Wall Street Prepares for Rally as Tech and Growth Stocks Lead the Charge

Wall Street is gearing up for a positive start on Wednesday, with the main stock indexes set to rise as chipmakers and growth stocks regain momentum in light trading. This resurgence comes ahead of pivotal economic data releases, Federal Reserve commentary, and an extended holiday weekend.

After experiencing three consecutive declines, both the Dow and the S&P 500 are expected to bounce back today. The recent downturn was marked by pressure on most megacap stocks and a struggle to sustain upward momentum in the market.

Investor attention is focused on remarks from Fed Board Governor Christopher Waller, scheduled to address the Economic Club of New York later in the day.

Key economic indicators, including the Personal Consumption Expenditures Price Index (PCE), are anticipated, with the PCE due to be released on Good Friday, coinciding with the closure of the U.S. stock market. Any unexpected rise in inflation could temper market optimism regarding potential early rate cuts.

This week also sees the release of the final fourth-quarter GDP figures, the University of Michigan's consumer sentiment reading, and weekly jobless claims data.

The optimism driving the market stems from recent gains fueled by artificial intelligence (AI) and expectations of future Fed interest rate cuts.

Traders are currently assigning a 70% probability to the Fed initiating its easing cycle in June, according to the CME FedWatch tool.

Robert Pavlik, senior portfolio manager at Dakota Wealth Management, commented, "The market is just doing a little bit of consolidation... people are just wondering what's the next catalyst to drive stock prices." He emphasized the continued focus on AI, particularly in the technology sector and semiconductor companies.

In pre-market trading, Dow e-minis were up 145 points, S&P 500 e-minis rose by 18.25 points, and Nasdaq 100 e-minis increased by 70.25 points.

Growth stocks, particularly in the megacap category, showed positive movement before the opening bell. Tesla gained around 1%, while AI leader Nvidia advanced 0.5%. Additionally, several chip stocks saw gains, with Micron Technology and Marvell Technology among the notable performers.

Biotech firm Moderna surged 3.9% following news of a significant funding agreement with Blackstone's life science investment platform. Merck & Co also saw a notable increase of 5.2% after receiving FDA approval for its therapy targeting high blood pressure.

Trump Media & Technology Group experienced a remarkable 13.2% jump following its successful Nasdaq debut, while Robinhood Markets climbed 7% after launching a new credit card.

However, GameStop faced an 18.1% decline after reporting lower fourth-quarter revenue and announcing job cuts as part of cost reduction measures.

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