NASDAQ 100, Dow Jones, S&P 500: July to End with Strong Gains as Rally Expands Beyond Mega-Caps

The Dow Jones, comprising blue-chip stocks, achieved a solid 3.1% increase in July. Notably, the index recorded a 13-day winning streak, matching its longest streak of gains dating back to 1987.

The market’s momentum has broadened beyond mega-cap companies, reflecting a shift in participation. A series of positive economic data in the U.S., easing inflation pressures, and expectations of the Federal Reserve concluding its rate-hiking campaign have contributed to the market’s expansion since early June.

The Federal Reserve raised interest rates, reaching the highest level in over 22 years, and Chair Jerome Powell emphasized the central bank’s data-driven approach, making decisions on a “meeting-by-meeting” basis.

This week, investors are eagerly awaiting the big jobs report. Economists predict that the U.S. economy likely added 200,000 jobs in July, following an increase of 209,000 nonfarm payrolls in June.

Salesforce Downgraded

In recent news, Morgan Stanley downgraded Salesforce, a software company, to equal weight, citing limited near-term catalysts despite confidence in its long-term potential. However, the analyst raised the price target to $278 from $251, suggesting a 23% upside from the previous close. Salesforce shares have had an impressive rally this year, rising more than 70%, though they experienced a 1.5% pullback in the premarket session. The company’s opportunities in artificial intelligence monetization are expected to take some time to materialize.

Earnings season has been strong so far, with approximately 78.7% of the S&P 500 companies surpassing analyst expectations. This performance exceeds the typical quarterly beat rate since 1994, which stands at 66%.

Looking ahead, ON Semiconductor, Arista Networks, and Western Digital are scheduled to report earnings on Monday, while tech giants Apple and Amazon will announce their results later in the week.

As traders keep a close eye on the jobs report and earnings announcements, the market’s recent positive performance and expanding participation continue to generate interest and enthusiasm among investors.