NASDAQ’s Return – Tech Growth and Uncertainty
After months and months of losses and misfortune, tech was able to come back in a bid to claim its once-dethroned position at the top of the equity market. Over the past year, the NASDAQ Composite, an index that tracks internet or tech-related companies, had quite recently decreased upwards of 37% from its November 2021 high. After several may have thought that tech had been wrung out to dry, the NASDAQ was able to soar 9% since Wednesday’s close after a glimmer of hope came in the form of Thursday’s CPI report. Investors hope that the cooling inflation numbers may trigger a response from the Fed to pivot from their projected 75 basis point hike in December.
Despite this two-day bounce being the biggest NASDAQ has seen since the 2008 financial crisis, there are still several questions and concerns that have left other investors weary. Weak and deteriorated third-quarter earnings plagued the top FAANG companies in the past two weeks, with the NASDAQ still remaining considerably lower year to date than the S&P 500, 28% to 16% respectively. Furthermore, several experts just believe this to be another typical bear market rally. However, the market’s performance will solely depend on these companies’ fourth-quarter earnings and the Fed’s tightening on inflation. Investors should continue to gauge the Fed’s upcoming response to this new data, while also looking at new retail and housing market data that will release in the coming days.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
