Stocks finished Monday on a positive note, with all three main indexes building on last week's impressive gains. Market participants are upbeat that this week's heavy slate of Federal Reserve speakers – including Fed Chair Jerome Powell – will give clues on when the central bank will start cutting interest rates and by how much.
Indeed, investors will be keeping a close eye on the Federal Reserve, with several central bank officials scheduled to speak. Most notable is Powell, who will take the mic on Friday during the Jackson Hole Economic Symposium.
The appearances of Fed officials at Jackson Hole have been known to spark volatility in the stock market. In 2022, for instance, stocks fell dramatically after Powell warned higher interest rates would create "pain" for households and businesses.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This time around, he's expected to stick to his script from the July Fed meeting. However, one "evolution of the July FOMC language would suggest the committee is 'very close' or 'close' to the point where easing is likely to occur," says Michael Gapen, head of U.S. economics at BofA Global Research.
"A more dovish signal could be a statement that the committee wants to avoid 'unexpected weakness' in the labor market [particularly in the wake of the July jobs report], rather than simply responding to it after it occurs," Gapen adds.
AMD buys ZT Systems for $5 billion to expand AI capabilities
In single-stock news, Advanced Micro Devices (AMD) jumped 4.5% after the chipmaker said it is buying cloud-computing infrastructure firm ZT Systems in a cash-and-stock deal valued at $4.9 billion.
"Our acquisition of ZT Systems is the next major step in our long-term artificial intelligence (AI) strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers," said Advanced Micro Devices CEO Lisa Su in the press release.
What's more, AMD's purchase of ZT Systems allows it to challenge Nvidia's (NVDA, +4.4%) dominance in the AI data center chip market "by enhancing their ability to accelerate adoption to directly compete with Nvidia's popular graphics processing units (GPUs)," says Mark Perez, chief investments officer at Linqto. " This acquisition better equips AMD to compete with Nvidia's integrated approach, potentially offering a similar end-to-end solution and capturing a larger share of the AI infrastructure market."
Perez adds that M&A activity in the AI space is just starting to heat up as many venture-backed AI firms were funded at unsustainable valuations.
GM stock rises after latest round of layoffs
General Motors (GM) rose 1.0% after CNBC said the automaker is cutting 1,000 jobs in its software and services unit. The layoffs come as GM "prioritizes investments that will have the greatest impact," according to the report.
The news follows last week's headlines that GM is cutting staff in China and could meet with SAIC Motor, its joint venture partner, to discuss lowering production capacity.
Argus Research analyst Bill Selesky (Buy) says that General Motors' efforts to promote "capital spending discipline, a recalibrated product strategy, and an enhanced cost reduction program" are "impressive as it demonstrates that the GM management team is both financially flexible and strategically long-term focused."
McDonald's pops on new price target
McDonald's (MCD) was another big winner, climbing 3.3% to make it the best Dow Jones stock today. Boosting the blue chip was a bullish note from Evercore ISI that said it is growing "increasingly bullish" on MCD's domestic business over the next year or so.
Evercore analysts maintained an Outperform (the equivalent of a Buy) rating on McDonald's and lifted their price target to $320 from $300, representing an implied upside of 11% to current levels.
As for the main indexes, the Nasdaq Composite was up 1.4% at 17,876 and the S&P 500 was 1.0% higher at 5,608. It was the eighth straight win for both indexes, the longest daily win streak since December for the Nasdaq and the lengthiest one for the S&P 500 since November.
The Dow Jones Industrial Average gained 0.6% to 40,896, marking its fifth consecutive gain.
Related content
- Kiplinger's Economic Calendar for This Week
- Earnings Calendar and Analysis for This Week
- Is Market Risk Holding Your Retirement Nest Egg Hostage?
-
AI Goes To SchoolThe Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
Where to Invest in an Uncertain Market
In an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
