Daily Stock Market Report - September 12, 2024

Top Stock Market News

1. Stocks Move Higher, Rise Ahead of Fresh Inflation Data

   • Stocks extended their winning streak on Monday, with the S&P 500, Dow Jones, and Nasdaq Composite all closing in the green.
   • The gains came as investors awaited the release of the latest inflation data, which could influence the Federal Reserve's decision on interest rates at its upcoming meeting on September 17-18.
   • Analysts expect the Fed to raise rates by another quarter-point, but the magnitude of the increase will depend on the inflation numbers.

2. Next Week, Interest Rates May Do Something They Haven't Done Since 2006

   • At the Federal Reserve's upcoming policy meetings on September 17-18, interest rates may rise for the 22nd consecutive time, a feat not seen since 2006.
   • This sustained rate hike cycle has been the Fed's primary tool in battling persistent inflation, which has been stubbornly high in recent months.
   • The markets will be closely watching for clues about the Fed's future rate hike plans, as well as any comments from Chair Jerome Powell regarding the state of the economy.

3. Nvidia Surges 12% as Fed, Powell Pave Way for September Rate Cut

   • Nvidia's stock soared 12% on Monday, riding the wave of optimism that the Federal Reserve may slow its pace of rate hikes in September.
   • Investors are betting that a potential rate cut could provide a boost to the tech sector, with Nvidia being a major beneficiary due to its strong position in the AI market.
   • However, some analysts warn that the market's enthusiasm may be premature, as the Fed has maintained a hawkish stance on inflation.

4. Rout in Technology Companies Drags Down Stock Market

   • On the flip side, a selloff in technology stocks weighed heavily on the broader market on Monday.
   • Traders are gearing up for this week's inflation data, which could influence the Fed's decision on interest rates.
   • The tech-heavy Nasdaq Composite bore the brunt of the selling pressure, underscoring the sector's sensitivity to changes in monetary policy.

Top Stocks to Watch

1. CRA International, Inc. (CRAI)

   • This management consulting company carries a Zacks Rank #1 (Strong Buy) and has strong growth characteristics, making it a stock to watch for investors today.

2. Affirm Holdings, Inc. (AFRM)

   • The payment processing company has seen the Zacks Consensus Estimate for its current year earnings rising, earning it a Zacks Rank #1 (Strong Buy) and placing it on the radar for potential investors.

3. Nvidia (NVDA)

   • Nvidia's stock has been a proxy for the market's AI enthusiasm for over a year, and its recent surge on optimism about a potential Fed rate cut has made it a stock to watch closely.

4. Apple (AAPL)

   • After a rough start to the year, Apple's stock has rebounded, and the company's AI strategy is under scrutiny, making it a stock to keep an eye on in September.

5. Broadcom (AVGO)

   • The semiconductor giant is scheduled to report quarterly earnings on September 5, and its report could test the stock's substantial year-to-date gains, making it a stock to watch this month.

Stock Market Expected Movement

Based on the recent market trends and the upcoming economic data releases, analysts expect the stock market to remain volatile in the near term. Here are some key factors that could influence market movement:

1. Inflation Data: The highly anticipated inflation data, scheduled for release this week, will play a crucial role in shaping the Federal Reserve's decision on interest rates. If inflation remains stubbornly high, the Fed may opt for a more aggressive rate hike, which could put pressure on stocks, particularly in the tech sector.

2. Federal Reserve Meeting: The Fed's two-day policy meeting on September 17-18 will be closely watched by investors. Any hints about the central bank's future rate hike plans or comments from Chair Jerome Powell could significantly impact market sentiment.

3. Earnings Reports: With companies like Broadcom scheduled to report quarterly earnings, positive or negative surprises could lead to significant stock price movements, not only for the reporting companies but also for their respective sectors.

4. Geopolitical Tensions: Ongoing conflicts and geopolitical tensions, such as the Russia-Ukraine war and the current issues in Israel, could introduce market uncertainty and volatility, affecting investor sentiment and risk appetite.

5. Economic Data: In addition to inflation data, other key economic indicators, such as consumer confidence, retail sales, and manufacturing data, will be closely monitored for clues about the overall health of the economy and its potential impact on corporate earnings.

Overall, while the stock market has shown resilience in the face of various challenges, investors should brace for continued volatility as they navigate the upcoming economic data releases, central bank decisions, and geopolitical developments.