Nasdaq 100 Notches Record Daily Close, Boosted By Mega-Cap Giants, Fed Rate Cut Optimism

Author: Piero Cingari | July 02, 2024 04:15pm

The tech-heavy Nasdaq 100 Index closed Tuesday’s session at 20,011 points, rallying 1% and marking the highest daily closing price ever recorded,

Shares of Microsoft Corp. (NYSE:MSFT), Apple Inc. (NASDAQ:AAPL), and Amazon.com Inc. (NASDAQ:AMZN) – together comprising 20% of the tech index’s total weight – all reached fresh all-time highs during Tuesday’s trading session.

Investors showed strong confidence in mega-cap tech giants, with nine out of the 10 largest stocks within the Nasdaq 100 closing in positive territory. The sole exception was Nvidia Corp. (NASDAQ:NVDA), which fell by 1.4%.

Fed Chair Powell Bolster Rate Cut Hopes

At an ECB monetary policy panel on Tuesday, Fed Chair Jerome Powell suggested that the disinflation trend has resumed and the labor market is showing signs of “appropriate cooling.”

This has bolstered investor confidence that the Federal Reserve will soon initiate a rate-cutting cycle, with expectations for the first cut in September and another in December.

Thus, two rate cuts are fully anticipated by year-end, with market participants projecting an additional 84 basis points of cuts, amounting to three to four cuts in 2025.

Traders now anxiously await key labor market data, including the private ADP Employment Report slated for Wednesday.

Nasdaq 100’s Remarkable Rally

The Nasdaq 100 Index, tracked by the Invesco QQQ Trust (NASDAQ:QQQ), is poised for its ninth week of gains out of the last 11.

Since hitting lows in October 2022, the index has rallied over 90%, as illustrated in the chart below from the Benzinga Pro Platform.

Nasdaq 100’s Top 5 Gainers On July 2, 2024

Security Name	Return
Tesla, Inc. (NASDAQ:TSLA)	10.17%
ON Semiconductor Corporation (NASDAQ:ON)	5.44
Advanced Micro Devices, Inc. (NASDAQ:AMD)	4.22
Arm Holdings plc (NASDAQ:ARM)	2.94
Charter Communications, Inc. (NASDAQ:CHTR)	2.57