Tech News Summary:
- Nasdaq Composite rose by 0.54% to 13,310.30 points and S&P 500 increased by 0.31% to 4,307.03 points, while Dow Jones Industrial Average added just 0.15% due to a drop in Intel shares.
- Investors are closely watching next week’s Federal Reserve monetary policy committee meeting and May consumer inflation report for signals about whether interest rates will rise soon or not. Markets are pricing in a strong chance that rates won’t rise anytime soon, but there could be some dissent if inflation readings turn out higher than expected.
- According to JPMorgan’s Michael Feroli, the Committee is expected to leave rates unchanged at next week’s FOMC meeting while retaining a tightening bias in its communications as it waits to see how the economy handles recent rate hikes before making further decisions. However, both hawks and doves acknowledge that absent any slowdowns in growth or inflation, the Fed may need to resume raising rates.
In a surprising turn of events, tech giants such as Apple, Amazon, and Microsoft have propelled the market to surge with record highs, causing the S&P 500 to soar. This sudden boost in the market comes amid concerns of a possible recession and the ongoing COVID-19 pandemic.
Thanks to a steady increase in demand for tech services and products, tech giants have reported better-than-expected earnings and strong quarterly results, demonstrating the resilience of the sector despite economic headwinds.
Apple, in particular, experienced a significant boost in its share prices after announcing its plans to split its stock, making it more affordable for individual investors and increasing its potential for growth. Other tech titans, such as Facebook and Google parent Alphabet, have also reported strong earnings, contributing to the overall surge in the market.
The surge in the market has also led to gains across other sectors, including banking, healthcare, and energy. The news has been received positively by investors, with the S&P 500 reaching an all-time high.
Despite these positive signs, experts remain cautious about the long-term outlook for the economy. The ongoing pandemic and political uncertainty, including the upcoming US presidential election, continue to cast a shadow over the market’s future performance.
Overall, the tech sector’s strong performance has provided a much-needed boost to the market, demonstrating its ability to outperform and adapt even in the most challenging circumstances.