Stock market in New York persists in breaking records following reduced interest rates
The tech sector is experiencing a surge in investor interest following the US Federal Reserve's interest rate cut and significant deals between industry giants.
The Fed lowered the interest rate by 0.25 percentage points, a move that has put technology stocks in the spotlight among investors. Consequently, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100, Nasdaq Composite, and Nasdaq 100 have all shown steady growth.
The Dow Jones Industrial Average gained 0.29 percent to 46,150 points, while the S&P 500 rose 0.57 percent to 6,638 points. The Nasdaq 100 climbed 1.12 percent to 24,495 points, and the Nasdaq Composite advanced 1.03 percent to 22,492 points.
One of the most notable deals is the partnership between Nvidia and Intel. Nvidia invested $5 billion (€4.22 billion) in Intel, a move that sent Intel's shares soaring by almost 26 percent and landed them at the top of the Nasdaq 100. AMD, Intel's competitor, experienced a 3 percent loss following this deal.
Meanwhile, Nvidia's shares rose by around 3 percent at the Dow's peak following the Intel investment. This partnership is expected to have significant implications for the tech industry, shaping market positions and valuations.
Microsoft's investment of over $13 billion in OpenAI is another game-changer. This investment has significantly increased OpenAI's valuation to approximately $20–30 billion by 2023, reflecting strong strategic partnerships that are influencing market positions and valuations. Google and Amazon have also invested billions in Anthropic, enabling its models to be available on both Google Cloud and AWS.
CrowdStrike, a leading player in the cybersecurity sector, has also made headlines. The company, which was the second-best performer in the Nasdaq Composite, gaining 10.3 percent, continues to displace established providers, unify security processes, and offer operational simplicity on a large scale. Analyst Brian Essex from JPMorgan bank drew a positive conclusion from CrowdStrike's investor and user conference this year, stating that the company is well-positioned to maintain its dominant market position.
Despite the political pressure on the Fed that could lead to higher inflation, according to Eric Winograd of AllianceBernstein, the insights from the US Fed are unlikely to lead to profit-taking, according to Andrew Jackson, head of Japan equity strategy at Ortus Advisors.
Weekly initial jobless claims declined significantly on Thursday, indicating a positive trend in the labor market, which remains crucial for investors, according to Index Radar. The labor market remains a key factor in the overall health of the economy, and any significant changes could impact investor confidence and the tech sector.
Investors are betting on investments in new technologies due to falling interest rates, a trend that is likely to continue as the tech sector continues to evolve and shape the future of the global economy.
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