Dow hits record close amid market volatility

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— ET Now Swadesh (@ETNowSwadesh) September 20, 2024

The Dow Jones Industrial Average marked another record close today, while the Nasdaq and S&P 500 ended lower after yesterday’s post-Federal Reserve rally. The Dow got a boost from speculation about an Intel takeover. The index turned positive by about eight points after a report citing people familiar with the matter. Intel stock spiked more than 9%, recently up 7% from yesterday’s close to $22.58. This movement translated to a nearly 14-point swing for the Dow.

The S&P 500 is up 19.6% in the first 182 trading days of 2024, the 17th best start to a year going back to 1928. $SPXhttps://t.co/mpJBYGzfJ0 pic.twitter.com/jPF5ziCBoV

— Charlie Bilello (@charliebilello) September 20, 2024

Unlike other indexes, the Dow often misses out on AI-driven rallies from companies like Nvidia and Super Micro Computer because Intel is the only chip stock in this index. The S&P 500 and the Nasdaq Composite both experienced minor declines, down 0.2%. The gains in the Dow faded as the stock market encountered a volatile session. The blue-chip index was down 18 points, or less than 0.4%, after trading higher earlier in the day.

The S&P 500 closed at an all-time high for the 39th time this year. $SPXhttps://t.co/mpJBYGzfJ0 pic.twitter.com/14vZxxrPol

— Charlie Bilello (@charliebilello) September 19, 2024

Dow climbs despite market turbulence

The S&P 500 and Nasdaq Composite were down 0.4% and 0.5%, respectively, influenced by mixed comments from Federal Reserve officials and the quirks associated with a triple-witching day. Federal Reserve Governor Christopher Waller provided an optimistic outlook on the central bank’s progress on inflation, contrasting with more hawkish comments from Governor Michelle Bowman who dissented against the central bank’s half-point rate cut, preferring a quarter-point cut instead. Bowman expressed concern that the larger policy action could be seen as a premature declaration of victory on their price stability mandate. The market volatility was also heightened by the expiry of stock options, stock index futures, and stock index options, which generally adds to market volatility. As the week wrapped up, the S&P 500 is facing what analysts predict could be its worst week of the year. Even though the index is up 1% so far this month, historically, September has been a challenging month. Next week, the market faces a slew of Federal Reserve speakers and key economic and inflation data, posing significant hurdles. Analyst Jay Kaeppel points out that the market tends to decline the week after the third Friday in September, evidenced by historical data showing declines for 27 of the last 34 years and only 35 up weeks since 1920. Kaeppel advises short-term traders to watch for any sign of a downside reversal as a potential short-term trade opportunity and for long-term investors to exercise patience in anticipation of a slightly better buying opportunity soon. Overall, the stock market is poised for a challenging period ahead with significant events and data that could influence market direction.