Stock market trader Peter Tuchman, left, works on the floor of the New York Stock Exchange.
Spencer Platt | Getty Images
the Dow Jones Industrial Average Technology stocks rose to fresh record highs on Tuesday, as the market rally continued to expand beyond big tech names on hopes of future interest rate cuts.
The Dow Jones rose 511 points, or 1.3%, setting a new intraday record. Standard & Poor's 500 It added 0.4%, while Nasdaq Composite Flash around his flat line.
American bank And Morgan Stanley Technology and software stocks rose more than 5% and 2%, respectively, after earnings beat analysts’ expectations. The companies are the latest big names to report quarterly results as the new reporting season begins.
Dow Jones Index One Day
Investors also continued to shift from large-cap tech stocks to small-cap stocks, with the former seeing huge gains amid optimism over artificial intelligence, while the latter are seen as beneficiaries of lower interest rates.
Focus on small cap companies Russell 2000 The Nasdaq rose about 2% and was on track for a fifth straight day of gains, while the tech-heavy Nasdaq fell. It’s worth noting that the artificial intelligence company Nvidia The software giant Microsoft Each fell by more than 1%.
In the past week alone, the Russell 2000 has gained more than 10%, while the Dow Jones has gained more than 3%. The Nasdaq has changed little over the same period.
“There is a lot of momentum behind this rotation from large-cap tech to small-cap and mid-cap stocks,” said Ross Mayfield, investment strategist at Baird. “It is a rotation, but it is more about the upside in the more cyclical sectors of the market than a referendum on the long-term potential of AI.”
This comes as hopes are growing that the Federal Reserve will start cutting interest rates, having managed to effectively reduce inflation without significantly weakening the economy. Traders now see a 100% chance of borrowing costs falling by September, according to the CME FedWatch tool.
Retail sales data released Tuesday showed signs of economic resilience. June sales were unchanged, while economists polled by Dow Jones had forecast a 0.4% decline. Excluding autos, sales rose 0.4%, a bigger gain than the consensus forecast of 0.1%.
“This data should be positive for markets,” said Quincy Krosby, chief global strategist at LPL Financial. “Investors are in favor of the Fed starting its easing cycle against a strong economic backdrop.”
