In a remarkable turn of events on Thursday, Big Tech played a pivotal role in fueling a stock market rally, with Apple (AAPL) showcasing its Apple’s best day since May 2023. The S&P 500 (^GSPC) experienced a notable uptick of 0.9%, and the tech-centric Nasdaq Composite (^IXIC) outshone others by registering an impressive gain of over 1.3%. Meanwhile, the Dow Jones Industrial Average (^DJI) climbed approximately 0.5%. Notably, the S&P 500 is on the verge of reaching its all-time high of 4,796.56.
The surge in the market was predominantly steered by the robust performance of Big Tech stocks following a bullish revenue forecast powered by artificial intelligence from Taiwan Semiconductor Manufacturing Company (TSMC), a crucial supplier to Apple and Nvidia (NVDA). Despite a decline in TSMC’s profit, the results surpassed Wall Street estimates, sparking a positive trend. This, in turn, propelled shares of AMD (AMD) and other chipmakers, with TSMC experiencing a remarkable surge of over 9%.
Adding to the positive momentum, an upgrade from Neutral to Buy by Bank of America acted as a catalyst for Apple’s stock, propelling it more than 3% higher. Investors are optimistic about the prospects of Apple’s new Vision Pro headset, anticipating a boost in hardware sales for the tech giant.
Simultaneously, Atlanta Fed President Raphael Bostic made a noteworthy statement on Thursday, indicating that he does not foresee the Federal Reserve cutting interest rates until the third quarter. This prediction contrasts with the market’s current projection, which anticipates a rate cut in March. Bostic emphasized that a rate cut would only be considered if there is “convincing” evidence of a decline in inflation.
The shift in expectations regarding interest rates is evident in the CME FedWatch Tool, which shows a significant drop of more than 10 percentage points in the probability of a rate cut in March, as perceived by traders. This development reflects the evolving economic landscape and the cautious approach adopted by the Federal Reserve in responding to inflationary pressures.
In conclusion, the stock market experienced a remarkable surge, with Big Tech leading the way, culminating in Apple’s best day since 2023, underscoring the tech giant’s pivotal role in driving the day’s unprecedented gains. The positive outlook fueled by TSMC’s AI-driven revenue forecast and Apple’s potential hardware sales boost, combined with the Federal Reserve’s cautious stance on interest rates, has created an environment of optimism among investors. The coming days will be closely watched as the market navigates through these dynamics, shaping the trajectory of the stock market in the near future.
Source: Yahoo Finance
