Federal policies and rate cut expectations fuel tech gains, pushing trillion-dollar giants higher
Alphabet, Tesla, Amazon, and Meta all reached new milestones on Wednesday, lifting the Nasdaq to its first close above 20,000, according to CNBC.
The seven trillion-dollar tech companies added an estimated US$416bn in market cap during the day, propelling the index to a record high of 20,034.89, a 1.8 percent increase.
Alphabet's stock climbed 11 percent over two days, closing at US$195.40.
This surge followed the unveiling of its latest quantum computing chip, which the company described as a ‘breakthrough’ and a significant step toward practical applications in drug discovery and battery design.
The new closing price surpassed Alphabet's previous high of US$191.18, recorded on July 10.
Tesla reached a new high after closing at US$424.77, up nearly 6 percent on Wednesday.
The stock has surged 69 percent since Donald Trump’s election victory, attributed to expectations of favourable policies under the new administration. Tesla last hit its record of US$409.97 on November 4, 2021.
Amazon, Apple, and Meta have continued to set new records, though Apple dipped 0.5 percent on Wednesday.
Meanwhile, Microsoft is about 4 percent below its July high, and Nvidia is trading 6 percent under its record from last month.
The tech sector’s gains align with market optimism following Trump’s victory on November 4. Investors anticipate reduced regulatory pressure and increased opportunities for dealmaking under the new administration.
On Tuesday, Trump named Andrew Ferguson as the next chair of the Federal Trade Commission, succeeding Lina Khan.
Ferguson, an FTC commissioner, was described by Trump in a Truth Social post as “the most America First, and pro-innovation FTC Chair in our Country’s History.”
Tom Lee, managing partner at Fundstrat Global Advisors, told CNBC’s ‘Closing Bell’ that the tech sector remains bullish, with expectations of a Federal Reserve rate cut this month.
November’s US consumer price index revealed a 2.7 percent 12-month inflation rate, reinforcing market confidence in the cut.
“When interest rates fall, the megacaps actually are very sensitive to that,” Lee explained. “Today was a day where the odds of a December cut increased, and that’s bullish for tech.”
