Tech Giants Propel Nasdaq Amid Inflation Concerns

The Nasdaq led Wall Street gains, bolstered by rising technology stocks such as Alphabet. Market activity focused on an impending inflation report that could sway the Federal Reserve's interest rate decisions. Despite anticipation of a rate cut, a more conservative stance may be adopted due to economic resilience.

The Nasdaq surged ahead of its Wall Street counterparts on Tuesday, driven primarily by the growth of megacap technology stocks. Alphabet, Google's parent company, soared by 4.7%, setting a new benchmark for the communication services sub-sector. Despite this, the wider market faced pressures, with nine of the 11 major S&P sectors experiencing declines.

Market attention remains firmly on an upcoming inflation report, due this week, which could significantly influence the Federal Reserve's interest rate decisions. The November consumer price index, expected on Wednesday, is a crucial dataset preceding the Fed's December meeting. Current predictions suggest a minor inflation increase last month.

FedWatch Tool indicates that there's a strong likelihood of another 25 basis point interest rate cut next week, yet there are expectations of a pause in rate cuts come January. Meanwhile, the stock market remains optimistic, as the S&P 500 and Nasdaq continued to post positive returns at the end of the year, buoyed by Donald Trump's election victory and potential pro-business policies.

(With inputs from agencies.)