Tech Surge Sends Nasdaq 100 to Record Highs


Tech Surge Sends Nasdaq 100 to Record Highs

The Nasdaq 100 index saw a remarkable surge on Thursday, with a daily advance of over 3% propelling it to close at its all-time high for the first time since March 2000. This historic moment has drawn parallels to the dot-com era over two decades ago, which culminated in the bursting of the bubble that foretold a looming recession.

Echoes of the Past

Analysts at Bespoke Investment Group reflected on this significant milestone, highlighting the eerie resonance with the turbulent period of March 2000 that still haunts investors to this day. The index’s achievement of a over 3% gain to hit all-time highs harkens back to the 32 instances during the 1990s that preceded the infamous dot-com bubble peak.

S&P 500 Not Far Behind

In a synchronistic move, Thursday also marked the S&P 500’s first one-day advance of at least 2% to close at a new all-time high since March 2000. Data compiled by Bespoke reveals a pattern of green dots showcasing the 21 times the benchmark index experienced similar surges since 1952, offering insights into the market’s performance in the aftermath of these milestones.

Looking Ahead

Despite initial apprehensions following such record-breaking days, historical data suggests a positive outlook in the coming months. While short-term fluctuations may occur, the market has historically managed to maintain an average gain of roughly 2% over the next three months post such events, indicating resilience and potential for continued growth.

The U.S. stock market has been ablaze with activity since its October low, with megacap technology stocks at the forefront. As quarterly results underscore an escalating AI frenzy and robust economic growth, investors remain cautiously optimistic amidst speculations about the Federal Reserve’s future interest-rate policies.

Stock Indexes Soar Amid Nvidia’s Revenue Forecast

The stock market witnessed a soaring surge on Thursday as three benchmark indexes skyrocketed following a blowout revenue forecast from Nvidia Corp. This AI darling’s positive news spurred the biggest one-day gain in market capitalization by any U.S. company. The Dow Jones Industrial Average and S&P 500 indexes reached new record closing highs, while the Nasdaq Composite settled just shy of its first record close since 2021.

Comparison to the Dot-Com Bubble

Market participants have been comparing the rush into the so-called Magnificent Seven over the past year to the dot-com bubble of 1999. During that era, stocks rode a wave of technology hype, only to experience a crash when the bubble burst in 2000, leading to a mild recession the following year.

Although Bespoke analysts did not directly draw a parallel between the dot-com bubble and the current stock rally, they highlighted historical patterns and seasonal trends. Additionally, next month typically marks one of the weakest periods of the year for the U.S. stock market. These factors may indicate that a pullback could be on the horizon over the next few weeks.

On Friday afternoon, U.S. stocks were edging higher, with the Nasdaq Composite fluctuating between gains and losses. Meanwhile, the S&P 500 and Dow industrials were on track for another round of record highs and potentially their most significant weekly gains of the year, according to FactSet data.

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