NASDAQ Upward Trend Continues, But Fed Meeting Looms
Nasdaq Tech Stocks Drive Rebound, Investors Eye Fed Decision
20th March, New Jersey: The major market indices wrapped up higher on Monday, and the megacap growth stocks like Alphabet and Tesla outperformed the whole market. The NASDAQ, especially with its tech-heavy component led the way, rebounding from its three-day losing streak. However, the weakening of investor sentiment was caused by fears of impending Federal Reserve meeting scheduled for the current week.
It was only after the rumors came out about negotiations with Apple which sought to infuse Google Gemini AI engine into iPhones that Alphabet, a subsidiary of Google, received positive news. Such news brought extraordinary results in the communication services industry that showed an increase of 3% at the end of the day. Tesla shares surged 6.3% post-announcement of impending price hikes for Model Y EVs in select European markets.
AI Enthusiasm vs. Fed Anxiety
Investors were stuck in the middle of their eagerness to explore AI and tech as an opportunity and the fear of another change in the monetary policy. Lindsey Bell, chief strategist at 248 Ventures states that market want to adjust the momentum as it is and the decision taken by the Fed has the most influence on investor sentiment.
Several market observers think that the first rate cut will be either in June or July. However, there is an element of uncertainty among them about the possible delay. Fed’s hawkish stance at Wednesday’s meeting may trigger a stock market correction by tightening monetary policies.
Market Movers and Caution Ahead
Stock indexes rise: Dow Jones up 0.20%, S&P 500 up 0.63%, NASDAQ up 0.82%, influenced by inflation data. Sentiment reversal decreases June rate cut probability from 71% to 51%, reflecting shifting market expectations in a week.
Goldman Sachs now predicts three interest rate cuts in 2024, up from the previous forecast of four, due to inflation. Experts are puzzled by market composition near recent highs, with market cap hovering close to historic peaks. Fed meeting, including high valuations in tech sector, are significant risk elements.
This news is sourced.
