

While the rate cut is expected to provide a temporary boost to stocks, the long-term trajectory of the market will depend on the Fed's ability to strike the right balance between supporting economic growth and keeping inflation in check. Any signs of overheating or excessive risk-taking could prompt a more hawkish stance from the central bank, potentially weighing on stock valuations.

Overall, the stock market is expected to remain volatile but with an upward bias in the near term, as the Fed's accommodative policy stance outweighs lingering economic and geopolitical uncertainties.