1/9/2024

Nasdaq closes higher for first time in 2024

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Key points:

  • On Monday, January 9, 2024, US stock markets closed higher, including the Nasdaq Composite, which gained at least 1% for the first time in 2024.
  • The market’s gains were driven by a drop in Treasury yields, which helped lift large-cap stocks, including technology companies.
  • The S&P 500 energy index was the only loser among the 11 S&P 500 sectors, falling 1.16% after hitting its lowest level in a month as crude oil prices lost about 4%.

On Monday, the tech-heavy Nasdaq Composite Index recorded its first positive session of 2024, gaining over 1%. This surge was driven by a decline in Treasury yields, which boosted sentiment towards large-cap technology stocks. However, a sharp drop in Boeing shares limited gains for the Dow Jones Industrial Average.

 

Technology companies are in the black

The tech-heavy Nasdaq was aided by strong gains from several major technology companies, including Amazon.com (AMZN.O), which rose 2.66%, and Alphabet (GOOGL.O), which increased 2.29%.

In addition, Apple (AAPL.O) shares surged 2.42% after the iPhone maker announced that its mixed reality device, Vision Pro, will go on sale in the US starting February 2.

Moreover, Nvidia (NVDA.O) shares climbed 6.3%, while chipmaker Advanced Micro Devices (AMD.O) jumped 5.48%. This helped the Philadelphia SE Semiconductor Index (.SOX) rebound 3.28% after falling 5.8% last week, which was its biggest weekly percentage decline since October 2022.

“This market is definitely focused on yield at this point, and investors are trying to factor in when and how many rate cuts we’ll see, the timing and size of the rate cuts.”

said Bill Mertz, head of capital markets research at U.S. Bank Wealth.

The Dow Jones rose 0.58% to 37,683.01, the S&P 500 climbed 1.41% to 4,763.54, and the Nasdaq Composite surged 2.20% to 14,843.77.

These gains were the first for the Nasdaq and S&P 500 of more than 1% since December 21 and their largest one-day percentage gains since November 14.

However, the gains were tempered by a sharp drop in Boeing shares, which plunged 8.03% after the plane maker and US regulators gave the green light for airlines to inspect planes that were grounded due to a panel detachment incident. The plane was operated by Alaska Airlines (ALK.N). The MAX 9 was in flight, causing the airliner to make a hard landing over the weekend.

S&P 500 shows mixed performance

The energy sector (.SPNY) was the only laggard among the 11 S&P 500 sectors on Friday, declining 1.16% after hitting its lowest level in a month. This decline was attributed to a drop of about 4% in crude oil prices, which followed steep price cuts by leading exporter Saudi Arabia and increased production from the Organization of the Petroleum Exporting Countries (OPEC).

The benchmark S&P 500 index (.SPX) also broke its nine-week winning streak on Friday, as investors scaled back their expectations that the Federal Reserve would be inclined to lower interest rates this year.

The possibility of a rate cut by the Federal Reserve (Fed) in March has decreased from 88.5% last week to 63.8% today, according to the FedWatch Tool.

Investors will be closely watching this week’s inflation data, including the consumer price index (CPI) and producer price index (PPI), to gauge the Fed’s monetary policy stance.

On the equity market, the S&P 500 index added 13 new 52-week highs and did not record any new lows. The Nasdaq Composite index, on the other hand, recorded 101 new highs and 92 new lows.

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