The Nasdaq index, a hub for many tech companies in the United States, achieved a significant milestone by reaching a new high, rising 0.9% to 16,091.92 on Thursday. Analysts attribute this surge to the prevailing optimism surrounding artificial intelligence (AI). This growth marks a formal recovery from the downturn that impacted shares in 2021.
Investors are buoyed by the belief that AI will usher in a fresh wave of economic expansion. Consequently, they are actively acquiring shares of companies poised to benefit from this trend, such as the renowned chipmaker Nvidia. The company, whose market value briefly touched $2 trillion (£1.58 trillion) this month, propelled the market forward with a notable increase of 1.87%.
Microsoft, another tech giant, also contributed to the positive momentum, registering a 1.45% rise. The company recently unveiled new AI-powered features tailored for finance professionals using products like Excel and Outlook. Smaller players in the industry, including chipmaker AMD and PC manufacturer Dell, also experienced gains on Thursday. Dell, positioned to profit from increased investments in new equipment for AI-powered computing, particularly caught investors’ attention.
This positive market sentiment aligns with growing optimism regarding the trajectory of the US economy. Last year, both the Dow Jones and the S&P 500 recovered from losses incurred in 2022, driven by concerns over inflation and escalating borrowing costs. On Thursday, the Dow closed 0.1% higher at 38,997, while the S&P reached a new high, up 0.5% at 5,096.27. This marked the fourth consecutive month of gains for all three major indexes.
Investors are now hopeful that the US central bank is nearing the end of its battle against inflation, speculating that it will soon start reducing its key interest rate. This anticipated move will make borrowing more affordable, fostering increased economic activity and investment.
Adding to this positive outlook, the US Department of Commerce reported that the personal consumption expenditures (PCE) price index, a key inflation measure closely monitored by the Federal Reserve, fell to 2.4% in January, a 0.2% decrease from December. This aligns with expectations and further contributes to the overall positive market sentiment.
Meanwhile, on the global stage, Japan’s main stock index achieved an all-time closing high in February, surpassing the previous record set 34 years ago, despite the country being in a recession. This underscores the resilience and upward trajectory observed in various global markets.
