Stock Market Today: Stocks Hit New Highs as Rate-Cut Momentum Continues (2024)

The main indexes carved out new record highs Thursday as market participants continued to cheer the Federal Reserve's rate-cut outlook. A solid debut for social media stock Reddit (RDDT) helped lift sentiment too.

The Nasdaq Composite (+0.2% at 16,401), S&P 500 (+0.3% at 5,241) and Dow Jones Industrial Average (+0.7% at 39,781) each notched fresh record closes today, building on the momentum sparked by Wednesday's release of the Fed's "dot plot."

The quarterly forecast showed most central bank officials still anticipate three quarter-point cuts to the federal funds rate this year even after recent economic reports show inflation remains sticky.

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Today's economic data, meanwhile, indicates the economy remains strong, even in the face of elevated interest rates and inflation. Existing home sales, for one, jumped 9.5% in February vs economists' estimate for a 1.3% decline.

Additionally, "both the manufacturing and services segments [of S&P Global's purchasing managers index (PMI)] substantially exceeded the contraction-expansion threshold of 50 [in March]," says José Torres, senior economist at Interactive Brokers.

Today's data "is yet another example of stronger economic performance on the back of a Fed that has essentially accepted that the journey to 2% inflation is too challenging, and frankly, not worth it," Torres adds.

Reddit has a red-hot market debut

In single-stock news, Reddit turned in a strong showing in its market debut. Last night, the social media stock priced its initial public offering (IPO) at $34 per share, the high end of its previous range of $31 to $34. RDDT opened today at $47, hit an intraday high of $57.80, before settling at $50.44.

The surge of interest in the Reddit IPO is due to the platform being a household name and the fact that there's been "a distinct lack of opportunity for investors to get their hands on new listings," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. "The IPO will give Reddit a strong balance sheet to pursue a path towards profitability and growth."

Micron sizzles on blowout earnings

Micron Technology (MU) was another big gainer Thursday, with the memory chipmaker surging 14.1% after earnings. For its fiscal second quarter, Micron reported earnings of 42 cents per share – a vast improvement over its year-ago loss of $1.91 per share. Revenue surged 57.7% year-over-year to $5.8 billion. Industry analysts, meanwhile, were anticipating a per-share loss of 26 cents on $5.3 billion in revenue.

Stifel analyst Brian Chin recently upgraded the semiconductor stock to Buy from Hold, saying the worst is behind MU and the best is yet to come. The analyst believes Micron can break out to higher highs on improvements in supply and demand, and its compelling growth-to-valuation ratio among larger-cap AI stocks.

Apple sheds $112 billion in market value after DoJ lawsuit

Elsewhere, Apple (AAPL) tumbled 4.1%, shedding $112 billion in market cap along the way, after the Department of Justice and 16 state attorneys general sued the tech giant for antitrust violations.

In a press conference, Attorney General Merrick Garland said that Apple is one of the most valuable companies in the world due in part to the success of its iPhone. "But as our complaint alleges, Apple has maintained monopoly power in the smartphone market not simply by staying ahead of the competition on the merits, but by violating federal antitrust law," Garland said, adding that this has been done through restrictions on developers and third-party apps.

The lawsuit will "likely take years" to wind its way through the courts, says Wedbush analyst Daniel Ives (Buy), though it should be considered a "serious matter" given the length of time the DoJ has spent building its case.

"We do not expect any business model changes for now, but Apple clearly is going to have to find a way to eventually settle this case, pay a hefty fine, and ultimately find some compromise with developers on the App Store structure down the road," Ives adds.