The energy on Wall Street after the holiday season was palpable as the S&P 500 surged 1.3%, marking its first significant gain since Christmas and its most remarkable performance in almost two months. This boost was attributed to the strength of Big Tech stocks, which helped break a five-day losing streak, the longest since April, and narrowed the weekly loss to 0.5%.
Key Highlights from the Day’s Market Activity:
- The Dow Jones Industrial Average rose by 339 points or 0.8%, while the Nasdaq composite saw a leap of 1.8%.
- Nvidia emerged as a frontrunner in driving the market, with a 4.5% increase in its value. Other companies aligned with the artificial intelligence trend also saw gains, despite concerns about overvaluation. Super Micro Computer experienced a surge of 10.9%, while Palantir Technologies climbed 6.3%.
Encouraged by the bullish trends, Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management, expressed optimism about the ongoing rally in AI. While recognizing the diminishing easy gains in this sector, Marcelli believed that the rally was far from being over.
- Tesla rebounded significantly, rising by 8.2% to recover from its previous day’s drop of 6.1%. The overall sentiment towards Tesla was uplifted after it delivered fewer electric vehicles than expected in the last quarter of 2024.
- Rivian outshone its rivals with a 24.5% surge after exceeding expectations by delivering over 14,000 vehicles in the latest quarter.
Conversely, US Steel experienced a dip of 6.5% following President Joe Biden’s decision to block a proposed $15 billion acquisition by Japan’s Nippon Steel. The beer, wine, and liquor sector also faced a downturn after US Surgeon General Vivek Murthy warned about the increased cancer risk associated with alcohol consumption. This prompted a 3.4% fall for Molson Coors Beverage and a 2.5% drop for Brown-Forman, the distillery known for Jack Daniel’s.
In summary, the S&P 500 closed up at 5,942.47, having gained 73.92 points. The Dow Jones Industrial Average was up by 339.86 points, reaching 42,732.13, while the Nasdaq composite saw an increase of 340.88 points, landing at 19,621.68.
Despite a strong performance in the US markets over the past few years, uncertainties loom ahead. The anticipation of continued rate cuts by the Federal Reserve seems to be dwindling as inflation persists. Additionally, tariffs and policies set forth by the current administration could further impact inflation levels. The global market scenario mirrors this uncertainty, with China facing economic challenges and European indexes witnessing a decline.
Amidst these fluctuations, South Korea’s Kospi index managed a 1.8% jump following promises of economic stabilisation efforts by the acting president and finance minister, Choi Sang-mok. Similarly, the bond market saw Treasury yields rise after a positive report on US manufacturing, suggesting cautious optimism about the economy’s trajectory.
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