U.S. stock markets surged on Wednesday, driven by a strong rally in major technology stocks, with the Nasdaq Composite soaring above the 20,000-point mark for the first time.
The Nasdaq rose by 1.8%, closing at 20,035. The S&P 500 gained 0.8%, though it fell just short of hitting a new record high. In contrast, the Dow Jones Industrial Average closed 0.2% lower, after giving up earlier gains. The market’s performance marked a recovery from two consecutive days of losses, following a strong post-election rally that had pushed major indexes to all-time highs.
Major Tech Stocks Lead the Surge
Large-cap tech stocks were the driving force behind the gains on Wednesday. Google-parent Alphabet (GOOGL) and electric vehicle maker Tesla (TSLA) saw impressive increases, rising by 5.5% and 5.9%, respectively.
Other tech giants also saw solid gains. AI chipmaker Nvidia (NVDA) rose by 3.1%, while Microsoft (MSFT), Amazon (AMZN), and Meta (META) ended the day higher. Apple (AAPL) reached an all-time high during the session, but closed 0.5% lower.
Broadcom (AVGO) also saw a significant rise of 6.6%, following reports that Apple is working with the chipmaker to develop its own artificial intelligence chips. General Electric’s energy division, GE Vernova (GEV), surged 5% after the company raised its long-term revenue forecast, declared a dividend, and announced a stock buyback program.
Inflation Data and Fed Rate Cut Expectations
The rally was partly fueled by the release of the Consumer Price Index (CPI) report, which showed that U.S. inflation for November increased to 2.7%, up from 2.6% in October. While inflation remains elevated, the figure came in line with expectations and boosted investor hopes that the Federal Reserve will lower interest rates in its upcoming meeting.
Market participants are now pricing in a 99% chance that the Fed will reduce its benchmark interest rate by a quarter percentage point next week. This marks a significant shift from the 86% probability of a rate cut that was priced in before the CPI report was released, according to data from the CME Group’s FedWatch Tool.
The yield on 10-year U.S. Treasury bonds remained stable at around 4.28%, reflecting cautious sentiment about future interest rate movements.
Bitcoin and Commodities Surge
Bitcoin also saw a notable rise, trading at $101,600, up from recent lows around $96,000. The cryptocurrency has surged by about 40% since the election, with growing expectations that the incoming administration will adopt policies favorable to the crypto market.
In commodities, gold futures gained more than 1%, reaching around $2,750 an ounce. Crude oil futures also rose by about 2%, as market participants adjusted their expectations for the global supply outlook.
