Today’s Flat Nasdaq May Be Good News for Investors
Stocks climbed on Friday and remained high as the week started with a resilient rally that could continue.
Quick overview
- After a surge following Fed Chairman Jerome Powell's comments, major indices like the Nasdaq, Dow Jones, and S&P 500 remained mostly flat but retained their gains.
- The Nasdaq Composite is up just 0.01%, while the Dow Jones and S&P 500 saw slight increases of 0.05% and 0.03%, respectively.
- Market sentiment remains optimistic, with expectations that the Nasdaq could climb to its previous August high of around 21,600 points.
- A potential interest rate cut from the Federal Reserve in September could further support the ongoing market rally.
After Fed Chairman Jerome Powell started a market surge, the indices remained mostly flat Monday and Tuesday, holding onto the gains they made.
The Nasdaq Composite is up just 0.01% today, retaining the progress it made on Friday after the Fed meeting. The Dow Jones likewise remains mostly flat with just a 0.05% increase, and the S&P 500 is up only 0.03%. These indices show a steady and resilient market that is not backing down from the strong upward shift from late last week.
It was expected that the bullish stock market action from Friday would be followed by a retreat, but that has not been the case. The Nasdaq index rose from 21,098 points to 210,545 on Friday after Powell suggested a possible interest rate cut and said positive things about the United States economy.
Then, that shift upward remained, staying around 21,540 on Monday and remaining close to the same level on Tuesday as the markets opened. Now, this is particularly exciting for stock market investors since the markets trended downward in the week leading up to the important Federal Reserve meeting. The Nasdaq has made back nearly all of those lengthy losses caused by mounting fear over sticky inflation, new tariffs, and the possibility that there would be no new interest rate cut.
The Market’s Bullish Potential
For now, the market sentiment is very optimistic. The Nasdaq and other indices are likely to keep on climbing this week. That is even more likely today than it was on Monday since there has been no market retreat.
We could see the Nasdaq climb to its previous August high of around 21,600 points and then move higher on the hope of a new interest rate cut. Several pharmaceutical companies are doing extremely well today on the exchanges, and a number of key tech companies are holding steady after gaining quite a bit from Friday’s surge.
The Federal Reserve will likely issue a rat cut in September, and that could help the stock market’s current rally last even longer. This is historically what has happened with interest rate cuts, although the surge created by the rate cut may be short lived. There has been no rate cut in nine months, so the market is ready for one, and even leading up to that possible cut, we should see the market rally.
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