Market Rally Gains Momentum as Tech Stocks Rebound
The US stock market experienced a significant surge on Friday, driven by a revival in tech stocks and positive economic data. The Dow Jones Industrial Average rose 0.9%, while the S&P 500 climbed 1%, recovering from a losing day on Thursday. The tech-heavy Nasdaq Composite led the charge, gaining over 1.5% as investors regained confidence in the sector.
Economic Data Fuels Optimism
Recent days’ strong bank earnings and inflation readings have revived hopes of interest-rate cuts, boosting market sentiment. Housing starts exceeded forecasts in December, with a 15.8% increase to an annual rate of 1.49 million. Industrial production also outperformed estimates, adding to the picture of strength in the US economy.
Tech Stocks Lead the Charge
Nvidia and Tesla shares rebounded, while Apple stock gained 1.3% in morning trading after its worst loss since August. Chipmakers like Micron joined Nvidia in making gains, and crypto-linked names such as Coinbase received a boost as bitcoin continued its advance above $100,000.
Policy Shifts on the Horizon
Investors are also eyeing potential policy changes under the incoming Trump administration, which could impact inflation and the economy. The president-elect’s plans for tariffs, taxes, and debt could have significant implications for the market.
Global Economic Developments
China’s economy grew more than expected last year, topping Beijing’s 5% target after a stimulus blitz. However, Asian stocks lost ground on Friday as investors weighed the potential impact of promised tariffs.
Healthcare and Technology News
The Centers for Medicare and Medicaid Services released its second round of drug negotiation targets, including Novo Nordisk’s blockbuster GLP-1s. The US Supreme Court upheld a law banning TikTok in the US unless it is sold to an owner not controlled by a foreign adversary, creating uncertainty for the Chinese app.
Market Outlook
As the market looks ahead to the inauguration of Donald Trump on Monday, investors are bracing for potential policy shifts and their impact on the economy. With the 10-year Treasury yield pulling back to around 4.6%, the stage is set for an interesting week ahead.
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