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Published: April 29, 2024
Updated: April 29, 2024

Global Market Insights: US Markets Surge as Tech Stocks Shine, Despite Inflation Concerns

The US stock market enjoyed its best week since November, fueled by strong performances from technology companies with robust earnings. This positive sentiment overshadowed concerns about rising bond yields and inflation.

Tech Stocks Lead the Rally

The Dow Jones Industrial Average gained 154 points, the S&P 500 climbed 52 points, and the Nasdaq Composite surged an impressive 316 points. This surge was largely driven by technology stocks, which benefited from higher earnings.

Fed Rate Hikes Pushed Back, Yen Weakens

Expectations for a Federal Reserve rate cut have been delayed until December. This news, coupled with a 34-year low for the Japanese Yen against the US dollar, further bolstered investor confidence.

Alphabet Reaches Major Milestone

Alphabet, the parent company of Google, witnessed a remarkable 10% surge in its stock price. This impressive growth pushed its market capitalization above $2 trillion for the first time ever. Other tech giants like Microsoft, Nvidia, AMD, and Amazon also joined the rally.

Inflation Remains Elevated

The Personal Consumption Expenditures (PCE) price index and core PCE index in the US rose by 0.3% month-on-month in March, as predicted. The annual PCE inflation rate accelerated to 2.7%, exceeding forecasts of 2.6%. The annual core PCE rate remained steady at 2.8%, matching the previous month but surpassing expectations.

Dollar Strengthens Across Markets

The US dollar gained strength across the board, alongside gold and crude oil prices. The US 10-year Treasury bond yield also climbed to 4.66%.

The US stock market appears to be shrugging off inflation concerns for now, with technology stocks leading the charge. However, rising bond yields and persistent inflation could pose challenges in the future. It remains to be seen how the Federal Reserve will react to these developments and whether it will adjust its monetary policy stance.