The Nasdaq composite and S&P 500 are on pace to finish with double-digit gains for a fourth straight year, a first since the late 1990s, as big tech stocks like Microsoft, Meta, Nvidia, and Apple buoy the market. Despite rising interest rates and oil prices, the tech-heavy Nasdaq rose 2.5% in the third quarter, closing at a record high on Sept. 22, while the S&P 500 gained 2%. Investors are betting that tech companies will keep investing heavily in AI, with Microsoft reporting robust cloud growth and Nvidia forecasting 70% revenue growth by fiscal 2028.
However, the rally faces headwinds. The 10-year U.S. Treasury yield saw its largest quarterly gain since 1994, and Brent crude futures rose 42% to $103.53, pressuring consumer spending and the Dow Jones industrials, which fell 2.7%. An equal-weighted S&P 500 and the Russell 2000 also declined, snapping winning streaks. Despite this, strategists like Ross Mayfield of Baird remain optimistic, noting that rate hikes are unlikely to derail AI-driven growth. The market's resilience will be tested as rates are poised to rise further, but the S&P 500 and Nasdaq remain on track for a historic fourth consecutive year of double-digit gains.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing