The major indexes continued to string record highs this week, despite some volatility. The Dow Jones Industrial Average (DJI) pulled back sharply before the release of the consumer price index (CPI) for July, but a cooler-than-expected reading pushed the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) to new record closes as interest rate cut hopes soared.
Stocks kept winning as traders eyed the producer price index (PPI) for last month, but optimism faltered as those inflation numbers were hotter than anticipated. Still, the SPX marked a third-straight record close. The DJI hit an all-time high of its own on Friday on the heels of upbeat retail sales data and Warren Buffett's new investment in one of its components. On a weekly basis, all three major indexes were pacing for a second-straight gain.
Big Tech, AI Take Center Stage
Several AI names made noise this week, including C3.ai (AI) with dismal preliminary quarterly results, while SoundHound AI (SOUN) delivered a major profit to Schaeffer’s options bulls. An onslaught of pre- and post-earnings tech updates also brought JD.Com (JD), Applied Materials (AMAT), Palo Alto Networks (PANW), and Sea (SE)into the spotlight.
Dow Stocks to Watch
Not only did Friday usher in an impressive lift from UnitedHealth Group (UNH) thanks to Warren Buffett’s stake, but it handed out a halo lift to healthcare giants Centene (CNC) and Molina Healthcare (MOH). UNH wasn’t the only Dow name in focus this week, with Home Depot (HD) enjoying a pre-earnings pop.
Looking Ahead to Next Week
Next week brings the manufacturing and services purchasing managers' indexes (PMI) for August, in addition to the release of the Federal Open Market Committee's meeting minutes. Retail earnings will also be in focus, with reports coming from BJ's Wholesale (BJ), Lowe's (LOW), Target (TGT), TJX Companies (TJX), and Walmart (WMT), to name a few. As you prepare for what is ahead, dig into why SPX momentum may not be disappearing, after all.
