STOCK MARKET SNAPSHOT FOR 13/02/2024
U.S. stocks soared on Monday, propelling the tech-heavy Nasdaq close to its all-time high, as investors eagerly anticipated two significant inflation reports scheduled for the week. In a major development, chipmaker Nvidia surpassed Amazon in value for the first time in two decades.
The Nasdaq surpassed its previous highest closing level in November 2021, inching within a percentage of its all-time intra-day high of 16,212.229. Over the past four months, megacaps with extensive exposure to artificial intelligence have led a rally on Wall Street, fueled by expectations of impending interest rate cuts and positive business outlooks.
The S&P 500, which recently crossed the psychological milestone of 5,000 points, and the blue-chip Dow, both continue to trade at record highs. Leading the charge, Nvidia exceeded Amazon in market capitalization, claiming the position of the fourth-most valuable U.S. company. Nvidia achieved a 2.6% increase, while Amazon experienced a slight dip of 0.4%.
According to Joe Saluzzi, co-manager of trading at Themis Trading, this surge in the semiconductor sector can be attributed to individuals aiming to capitalize on their missed opportunities from the previous year. He stated, A lot of people earlier in the year may have thought we were set for a bit of pullback in the semiconductor sector and it didn’t happen, so it’s certainly people saying, I don’t want to miss the performance like I did last year.
Investors are eagerly anticipating the release of January’s Consumer Price Index (CPI) and Producer Price Index (PPI) this week, which will provide crucial insights into the possibility of monetary policy easing. Additional data to be released includes industrial production, retail sales, and the preliminary University of Michigan consumer sentiment.
Saluzzi believes that a high inflation number might make some investors nervous but anticipates that the Federal Reserve will remain consistent in its approach. He stated, An inflation number that’s really hot might get some investors a bit nervous, but other than that the Fed is going to be in the same mode.
With robust economic indicators, central bankers have effectively responded to traders’ expectations of early rate cuts. According to the CME FedWatch Tool, the likelihood of at least a 25-basis-point rate reduction in May has dropped to 55.8% from over 95% at the beginning of 2024.
Market participants will scrutinize remarks from Federal Reserve officials, including Richmond President Thomas Barkin and Minneapolis chief Neel Kashkari, for any indications regarding the timing of rate cuts.
At 11:57 a.m. ET, the Dow Jones Industrial Average increased by 202.88 points, or 0.52%, reaching 38,874.57. The S&P 500 rose by 19.56 points, or 0.39%, to reach 5,046.17, while the Nasdaq Composite climbed by 74.54 points, or 0.47%, to 16,065.20. The Russell 2000 index, representing small-cap stocks, surged by 1.8%.
In other market movements, energy stocks experienced notable gains, with Diamondback Energy jumping by 10.2%. This contributed to the energy sector’s 1.0% gain on the S&P 500 after Diamondback Energy announced its $26-billion deal to acquire Endeavor Energy Partners, the largest privately held oil and gas producer in the Permian basin.
Additionally, Joby Aviation saw an 8.2% increase as it signed an agreement to launch air taxi services in the Emirate by early 2026. This gain positions the electric-powered aircraft maker for further growth.
Trading on the NYSE favored advancing issues over decliners by a ratio of 4.00-to-1, while the Nasdaq experienced a ratio of 2.45-to-1. The S&P index recorded 45 new 52-week highs and no new lows, while the Nasdaq noted 149 new highs and 29 new lows.
Sources:
– Reuters (Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Maju Samuel)
