Dovish signals from the Federal Reserve helped the Dow finish at its highest close in history on Dec 13. The Fed’s intention to trim interest rates multiple times next year gave investors hope that the central bank has finally begun to acknowledge a slowdown in price pressures.

And with the Dow poised to continue its winning streak in the near term, it makes all the sense to invest in sturdy blue-chip players like Intel (INTC Quick QuoteINTC - Free Report) , 3M (MMM Quick QuoteMMM - Free Report) and NIKE (NKE Quick QuoteNKE - Free Report) as of now.

Dow Finishes Above 37,000 for the First Time

The Dow is experiencing a remarkable December. The 30-stock blue-chip index surpassed the coveted 37,000 mark on Dec 13 for the first time. The index went past a previous record high set in January 2022, and it has taken 531 trading sessions for the Dow to climb 1000 points to achieve a record close.

The Dow has now been able to bounce back from last year’s dismal performance. In 2022, the 30-stock benchmark tanked 8.8%, its biggest yearly drop since 2008, as the Fed embarked on its aggressive monetary policy to curb stubbornly high inflation.

Fed Hints at Three Rate Cuts in 2024

The Dow, however, gained traction for most of this year, especially in the last trading session after the Fed kept interest rates unchanged in its latest policy meeting and hinted at further rate cuts in 2024.

The Fed has kept interest rates steady at 5.25% to 5.5% for the third time and expects at least three rate cuts next year. The Federal Open Market Committee’s “dot plot” showed chances of further rate cuts in 2025 as price pressures have shown signs of cooling down amid a resilient economy.

Inflationary Pressure Eases

The rise in prices of indispensable goods and services was essentially in line with expectations in November, allowing the Fed to hold rates steady.

The Labor Department reported that the consumer price index (CPI) was up 0.1% month over month in November and increased 3.1% from a year ago. The annual rate, in reality, indicated a decline following a 3.2% rise in October.

The core CPI that primarily excludes the volatile energy and food segments advanced 0.3% monthly and 4% from a year ago. Both the figures came in line with estimates and were little changed from a month earlier.

3 Top Blue Chip Stocks for a Winning Portfolio

Thanks to the Fed’s dovish stance and a likely Santa Claus rally knocking at the door, the Dow is expected to continue its positive momentum. Thus, the companies listed on the index are slated to move northward soon, banking on solid balance sheets, steady cash flows, and large market capitalization.

We have, therefore, selected three blue-chip stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intel is one of the world's largest semiconductor companies. The company continues to dominate the PC market, while its focus on the data center and cloud is driving its profit margins.

Intel has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 55.7% over the past 60 days. INTC’s expected earnings growth rate for next year is 97.9%.

3M operates as a diversified technology firm. 3M is not only rewarding its shareholders but also helping improve its organic growth through its effective supply chain.

3M has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 2% over the past 60 days. MMM’s expected earnings growth rate for next year is 8.8%.

NIKE is engaged in the business of designing, developing and marketing athletic footwear. Nike’s brand strength, ground-breaking products and higher sales of discretionary items are improving its profit margins.

NKE has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.8% over the past 90 days. NKE’s expected earnings growth rate for next year is 16.8%.