AI and Semiconductor stocks rally has pushed the Nasdaq composite over 20,000 points for the first time. Semiconductor stocks have risen since NVIDIA released its Blackwell chips, which have a high demand and Nasdaq points reached an unprecedented level after the launch of Google’s Willow quantum chip. Nasdaq surged following the good performance of giant technology like Nvidia, Alphabet, Apple, and carmaker giant Tesla. The surge was seen after the release of the U.S. inflation rate report.
Nasdaq hit a record of 20,000 for the first time on December 11, proving that AI and semiconductors will boost the market and tech industry.
Nasdaq Achieves Significant Milestone in 2024
On December 11, the Nasdaq composite index closed at 20,034.89, up by 1.8% on the day. The AI stock surge rally has benefited investors who went big with shares of technology and growth-oriented companies. However, it baffled everyone with the increasing valuation and dominance of mega-cap stocks. These stocks now carry significantly high weight in the index.
Cameron Dawson, chief investment officer at NewEdge Wealth, said, “There is an aspect of a chase into year-end, where the winners … keep winning. The question is if this momentum can persist into 2025, where stretched valuations, positioning, sentiment, and growth expectations could all present high bars to jump over to keep above-average returns going.”
How the AI Boom is Supercharging the US Stock Market?
Along with other giants, Broadcom saw a rise of 6.6% after the news of its deal with Apple to develop a chip for the company. The U.S. stock market got a boost on Wednesday after the November inflation report showed a slight increase to 2.7%, matching economists’ expectations.
Although inflation is still a bit persistent, the news raised hopes that the Federal Reserve might lower interest rates at its upcoming meeting. Now, there’s a 99% chance of a rate cut next week, up from the previous 86% likelihood, based on futures market data from the CME Group’s FedWatch Tool.
Nasdaq’s Role in Supporting the SP500’s Growth
Wall Street saw a boost on Wednesday, fueled by a surge in tech stocks that pushed the Nasdaq past the 20,000-point mark for the first time. This nearly 2% jump helped the Nasdaq, while the S&P 500 also rose about 1%, signaling a strong recovery after earlier losses.
The Nasdaq’s historic surge past 20,000 points, driven by AI and semiconductor stocks, highlights the tech sector’s strength. This milestone, fueled by major companies like Nvidia, Alphabet, and Apple, reflects a broader market recovery, with the S&P 500 also climbing. While inflation remains persistent, the possibility of a Federal Reserve rate cut further fueled optimism. However, concerns about stretched valuations and growth expectations persist, leaving uncertainty about whether this momentum can continue into 2025.
