The Nasdaq 100 index, closely followed through the Invesco QQQ Trust QQQ, has been experiencing a remarkable climb this week, setting new record highs and getting close to reaching the 22,000-point mark. This surge is driven by investor confidence in the Magnificent Seven tech giants and the transformative power of artificial intelligence, fueling strong market optimism.
Throughout the year so far, the Nasdaq 100 has demonstrated a robust 30% gain, positioning itself to potentially outshine the S&P 500 for the ninth occasion in the last ten years. As of the start of 2023, the index is on course to almost double, nearing a 100% gain, a feat last accomplished in the periods of 2019-2020 and the dot-com boom of 1998-1999. Notably, five out of the seven popular Magnificent Seven stocks such as Apple Inc., Amazon.com Inc., Alphabet Inc., Meta Platforms Inc., and Tesla Inc., have achieved fresh record highs recently, collectively surpassing a market capitalization of over $18 trillion, which even exceeds China's gross domestic product.
One standout performer during the week has been Broadcom Inc., surging after an impressive quarterly earnings beat and providing positive AI-driven guidance for the upcoming year. This surge has propelled the chipmaker into the exclusive $1 trillion market-cap club, making it the eighth largest publicly traded company. Inflation data released also raised concerns as consumer inflation rose 2.7% year-over-year, while producer inflation stood at 3%, exceeding expectations and hinting at possible cost increases for consumers. Additionally, it is expected that the Federal Reserve may announce a 25-basis-point interest rate cut at their upcoming meeting, although policymakers might signal fewer cuts in 2025, possibly indicating a pause as early as January. On another note, President-elect Donald Trump made headlines by ringing the New York Stock Exchange bell and expressing his confidence in the U.S. economy. General Motors Co. is considering moving away from its robotaxi aspirations to save costs and may explore licensing Tesla’s Full Self-Driving technology as commented by analyst Gary Black. Lastly, Alphabet showcases its innovation with the new Willow quantum chip, which analysts believe could bring advancements in technology and computing power.