The technology sector roared higher on Wednesday trading, reacting to the November 2024 inflation report. The S&P 500 (IVV) also traded higher.
The Labor Department posted that CPI increased by the most in seven months. Prices increased by 0.3% but stock markets reacted positively. They priced in a near certainty that the Federal Reserve will cut interest rates by 25 basis points later this month. Inflation rose for shelter, albeit due to motel and hotel costs. Investors may continue buying shares of Hilton Worldwide (HLT) and Marriott (MAR). Those firms may raise prices without losing business.
Food prices increased by 0.4%. Grocery store food prices jumped by 0.5%. Again, markets view the 8.2% increase in egg prices as temporary. The avian flu caused egg inflation. In the sector, Walmart (WMT) and Costco Wholesale (COST) are the most attractive holdings.
Tech stocks leading the markets higher included Broadcom (AVGO), Apple (AAPL), Nvidia (NVDA), Alphabet (GOOG), and Amazon (AMZN). Investors wanted to maximize returns ahead of the rate cut by buying companies in the fast-growing sectors. Investments in semiconductors will continue to increase. Companies still plan to raise their purchases of AI-related hardware products.
Your Takeaway
Just as bitcoin (BTC-USD) crossed $100,000 with ease, Nasdaq did so too. Profit-takers may sell from here but the 20,000 level is likely the next support zone.