April 15 (Reuters) – The Nasdaq hit an intraday all-time high and closing record on Wednesday, its first since October, as investors returned to technology stocks, signaling a rebound in risk appetite after weeks of concerns over war-related economic disruption and fears about the labor-force impact of AI.
The Nasdaq Composite rose 1.6% to hit a fresh intraday high above 24,020 points, eclipsing its previous peak of 24,019.99 set on October 29, when AI bellwether Nvidia crossed $5 trillion in market valuation for the first time. The index also surpassed its closing high set the same day.
Tech stocks suffered sharp declines earlier this year, driven by concerns about lofty valuations, the disruptive impact of artificial intelligence and fears that expansive spending by big technology companies will not generate the necessary returns.
AI tools introduced by Anthropic in early February added to worries that traditional businesses of software companies could be disrupted, making it a double whammy for the tech sector.
The Nasdaq confirmed in late March that it had been in a correction – a 10% drop from its previous peak – as the Middle East conflict broke out, with a surge in oil prices driving concerns about inflation and clouding the monetary policy outlook.
However, a ceasefire between the U.S. and Iran and efforts to end the war have since lifted risk appetite, driving investors back into heavyweight tech and AI names that drove U.S. stocks to record highs last year.
Chipmakers have outperformed the broader market this year, among the biggest percentage gainers on the S&P 500. Among the Magnificent Seven, Amazon.com outperformed peers as investors show more confidence in its AI expansion efforts.
The rush to own tech stocks comes as markets head into another quarterly results season in which S&P 500 information technology earnings are expected to grow 46.2%, compared with 35.8% growth seen at the beginning of the year. It would be the biggest profit increase of any sector, according to LSEG I/B/E/S data until April 10.
(Reporting by Purvi Agarwal in Bengaluru; additional reporting by Caroline Valetkevitch in New York; Editing by Maju Samuel, Colin Barr, Rod Nickel)
Comments