Sarah Travers
Stocks maintained their upward trajectory on Thursday, with major indexes near record highs despite a notable dip in Apple’s stock following news of a lawsuit. The market’s enthusiasm stemmed from the Federal Reserve meeting and Fed Chair Jerome Powell’s remarks on Wednesday, which hinted at anticipated rate cuts in 2024.
Powell indicated the likelihood of three quarter-point rate cuts throughout the year, with a 63.5% probability for a cut at the June 12 meeting. These cuts aim to bring the current federal funds rate of 5.25%-5.5% down to a range of 4.5% to 4.75% by year-end, as the Fed remains committed to achieving a 2% inflation level.
The Dow Jones Industrial Average surged nearly 0.8%, gaining over 300 points, while the tech-heavy Nasdaq and the S&P 500 also saw significant increases of 0.8% and 0.7% respectively. The small-cap Russell 2000 outperformed, rising by 1.2%.
This surge in the market comes on the heels of the four-year anniversary of the pandemic low for major indexes, with remarkable gains seen since then. The Dow has climbed 113%, the S&P 500 surged 134%, and the Nasdaq rallied 139% during this period.
Despite the overall positive market sentiment, Apple’s stock fell by more than 3% after news broke that the Justice Department and 16 states had filed an antitrust lawsuit against the tech giant. The case alleges that Apple’s practices limit competition and stifle consumer choice, particularly concerning its products and software developers.
In the restaurant sector, Olive Garden parent company Darden Restaurants saw its stock plummet by 6% after reporting lower-than-expected sales for its fiscal third quarter. The company also provided a cautious outlook for 2024 revenue and same-store-sales growth, prompting a sell-off.
The cryptocurrency market saw mixed results, with Bitcoin’s price rising above $66,400, impacting related stocks. MicroStrategy, a company with a significant investment in Bitcoin, saw its stock surge nearly 7%, while others like Marathon Digital and Riot Platforms experienced losses.
On the tech front, Microsoft’s stock climbed over 1% to a record high ahead of its “New Era of Work” event, where it discussed artificial intelligence innovations and updates to its Windows and Surface products. Similarly, Nvidia experienced a 2% gain, continuing its upward trend despite starting the last three sessions in the red.
Memory-chip maker Micron stole the spotlight by soaring more than 16% after reporting a surprise fiscal second-quarter profit and higher-than-expected sales. The company’s optimistic outlook for the current quarter further buoyed investor confidence, leading to a record high for its stock.
In other news, apparel retailer Guess surged over 22% after reporting better-than-expected results for its fiscal fourth quarter and announcing a special dividend. Social media platform Reddit was also poised to make its initial public offering on the stock market at $34 per share.
Despite some setbacks in specific sectors, the overall market remained robust, reflecting investors’ confidence in economic recovery and future growth prospects.
