The S&P 500 And Dow Jones Industrial Average Pushed Further Into Record Territory This Week And The Nasdaq Composite Shifted Back Into Rally-Mode.
Most of the action over this holiday-shortened week occurred on Thursday as participants reacted to another blowout quarter from NVIDIA (NVDA). NVIDIA's report renewed the market's enthusiasm for AI-related stocks, other growth stocks, and semiconductor shares.
NVDA surged 8.5% this week, topping a $2 trillion market-cap for the first time, and leaving its gain this year just below 60%. The PHLX Semiconductor Index (SOX) jumped 1.9%.
A fear of missing out on further gains was a powerful directional driver this week that added to the post-NVDA earnings rally. Even on Friday, when growth stocks and semiconductor shares underperformed, the broader market finished with a positive bias.
Notably, the information technology sector (+2.0%) was the second biggest gainer this week despite the jump in NVDA shares, trailing only the consumer staples sector (+2.1%). All 11 S&P 500 sectors registered gains this week, but the energy (+0.4%) and real estate (+0.9%) sectors still lagged index performance by a decent margin.
The market drew added support from ongoing optimism about rate cuts following comments from Fed officials. Fed Vice Chair Jefferson, who said this morning that it will likely be appropriate to begin cutting rates later this year, adding that he is cautiously optimistic about the way inflation is evolving. Also, Philadelphia Fed President Harker (not an FOMC voter) said he believes the Fed may be in a position to see the fed funds rate decrease this year, but cautions anyone looking for it right now and right away.
Market participants were also digesting the minutes for the January 30-31 FOMC meeting, which were scripted largely as expected. Fed Chair Powell effectively "wrote them" for the market when he conducted his press conference following that January meeting, and several Fed officials in the interim have paraphrased them.
The 10-yr note yield fell four basis points this week to 4.26% and the 2-yr note yield rose seven basis points to 4.72%.
S&P 500: +1.7% for the week / +6.7% YTD
Nasdaq Composite: +1.4% for the week / +6.6% YTD
Dow Jones Industrial Average: +1.3% for the week / +3.8% YTD
S&P Midcap 400: +1.1% for the week / +2.8% YTD
Russell 2000: -0.8% for the week / -0.5% YTD