Wall Street had itself a very good week, with the Dow Jones Industrial Average popping 2% for its biggest weekly gain of 2024. This surge drove the 30-stock benchmark to an all-time high, putting it within striking distance of 40,000. The S & P 500 and Nasdaq Composite also saw significant gains, rising 2.3% and 2.9% respectively to record levels.
These impressive gains came after the Federal Reserve indicated it remained on track to cut interest rates three times this year. Fed Chair Jerome Powell reassured investors that a strong labor market wouldn’t deter the central bank from cutting rates, leading to a positive outlook for the market.
Investors are now faced with the question of how to navigate a market trading at record levels, with the bulk of the gains coming from artificial intelligence stocks. Blair Boyer, co-head of large cap growth equity at Jennison, shared his investment approach of finding companies that can fund new ways to grow. He highlighted companies like Advanced Micro Devices, Meta Platforms, and Visa as potential opportunities for investors.
Analysts also reiterated their bullish views on Nvidia, with Goldman Sachs raising its price target on the AI play to $1,000 after the company unveiled its Blackwell graphics processing units. JPMorgan noted that Nvidia’s position in the AI space is solidified, making it well-positioned to benefit from major trends in AI, high-performance computing, gaming, and autonomous vehicles.
Another area of interest for investors is small caps, with Fundstrat’s Tom Lee expecting the Russell 2000 to rally 50%. With a dovish pause from the Fed and CEOs becoming more confident, Lee believes the Russell 2000 represents a strong opportunity for investors.
General Electric also presents an interesting opportunity, with the industrial giant’s power business set to be spun off from its aerospace operations in the coming weeks. The company’s stock has surged 38% this year in anticipation of the spinoff, making it a stock to watch for investors looking for potential growth opportunities.
