Nasdaq Surges on Tesla’s AI Boost and Upcoming Inflation Data
The Nasdaq experienced a significant surge on Monday as investors eagerly awaited the release of inflation data later in the week, while also being uplifted by news of Tesla’s advancements in artificial intelligence (AI). Tesla’s stock rallied an impressive 10% following an upgrade from Morgan Stanley, who predicted that the company’s market value could increase by nearly $600 billion thanks to its Dojo supercomputer.
Other major players in the market also saw gains, with Amazon climbing 3.5% and Microsoft adding 1.1% to its stock value. Meta Platforms, the social media platform, saw a 3.25% jump after reports emerged of its efforts to develop a more powerful AI system. Meanwhile, Walt Disney saw a 1.2% increase, and Charter Communications rose by 3.2% following their deal to bring Disney’s programming, including ESPN, back to the Spectrum cable service just hours ahead of the start of NFL’s Monday Night Football.
Investors’ attention is currently focused on the upcoming release of August’s consumer price index (CPI) data on Wednesday, which will provide valuable insights into the Federal Reserve’s future plans regarding interest rate hikes. On Thursday, producer price data will also be released, further influencing market expectations.
The recent increase in oil prices and stronger-than-expected economic data have raised concerns about persistent inflation and the potential for higher interest rates in the long run. In response to these concerns, traders believe that there is a 93% probability that the central bank will maintain current interest rates during its September meeting. The chances of a rate pause in November currently stand at 57%, according to the CME FedWatch Tool.
In light of these developments, market experts are closely watching the August inflation figures to determine the Federal Reserve’s next steps. If the data falls within expectations, it is likely that the central bank will pivot away from further interest rate hikes.
On Monday, the S&P 500 climbed 0.67% to close at 4,487.46 points, while the Nasdaq saw a 1.14% gain, reaching 13,917.89 points. The Dow Jones Industrial Average also experienced a modest rise of 0.25%, closing at 34,663.72 points.
Although trading volumes were relatively light, with 9.3 billion shares exchanged compared to the 20-session average of 10.0 billion shares, the majority (nine out of the 11) of S&P 500 sector indexes rose. The consumer discretionary sector led the gains with a 2.77% increase, followed by a 1.17% gain in communication services.
Key developments in individual companies also impacted stock performance. Qualcomm, the chipmaker, saw a 3.9% increase after signing a new deal with Apple to supply 5G chips for the iPhone maker until at least 2026. Furthermore, Hostess Brands experienced a significant surge of 19.1% upon J. M. Smucker’s announcement of its plans to acquire the Twinkies-maker in a $5.6 billion deal.
The S&P 500 saw 14 new highs and 11 new lows, while the Nasdaq recorded 36 new highs and 199 new lows. This market activity reflects a balanced view among investors, with some stocks reaching new highs while others faced lows.
As the market eagerly awaits the release of inflation data, it remains to be seen how these figures will shape the Federal Reserve’s future monetary policy decisions. The stock market’s reaction to these developments will be closely watched and will impact investor sentiment moving forward.
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