The first half of 2024 saw a strong performance in the stock market, with the S&P 500 index gaining 14.5%. The Dow Jones Industrial Average rose 3.8% and the Nasdaq Composite climbed 18.1%. The Magnificent Seven big tech names, with Nvidia (NVDA) as the leader, were a major driver of these gains.
Despite concerns about inflation, the Federal Reserve has not yet cut interest rates from their current 23-year high. Investors now expect the Fed to cut rates up to three times in 2024, according to the CME FedWatch Tool. Fresh data showing a slowdown in inflation has given traders hope for the future.
Kevin Gordon, senior investment strategist at Charles Schwab, believes that the stock market rally can continue as long as the market catches its breath. However, Gordon also warns about the risk factors, including any continued divergence in market breadth or a sharper slowdown in the labor market that could prompt the Fed to start an aggressive cutting cycle.
In other news, Warren Buffett has changed his will to no longer donate to the Bill & Melinda Gates Foundation after his death, choosing instead to put his wealth in a new charitable trust overseen by his three children. The housing market may continue to be challenging for first-time homebuyers, as Bank of America economists predict high home prices and a persistent housing shortage until 2026 or later.
