On Friday, US stocks confidently surged with the S&P 500 and Nasdaq hitting an all-time high. The remarkable rally was driven by the ever-growing enthusiasm for artificial intelligence, which bolstered technology stocks. Additionally, the decline in Treasury yields also provided further support.

AI Innovation

The Nasdaq index (IXIC) recently hit a new record high, closing in a straight line higher than ever. Artificial intelligence-related companies like Nvidia (NVDA.O) and Meta Platforms (META.O) played a major role in driving the index up, surpassing the previous peak of 16,212.23 achieved in November 2021.

As of the end of February, the three major indexes recorded their fourth consecutive month of gains, largely driven by growth opportunities associated with artificial intelligence, which has also boosted semiconductor companies.

On 1st March, Nvidia’s stock rose by 4% and closed above $2 trillion in market value for the first time. Competitor Advanced Micro Devices (AMD.O) also saw gains, with shares rising by 5.25% to reach a record high of $202.64. The Philadelphia Semiconductor Index (.SOX) also closed at a new record high after a 4.29% increase during the trading session.

Investors have been relying on the strength of the economy, as they try to predict when the Central Bank will make its first interest rate cut. They are currently focused on the month of June and are expecting the Central Bank to take a soft approach towards the economy.

“Since the economy is performing well and expansion remains somewhat sluggish, the Fed will be more gradual in lowering interest rates,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

In any case, this is great because we are gradually moving away from the high-interest rate cycle and no longer need to cut rates aggressively.

The Dow Jones Industrial Average (.DJI) rose by 90.99 points or 0.23%, reaching 39,087.38. Similarly, the S&P 500 (.SPX) went up by 40.81 points or 0.80% to 5,137.08, while the Nasdaq Composite (.IXIC) surged by 183.02 points or 1.14% to 16,274.94.

For the week, the S&P 500 gained 0.95%, the Nasdaq rose 1.74%, and the Dow fell 0.11%.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 29, 2024. – Source – NYSE

Despite major areas of strength and a tight labor market, the economy still has some weaknesses, particularly in the manufacturing sector. However, there were some signs of a potential rebound in the latest data released on Friday.

That aid caused U.S. Treasury yields to drop, with the two-year note yield falling to a low of 4.519%.

Reported – S&P 500, Nasdaq

Taking care of the matter, Lead Representative Chris Waller stated that forthcoming decisions regarding the final size of their financial portfolio will have little impact on their efforts to control inflation.

Adriana Kugler, who took care of the lead representative, expressed hopefulness but also caution about the progress of disinflation and its impact on the job market. She added that the national bank has avoided any pay cost distortion. Meanwhile, Thomas Barkin, the president of Richmond, commented that it is too early to predict when the Fed will begin to cut rates.

The S&P 500 technology sector (.SPLRCT) was the best performer among the 11 major sectors, gaining 1.78%, while utilities (.SPLRCU) were the weakest, with a decline of 0.72%.

One of the significant movers, New York Community Bancorp (NYCB.N), saw a major drop of 25.89% in its shares. The regional lender reported “material shortcomings” in its internal controls regarding loan review, which led to the revision of its fourth-quarter loss to multiple times higher than the previously stated numbers. As a result, the KBW regional financial index (.KRX) fell by 1.27%.

Dell’s stock price (DELL.N) surged by 31.62% – its biggest ever daily gain – after the PC manufacturer announced annual revenue and profit that exceeded Wall Street estimates.

Gains on the Dow were somewhat limited by a 1.83% drop in Boeing (BA.N) following reports that the company was in talks to acquire supplier Spirit AeroSystems (SPR.N).

Propelling issues dwarfed decliners by a 2.29-to-1 proportion on the NYSE and by a 1.55-to-1 proportion on the Nasdaq.

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