Stocks Hold Firm After Inflation Data, Fed Minutes; ADBE, PSN, LII In Focus | Stock Market Today | Summary and Q&A

TL;DR

NASDAQ had a strong finish, led by growth stocks, while major indexes showed mixed performance. Adobe, Parsons, and Lennox International were notable stocks of the day.

Key Insights

• 🎭 Growth stocks are performing well, indicating positive market sentiment.
• ☠️ The FED's rate hike plans are at odds with the market's expectations, suggesting potential divergence.
• 💗 The market's reaction to higher inflation data shows growing confidence in the FED's ability to engineer a soft landing for the economy.
• 🔨 Adobe's AI tools introduced at the Adobe Max conference are garnering market optimism.
• 🛀 Parsons, operating in the defense and intelligence sector, showed strength due to positive qualities and growth acceleration.
• 💪 Lennox International, despite being in a less appealing industry, has a strong stock performance and fundamentals, making it worth watching.
• 🏛️ The upcoming earnings season will affect stock buying decisions, with the importance of building profit cushions before reports.

Transcript

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Questions & Answers

Q: Why did the NASDAQ have a strong finish?

The NASDAQ had a strong finish due to late-session buying, which is favorable during a confirmed uptrend. Mega-cap stocks, particularly in the NASDAQ 100, performed well.

Q: Why did growth stocks show improvement?

Growth stocks showed improvement as there was a drop in the 10-year treasury yield, which positively impacted their prospects. Additionally, the weakening US dollar further supported growth stocks.

Q: How did the market react to the FED minutes and wholesale inflation data?

The market seemed to disagree with the FED's rate hike plans, with the majority of fed funds futures traders foreseeing no more rate hikes this year. Despite higher-than-expected wholesale inflation data, the market appeared to be comfortable with the FED's soft landing approach for the economy.

Q: What are some key levels to watch for in the major indexes?

Resistance levels to watch include the 50-day line for the NASDAQ and the 200-day line for the Dow. The S&P 500 is above its 21-day line, with the 50-day line within reach. Small caps have been struggling but showed some improvement.

Summary & Key Takeaways

• NASDAQ had a strong finish, with the NASDAQ 100 and mega-cap stocks leading the way.

• Growth stocks showed improvement and came back to life after a drop in the 10-year treasury yield.

• The FED's rate raise expectations differ from the market's, which may indicate that the FED's rate hike plans might be done.

• Stock market acted positively despite higher-than-expected wholesale inflation data.