Fed Chairman Jerome Powell hinted at possible interest rate cuts in the rest of 2025 at the central bank’s Jackson Hole Symposium. CME FedWatch predicts a 75% chance of a 25 basis-point cut in September and a 71% chance of two rate cuts this year. The current Fed Fund rate ranges from 4.25-4.5%.

Powell’s speech triggered a surge in Wall Street’s major stock indexes on Aug. 22. The Dow, S&P 500, Nasdaq Composite, and Russell 2000 all posted gains. The Dow closed at a new high of 45,631.74, with intraday trading reaching 45,757.84. Blue-chip stocks like JPM, GS, JNJ, DIS, and MSFT with favorable Zacks Rank are recommended for investment.

The Dow’s momentum is expected to continue with a shift from technology to cyclical sectors like utilities and financials. The Dow’s current level indicates a potential long-term uptrend. Technical analysis suggests a positive outlook for the index based on moving averages. Blue-chip stocks are favored for investment at this stage.

JPMorgan Chase & Co. is projected to experience NII growth driven by business expansion initiatives and loan demand. The company’s investment banking business has shown continued growth despite market volatility. JPMorgan Chase has a Zacks Rank #1 (Strong Buy) with expected revenue and earnings growth.

The Goldman Sachs Group Inc. has experienced growth in the Global Banking & Markets division, reinforcing its position in investment banking. After a slowdown, investment banking revenues rebounded in 2024. The company’s strong deal pipeline and leadership position signal further growth potential. Goldman Sachs has a Zacks Rank #1 with expected revenue and earnings growth.

Johnson & Johnson’s MedTech division focuses on AI-driven surgical robotics and digital surgery analytics. The company’s AI-enabled ecosystem and digital surgery systems are driving growth. Johnson & Johnson has a Zacks Rank #2 (Buy) with expected revenue and earnings growth for the current year.

The Walt Disney Co. is benefiting from Domestic Parks & Experiences revenues and growth in Disney+. The company expects total Disney+ and Hulu subscriptions to increase, driving segment operating income growth. Disney has a Zacks Rank #2 with expected revenue and earnings growth for the current year.

Microsoft Corp. is capitalizing on AI business momentum and Azure cloud expansion. The company’s AI platforms and Copilot products are driving growth and enhancing productivity. Microsoft has a Zacks Rank #2 with expected revenue and earnings growth for the current year.

Read more at Nasdaq: 5 Blue-Chip Stocks to Buy as the Dow Achieves New Milestones