Nasdaq Gains 2% as Google Surges and Chip Stocks Rally
On Monday, chip stocks and major technology shares experienced a significant rally, building on the gains seen on Friday. This surge suggests a decline in concerns regarding a potential AI bubble. The S&P 500 index rose by 1.5%, reflecting positive market sentiment.
Market Drivers and Economic Indicators
Market enthusiasm was fueled in part by comments from former President Donald Trump. He indicated having a productive phone call with Chinese President Xi Jinping and announced a planned visit to Beijing in April. This development has helped revive hopes of improved U.S.-China relations.
Additionally, growing expectations that the Federal Reserve may cut interest rates next month powered the market rally. Interest-rate futures tracked by CME showed that the probability of a rate reduction in December surpassed 80%, a notable increase from 71% on Friday and 42% the previous week.
International Markets and Cryptocurrency Trends
In the international landscape, European defense stocks witnessed a decline. This dip followed positive news from the White House about progress in the ongoing peace talks with Ukraine.
- European natural gas futures also saw a drop.
- Bitcoin was trading around $89,000, following a challenging week marked by its worst weekly loss since February.
In Asia, Alibaba’s shares rose, significantly contributing to the performance of Hong Kong’s Hang Seng Index. Notably, Japanese markets remained closed for a holiday.
Overall, the interplay of rising chip stocks, favorable economic indicators, and geopolitical developments significantly impacted the Nasdaq and broader markets.
