US Stock Market Rally Stalls: A Breath-taking Run Hits Pause
London: 13 March 2024 (TraderMade): The US stock market's record-breaking rally has sputtered recently, leaving investors wondering if this is a temporary pause or the start of a correction. While some remain bullish, fueled by strong economic fundamentals and expectations of a dovish Federal Reserve, others see warning signs.
Are Record Highs Sustainable?
- The S&P 500's surge raises concerns about its longevity.
- A high RSI suggests stocks may be overbought.
- Rising investor optimism could be a double-edged sword.
- Hopes of Fed rate cuts are a key support, but a change in stance could trigger a sell-off.
Are We in a Bubble?
Nvidia (NVDA) has been a trusted chipmaker. Its stock price has skyrocketed over 80% in 2024 after tripling in 2023. Some analysts worry this parabolic rise is unsustainable.
Super Micro Computer (SMCI), an AI-focused company, has seen a staggering 300% gain year-to-date and is poised to join the S&P 500. Its rapid rise echoes concerns about frothy valuations in certain sectors.
However, some experts argue that muted IPO activity and reasonable tech valuations suggest a different scenario.
Oracle vs. Boeing: Divergent Fortunes
While some high-flyers stumble, established companies are showing mixed results:
Oracle (ORCL): Bucking the trend, Oracle's stock surged after beating earnings expectations, highlighting the potential for value stocks in a market correction.
Boeing (BA): The aerospace giant's stock plunged after news of a criminal probe, demonstrating how unforeseen events can impact individual stocks.
The Verdict: Pause or Pullback?
The stock market's future trajectory remains uncertain. Investors are closely monitoring economic data, Fed policy decisions, and the performance of individual companies like Nvidia and Oracle to gauge the market's next move. Whether this is a short-lived pause or the beginning of a larger decline is yet to be determined.
