Tech Surge Amid Economic Uncertainty: Nasdaq's Strong Run Continues

The S&P 500 and Dow are set to open lower as investors anticipate fresh economic data and Federal Reserve comments. Meanwhile, the Nasdaq is positioned to extend its gains driven by tech giants like Apple and Nvidia. Economic data releases and Fed projections continue to influence market sentiment.


Reuters | Updated: 17-06-2024 18:35 IST | Created: 17-06-2024 18:35 IST
Tech Surge Amid Economic Uncertainty: Nasdaq's Strong Run Continues
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The S&P 500 and Dow were set to open lower on Monday as investors awaited fresh economic data and comments from Federal Reserve officials throughout the week for more clarity on monetary policy.

The tech-heavy Nasdaq was on track to extend its strong run, inching up as megacaps Apple and Nvidia rose between 0.6% and 1.1% in premarket trading. Some chip stocks also rose, with Broadcom and U.S.-listed shares of Taiwan Semiconductor Manufacturing Co up more than 3% each. Arm Holdings and Micron Technology gained over 2% each after price-target raises by brokerages.

The blue-chip Dow was alone among the three major indexes to post weekly declines on Friday, while the Nasdaq notched its fifth consecutive record closing high. The S&P 500 hit multiple all-time peaks in the previous week. Some investors, however, are concerned about the sustainability of the equity rally as megacap growth and technology stocks were behind most of Wall Street's gains this year.

"There really isn't an appetite to be a real seller right now because there is a perception that momentum is going to continue, and stocks are going to continue winning," said Daniela Hathorn, senior market analyst at Capital.com. "The fact that the rally has been driven mostly by a select few stocks, that would mean that the pullback could be even deeper."

Goldman Sachs still raised its 2024 year-end target for the S&P 500 Index to 5,600 from 5,200 earlier, representing about a 3.1% upside to the index's last close. Markets are also keeping a close eye on upcoming comments from the New York Fed's John Williams, Philadelphia Fed's Patrick Harker and Fed Board Governor Lisa Cook.

The New York Fed's Empire State Current Business Conditions index slipped less than expected, while the index of prices paid softened slightly. On the economic roster for the rest of the week are May retail sales data on Tuesday, with industrial production, housing starts and S&P flash PMI data among other key releases due later in the week.

Recent hawkish projections from the Federal Reserve have somewhat contrasted several data releases pointing to growing weakness in the economy. The central bank dialed back their projections for three rate cuts in 2024 to just one on Wednesday. One Fed rate cut in December is a "reasonable prediction", Minneapolis Fed President Neel Kashkari said in an interview on Sunday.

However, markets still expect about two 25-basis-point cuts this year, according to LSEG data. The CME FedWatch tool shows easing is still seen beginning at the September meeting. At 8:42 a.m. ET, Dow e-minis were down 94 points, or 0.24%, S&P 500 e-minis were down 6 points, or 0.11%, and Nasdaq 100 e-minis were up 8.75 points, or 0.04%.

Autodesk shares jumped 4.7% after a report that activist investor Starboard Value had bought a roughly $500 million stake in the software maker. Best Buy climbed 4.2% following a report UBS upgraded the electronics retailer to "buy" from "neutral".

A shorter trading week is on deck as markets will be closed on Wednesday.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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