US stock market prediction: Top company's shares to follow in S&P 500, Dow, Nasdaq composite after Labor Day 2024 holiday
US stock market indexes — S&P 500, Dow, and Nasdaq composite — are witnessing broadening rally even as Wall Street will eye key jobs data and the Federal Reserve's expected rate cuts in September after Labor Day 2024 holiday.
As the market's fortunes keep rising and falling with big tech stocks such as Nvidia and Apple, investors are also putting money in less-loved value stocks and small caps, which are expected to benefit from lower interest rates.
Stocks have also held up after an Nvidia forecast failed to meet lofty investor expectations earlier this week, another sign that investors may be looking beyond tech. The equal weight S&P 500 index, a proxy for the average stock, hit a fresh record this week and is up around 10.5 per cent year-to-date, narrowing its performance gap with the S&P 500.
Technology stocks are expected to post above-market earnings growth over every quarter through 2025, with third-quarter earnings coming in at 15.3 per cent compared with a 7.5 per cent gain for the S&P 500 as a whole, as per a Reuters report.
The Fed is expected to kick off a rate-cutting cycle at its monetary policy meeting on September 17-18.
Some investors believe rallies in these sectors and small caps could go further if the Fed cuts borrowing costs while the economy stays healthy.
Meanwhile, the so-called Magnificent Seven group of tech giants — which includes Nvidia, Tesla and Microsoft — have underperformed the other 493 stocks in the S&P 500 by 14 percentage points since the release of a weaker-than-expected
