The Nasdaq Composite surged on Wednesday, closing above the 20,000 mark for the first time in history. The tech-heavy index rose 1.77% to end the session at 20,034.89, marking an all-time high and a new closing record. The broader market also gained, with the S&P 500 rising 0.82% to close at 6,084.19.
However, the Dow Jones Industrial Average was the outlier, falling 99.27 points, or 0.22%, to 44,148.56. The tech sector helped lift the market, with the Nasdaq-100 rising more than 1%, putting its year-to-date gains at over 24%. Gains came for a second day following Alphabet’s new chip announcement.
Shares of the tech giant ended the session 5.5% higher. Other major tech leaders also climbed after the release of relatively tame inflation data. Chipmaker Nvidia ticked up more than 3%, and Tesla advanced nearly 6%.
Both stocks have risen about 181% and almost 71%, respectively, year to date. November’s consumer price index (CPI) showed a 0.3% rise from October and a 2.7% increase from a year ago. Core CPI, which excludes volatile food and energy prices, increased 0.3% on the month and 3.3% on an annual basis.
Nasdaq surges to historic 20,000 finish
While this inflation data represented a quicker pace from the prior month, traders speculated it was still not high enough to keep the Fed from cutting rates at its next meeting. Fed funds futures are pricing in a roughly 95% likelihood of a rate cut, according to CME’s FedWatch Tool.
Tom Hainlin, senior investment strategist at U.S. Bank Asset Management, said, “We expect a rate cut in the final meeting here at the end of the year. With no surprises, the direction of the market’s been higher, and there’s been nothing to derail it from melting up into year-end.”
The restaurant industry may experience some gains at the beginning of 2025, according to BTIG, which named Starbucks and Wingstop as top picks. Analyst Peter Saleh expects restaurant operators will continue to battle for labor as availability and mid-single digit inflation push them to implement more labor-saving technology.
Wednesday’s rally following the CPI release is nearly in line with historical standards. The S&P 500 traded about 0.92% higher just before 1:30 p.m. ET. Since 2000, the S&P 500 has risen 0.86% on the average trading day following the release of CPI data.
Analysts maintained their positive outlook on General Motors (GM) after the company announced it will no longer fund its Cruise division’s robotaxi development work, choosing instead to focus on advancing its autonomous vehicle technology. Bank of America and Goldman Sachs kept their buy ratings on GM following the announcement. This decision allows GM to cut costs and return greater capital to shareholders next year, supporting confidence in the potential of AV technology for personal vehicles while creating at least $1 billion in annual savings.
Nineteen stocks in the S&P 500 hit fresh 52-week highs during Wednesday’s session, with twelve marking new all-time highs. Notable names include Alphabet and others.
