Nasdaq and S&P 500 Set New Records Amid Tech Surge

The financial markets hit a significant milestone on Thursday, with both the Nasdaq composite index and the S&P 500 setting new record highs.

by Faruk Imamovic
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Nasdaq and S&P 500 Set New Records Amid Tech Surge
© Getty Images/Michael M. Santiago

The financial markets hit a significant milestone on Thursday, with both the Nasdaq composite index and the S&P 500 setting new record highs. This remarkable achievement comes amid a surge in tech and artificial intelligence stocks, coupled with encouraging economic indicators that suggest a cooling inflation rate.

A Day of Records

The Nasdaq composite closed at an unprecedented high of 16,091.92, surpassing its previous record set in November 2021 by about 35 points. This was before the Federal Reserve embarked on a series of interest rate hikes aimed at curbing inflation.

The S&P 500 wasn't far behind, gaining 0.5% to close at a new peak of 5,096.27, topping its most recent high earlier this month. Meanwhile, the Dow Jones Industrial Average saw a modest increase, ending the day up 47 points or 0.1%.

This surge in the stock market is partly attributed to the performance of chipmakers and artificial intelligence stocks, which have seen significant gains. Additionally, fresh data indicating a slowdown in inflation has contributed to the bullish sentiment among investors.

Inflation and Fed's Stance

The Personal Consumption Expenditures price index, the Federal Reserve's preferred inflation gauge, showed a 2.4% increase for the 12 months ending in January, decelerating from December's 2.6% rise.

This news arrives as the Fed maintains interest rates at their highest in 23 years, signaling a cautious approach to rate cuts. Chicago Fed President Austan Goolsbee's comments further buoyed the markets. Speaking at a Council on Foreign Relations event in New York, Goolsbee suggested that a temporary uptick in inflation would not deter the Fed's trajectory towards its inflation target.

He advocated for a proactive approach to rate cuts, even before inflation strictly hits the 2% mark on a 12-month basis.

A Promising Start to the Year

The stock market concluded February on a high note, with the S&P 500 up by 5.2% for the month, the Dow by 2.2%, and the Nasdaq by 6.1%.

All S&P 500 subsectors reported gains, continuing a trend that has seen the index advance for 16 of the last 18 weeks—a streak not seen since 1971. The tech-heavy Nasdaq Composite has risen approximately 7.2% year-to-date, following a 43% surge in 2023, fueled by optimism that the Fed might manage to reduce inflation without precipitating a recession.

Notably, Nvidia's stock climbed an additional 1.9% on Thursday, marking a near 250% increase from the previous year. Furthermore, Bitcoin approached its all-time high, briefly surpassing the $64,000 threshold. The introduction of spot bitcoin ETFs has played a crucial role in driving the cryptocurrency's value to levels last observed in 2021, signaling a robust interest in digital currencies alongside traditional stock investments.

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