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David Russell
September 17, 2024

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Sellers are disappearing into thin air as investors prepare for the Federal Reserve to cut interest rates for the first time since the pandemic.

The S&P 500 surged 4 percent between Friday, September 6, and Friday, September 13. It was the biggest weekly gain since the index started rallying 10 months ago. The Nasdaq-100 had an even bigger move, advancing 5.9 percent.

Relief about semiconductors connected to the AI boom helped trigger the rally.

“We are ramping Blackwell and it’s in full production,” Nvidia (NVDA) CEO Jensen Huang said on Wednesday. That eased worries that a key chip for accelerated computing would be delayed. “We’ll … start scaling in Q4 and into next year… the demand on it is so great,” he added.

 

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Some of the move likely resulted from overly bearish sentiment. S&P Global reported that risk appetite hit a 16-month low in September. The American Association of Individual Investors cited the least bullishness in over three months and the National Association of Active Investment Managers noted stock exposure was near its lows of the year.

Those conditions may not be a surprise because every September has been negative since 2020. The two months preceding U.S. Presidential elections have also been periods of weakness for the market.

 

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About the author

David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.