The Dow Jones Industrial Average experienced significant gains on Monday, despite rising yields. Cathie Wood, a renowned fund manager, took advantage of the market dip to purchase potential bargains for Ark Invest. Meanwhile, Microsoft and Amazon.com joined a prestigious list of stocks, showcasing promising performance. However, Tesla witnessed a sharp decline. Furthermore, Ollie’s Bargain Outlet, FTAI Aviation, and NetEase demonstrated relative strength as they sought entry points.
Despite the increase in Treasury yields prior to the Federal Reserve meeting, stocks rallied. The Nasdaq, particularly dominated by technology companies, rose 1.2%. However, On Semiconductor faced a decline of approximately 21.8% after disappointing Wall Street with its outlook. The S&P 500 also experienced a 1.2% boost, with Western Digital gaining 7.3% as it announced plans to spin off its flash memory business. Communication services, financials, and consumer staples performed well, while energy made the smallest gain. Small caps underperformed, but the Russell 2000 still rose by 0.6%.
Among the major indexes, the Dow Jones industrials fared the best as it saw a rise of 511 points, or 2%. McDonald’s stock experienced a flurry of buying and ended the session 1.7% higher. Nike, Verizon Communications, and Goldman Sachs also witnessed solid gains. On the other hand, Walgreen Boots Alliance was the worst performer on the Dow Jones, experiencing a minor decline of 0.2%.
Cathie Wood used the recent market pullbacks to purchase potentially undervalued stocks, such as Block, Beam Therapeutics, and Verve Therapeutics. However, these stocks currently trade below their 50-day and 200-day moving averages, indicating a bearish outlook. While bargain hunting may be tempting, IBD recommends investing in stocks with strong earnings and price performance. Additionally, Microsoft and Amazon.com made it onto the IBD Leaderboard Watchlist, reflecting their positive performance and potential entry points. Tesla, however, experienced a notable decline, closing near its lows for the day. Other stocks showing strength include Ollie’s Bargain Outlet, FTAI Aviation, and NetEase, which are all building bullish bases and demonstrating strong relative strength.