Friday saw the Nasdaq Composite reach a record high, breaking its own high set in 2021 as investors wagered that investing in megacap technology businesses was the best way to take advantage of both the impending growth in artificial intelligence and reducing inflation. The tech-heavy Nasdaq gained 1.14% to 16,274.94, reaching a new session high of 16,302.24. The index closed at its first record level yesterday, November 2021. For its first closing above the 5,100 barrier, the S&P 500 gained 0.80% to close at 5,137.08. The Dow Jones Industrial Average increased to 39,087.38 (up 90.99 points, or 0.23%).
The computing giant Nvidia, which has surged more than 260% in the previous 12 months, led the tech rally and was up 4% on Friday. Meta had a daily increase of over 2% as well. Weekly gains on the Nasdaq were 1.74%, while the S&P 500, which closed at a record on Thursday as well, gained 0.95%. For the last eight weeks, this was both indexes’ seventh positive week. The laggard is the 30-stock Dow, which is down 0.11%. The Nasdaq reached a record close on Thursday, becoming the only major U.S. stock benchmark to do so this year. AI-related enthusiasm has boosted mega-cap tech stocks and the market overall through 2023 and into this year. The Federal Reserve’s subsequent shift toward rate reduction, which are anticipated for later in 2024, together with slowing inflation have also helped the Nasdaq rebound from a challenging 2022.
According to Jamie Cox, managing partner at Harris Financial Group, “we’re seeing this big run-up in tech because there’s a massive emphasis on what it might be—so much emphasis on AI and this big sort-of redux of the late 90s.”
These days, people just ignore the rest of the market. And that usually doesn’t work out well,” Cox continued.
As the ailing regional bank New York Community Bancorp revealed problems with its internal controls and announced a change in leadership, stocks increased. Some investors are worried that the bank’s more than 65% decline in 2024 portends a larger real estate meltdown.