After trailing the other stock indices for much of 2023, the blue-chip Dow Jones Industrial Average caught fire to close out the year. Ever since the U.S. Federal Reserve telegraphed three interest rate cuts in 2024, the Dow broke above 37,000 and hit successive new all-time highs. For the year, the index is up 12% and climbing. The run comes as the stock market rally broadens beyond technology stocks to include more blue-chip names. Despite the big run over the past few weeks, there is reason to believe the current rally has legs and is likely to continue into the new year. Here is why these three Dow stocks should be on your radar in 2024.
Apple (AAPL)
Shares of consumer electronics giant Apple (NASDAQ:AAPL) have done well in 2023 despite several challenges. AAPL stock has gained 56% in 2023 and is trading near its all-time high of just under $200 per share on a split-adjusted basis. With a $3 trillion market capitalization, Apple remains the biggest publicly traded company in the world. Success has been achieved despite slowing sales of its devices, notably the iPhone, and a recently announced pause in the sale of some Apple Watches over a patent dispute.
Heading into 2024, several catalysts on the horizon should vault AAPL stock over the $200 per share threshold and into new all-time highs. These include the upcoming launch of its Vision Pro virtual reality headset — the company’s first entirely new product in a decade. There’s also the continued growth of its services business lines, including streaming and payments, and Apple’s push into artificial intelligence (AI). Analysts expect the company to announce new AI products in the year ahead.
Chevron (CVX)
Oil prices have been a bit topsy-turvy in 2023, but are marching higher as we close out the year. Currently, West Texas Intermediate (WTI) crude oil, the U.S. standard, is trading back near $75 a barrel. That’s good news for U.S. oil major Chevron (NYSE:CVX). The past year has been a tough one for Chevron stockholders because of the drop in oil prices. CVX stock is down 14% on the year and nearly 20% below the peak it reached in November 2022 when the oil market was booming following Russia’s invasion of Ukraine.
As we move into 2024, there’s reason for hope with CVX stock. Not only is the price of crude oil trending higher, but many analysts see the price running up to $85 a barrel or higher in the coming year. Additionally, Chevron is in the process of acquiring former rival Hess (NYSE:HES). The $53 billion deal is expected to bolster Chevron’s oil and natural gas exploration and production businesses, as the two companies have complementary businesses.
American Express (AXP)
Consumer spending held up well in 2023 despite elevated interest rates, and spending on travel is back to pre-pandemic levels. That explains why American Express (NYSE:AXP) stock gained 23% over the past year. With interest rates likely to come down in 2024, consumer spending and credit card use will likely rise even further, pushing AXP to new heights. The company’s earnings show continued strength amid rising spending levels.
American Express reported a Q3 profit of $2.45 billion, or $3.30 per share, well ahead of the $2.96 Wall Street analysts had penciled in for the company. AXP said its Q3 earnings got a boost from spending on the part of its wealthy clientele, who continue to shrug off worries about a recession. The company’s results also got a lift from strong spending on leisure travel as more people take vacations after the COVID-19 pandemic. More growth should come in 2024.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
