Stock Market Update: Tech-Led Rally Sparks Monday Gains on 6/12/23

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  • The stock market, including the Nasdaq 100, S&P 500, and Dow Jones Industrial Average, finished in the green with the technology sector leading and the energy sector lagging. The US 10-Year Treasury yield remained stable while the Two-Year Treasury yield decreased, bringing the spread between them to -84 basis points. The market is pricing in a higher chance of a higher Fed Funds rate for December 2023.
  • Americans are increasingly relying on credit cards to keep up with their expenditures, amassing a record debt of $988 billion, averaging out to about $5,700 per person. High inflation and growing costs are contributing factors, along with the highest interest rates since the Fed began tracking them in 1994, with an average APR now surpassing 20%.
  • The Federal Reserve is expected to hold its policy rate steady on Wednesday, after 10 consecutive rate hikes. The market assigns a 74% chance of maintaining the federal funds rate target range at 2.25% to 2.50%. Despite the stock market rally, investors remain concerned about Americans’ record credit card debt and the uncertainty surrounding the Federal Reserve’s interest rate decisions.

In a boost for the stock market, a tech-led rally kicked off the week of June 12th. On Monday, leading tech giants such as Apple, Amazon, and Microsoft experienced substantial gains, providing a much-needed lift for the overall stock market as the economy continues to recover from the COVID-19 pandemic.

The Nasdaq Composite Index, which is heavily weighted towards technology stocks, saw a 0.8% increase, while the S&P 500 and Dow Jones Industrial Average each rose by 0.5%.

Investors appeared to be responding positively to recent news that the Federal Reserve would maintain its accommodative monetary policy, with interest rates expected to remain low for the foreseeable future, pushing investors towards high-growth tech companies.

The rally also came as companies continued to report strong earnings. Apple, for example, announced record quarterly revenues of $89.6 billion in the first quarter, helping to drive up its share price. Similarly, Amazon and Microsoft posted strong earnings reports, providing further confidence to investors.

Overall, the tech-led rally suggests that investors remain optimistic about the future prospects for the sector, despite ongoing concerns around inflation and potential regulatory restrictions.

As the week continues, investors will be closely watching how the market evolves, with many hoping that the current rally will continue into the coming weeks.

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