Wall Street had itself a very good week, with the Dow Jones Industrial Average popping 2% for its biggest weekly gain of 2024. This surge drove the 30-stock benchmark to an all-time high, putting it within striking distance of 40,000. The S & P 500 and Nasdaq Composite also saw significant gains, rising 2.3% and 2.9%, respectively, to record levels.
These impressive gains came after the Federal Reserve indicated it remained on track to cut interest rates three times this year. Fed Chair Jerome Powell reassured investors that a strong labor market wouldn’t deter the central bank from cutting rates. With the market trading at record levels, the question now is how to navigate a landscape where the bulk of gains are coming from artificial intelligence stocks.
One investor who has successfully navigated the recent rallies in Nvidia and Microsoft is Blair Boyer, co-head of large cap growth equity at Jennison. Boyer shared his investment approach, which focuses on finding companies that can innovate and reinvest in their business to drive growth. He highlighted Advanced Micro Devices, Meta Platforms, and Visa as potential opportunities for investors.
Analysts also reiterated their bullish views on Nvidia, with Goldman Sachs raising its price target on the AI powerhouse to $1,000. JPMorgan noted that Nvidia’s recent announcement of its Blackwell graphics processing units solidifies its position in the AI space.
In addition to AI stocks, small caps could also be of interest to investors. Fundstrat’s Tom Lee expects the Russell 2000 to rally 50% this year, citing a dovish Fed stance and increased CEO confidence as potential drivers of growth. The small-cap Russell 2000 rose 1.6% this week, with the iShares Russell 2000 ETF tracking its performance.
General Electric is another company that could present an interesting opportunity for investors, as its power business is set to be spun off from its aerospace operations in the coming weeks. The industrial giant’s stock has surged 38% this year in anticipation of the spinoff, and it will trade as GE Vernova on the New York Stock Exchange.
Overall, Wall Street’s strong performance this week has investors looking for opportunities in both AI stocks and small caps, as they navigate a market trading at record levels.
