Topline
The tech-heavy Nasdaq hit a 14-month high Friday, largely driven by massive gains from a handful of the widely-tracked tech index’s largest companies, while the Dow Jones Industrial Average is set for its best day in five months as optimism is aplenty on Wall Street.
Key Facts
The Nasdaq Composite rose to as high as 13,252 in morning trading, its highest level since April 21, 2022, wiping out what was once as steep as a 40% loss last year as investors dumped rate-sensitive tech stocks as the Federal Reserve hiked interest rates to their highest level since the mid-2000s.
But largely resilient earnings and unfettered optimism about what artificial intelligence could mean for future bottom lines helped the Nasdaq surge 27% so far this year, far outpacing the S&P 500 and Dow Jones Industrial Average’s 12% and 2% year-to-date gains, respectively.
Buoying the Nasdaq’s recovery are the mega-cap companies largely generating the biggest AI buzz; chipmakers Nvidia and AMD and generative AI leaders Alphabet and Microsoft are each up more than 40% year-to-date.
The Nasdaq’s milestone Friday came amid a strong day overall for stocks, as the S&P and Dow each gained more than 1% after government data revealed a strong labor market.In fact, the Dow’s 600-point gain marks its best day since January 6.
Big Number
$3.6 trillion. That’s how much market cap the seven biggest companies listed on the Nasdaq (Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta) have gained in 2023.
Key Background
The U.S. economy “is not showing strong signs” that a recession will come this year, Oanda analyst Ed Moya declared Friday, saying steady output and consumer spending is “short-term good news for the stock market.” The Nasdaq is coming off of its worst year since 2008 after it crashed 33%, losses that far outpaced the Dow’s and S&P’s. Fueling the tech investor fire was the November release of the viral, Microsoft-backed ChatGPT AI chatbot, which led to a spike in investments in generative AI developments and the hardware powering the technology.
Surprising Fact
The CBOE VIX Index, a volatility metric which acts as a “fear gauge” for Wall Street, sank nearly 6% Friday to its lowest level since February 2020, shortly before pandemic lockdowns.
Nvidia Hits $1 Trillion Market Value (Forbes)
These 7 Tech Stocks Command Almost 90% Of The S&P 500’s Gains—Signaling Market Rally May Not Be So Healthy (Forbes)
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