Nasdaq 100 Increases by 1% due to Tech Surge: Market Overview
The stock market witnessed an uplift driven primarily by major tech players, although rising Treasury yields limited the gains, especially as a key speech from Federal Reserve Chair, Jerome Powell, approaches.
Following its most extended period of weekly declines since February, the S&P 500 experienced a rebound. Meanwhile, the Nasdaq 100 marked a 1% rise. Notably, Nvidia Corp. (NVDA) , a major player in the recent AI-driven stock surge, saw its stocks soar by nearly 6%. The semiconductor company is gearing up to present its results this Wednesday. Tesla Inc. (TSLA) broke its pattern with a recovery from a six-day decline. On the contrary, a downturn in the stocks of healthcare conglomerate Johnson & Johnson (JNJ) affected the Dow Jones Industrial Average.
Bonds continued their downward trajectory, driven by evidence of a robust economy, leading to expectations of sustained high rates. For the first time since 2009, the yield on 10-year inflation-protected Treasuries exceeded 2%. Shortly after, 10-year note yields without such protection reached a point last observed in late 2007.
The forthcoming address by Powell at the Jackson Hole Economic Policy Symposium by the Kansas City Fed is highly anticipated. This is especially so after the recent rate increment to between 5.25% and 5.5%, marking a 22-year peak. Meeting minutes revealed policymakers’ concerns about persistent inflation rates, which could result in maintaining the elevated rates.
Historically, addresses by Federal Reserve leaders at Jackson Hole have positively impacted stocks. However, traders vividly remember last year when stocks fell by 3.2% post-Powell’s comments, where he emphasized stringent policies to combat inflation.
In other business news, Nikola Corp. (NKLA) faced a dip in stocks after signaling potential challenges in meeting its annual delivery goals due to recent battery-related issues. Meanwhile, Broadcom Inc.’s (AVGO) massive $61 billion acquisition of VMware Inc. received the green light from the UK’s antitrust body, setting the stage for one of the grandest tech mergers in history. In contrast, cybersecurity enterprise Palo Alto Networks Inc. (PANW) witnessed a stock surge, forecasting annual billings surpassing initial Wall Street projections.
