Stocks Rally Continues; Small Caps Lead as Megacaps Take a Breather
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The stock market rally continued, with the Russell 2000 and S&P MidCap 400 hitting 2023 highs. Industrials, regional banks, chips, and housing stocks were strong winners.
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Adobe plunged on weak guidance, hitting software giants like Microsoft and ServiceNow. Other megacaps like Apple, Nvidia, and Meta also struggled.
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Tesla was the only big winner of the Magnificent Seven, flashing an early buy signal on Monday. Other new buys included Flowserve, Beacon Roofing Supply, and Datadog.
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Small caps and midcaps revving higher while megacaps lag is encouraging. Tech giants pausing is probably healthy given their massive 2023 gains.
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The market rally appears early stage, with some new buying opportunities. But many leading stocks are extended, so don't chase and consider taking some profits.