Wall Street Gains Momentum After Inflation-Driven Selloff
Wall Street Rebounds After Inflation-Driven Selloff
After a selloff in the prior session due to a hot inflation report, Wall Street gained some steam on Wednesday. Nvidia (NASDAQ:) topped Alphabet (NASDAQ:)’s market value to become the third-most valuable U.S. company.
Nvidia Overtakes Alphabet in Market Value
Nvidia overtook Google-parent Alphabet’s stock market capitalization, days before the poster child of AI boom is due to report its fourth-quarter results. Their shares were up 1.8% and 0.2%, respectively.
Rate-Sensitive Megacaps Gain
Other rate-sensitive megacaps Meta Platforms (NASDAQ:) and Nvidia and other chip stocks like Advanced Micro Devices (NASDAQ:) and Qualcomm (NASDAQ:) gained between 1.6% and 2.2%.
Inflation Concerns Affect Market
The indexes had slumped to over one-week lows on Tuesday as core consumer prices in January stayed at nearly double the Fed’s 2% target, forcing investors to reassess their rate cut expectations.
Analyst’s View on Inflation
“What’s most disconcerting, is the pick up in inflation almost across the board, and certainly in the service side, obviously the hottest part of the economy,” said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest.
Comments from Chicago Fed President
Providing some relief were Chicago Fed President Austan Goolsbee’s comments that the path back to 2% inflation target would still be on track even if price increases run a bit hotter-than-expected going ahead, and the central bank should be wary of waiting too long before cutting rates.
Market Euphoria and Monetary Policy
Euphoria around an early start to monetary policy easing had fueled a Wall Street rally since November, paving the way for a bull market for the this year. However, policymakers might have to wait a bit longer for more evidence of easing price pressures in the face of a resilient U.S. economy.
Market Performance and Sector Analysis
At 9:50 a.m. ET, the was up 58.98 points, or 0.15%, at 38,331.73, the S&P 500 was up 24.26 points, or 0.49%, at 4,977.43, and the was up 93.83 points, or 0.60%, at 15,749.43. Ten out of the 11 S&P 500 sectors advanced, led by a 1% gain in the communication services sector, while the small-caps index added 1.4%.
Positive News from Ride-Hailing Platforms and Crypto Stocks
Lyft (NASDAQ:) surged 31.6% after the ride-hailing platform’s profit beat estimates and it said it would generate positive free cash flow for the first time in 2024. Rival Uber (NYSE:) gained 8.8%, also boosted by a $7-billion share buyback plan. Robinhood (NASDAQ:) Markets jumped 14.8% following a surprise fourth-quarter profit. Crypto stocks like Coinbase (NASDAQ:), Marathon Digital (NASDAQ:) and Riot surged between 10.5% and 14.7% as bitcoin’s market value crossed $1 trillion for the first time since Nov. 21.
Market Statistics
Advancing issues outnumbered decliners by a 5.06-to-1 ratio on the NYSE and a 3.68-to-1 ratio on the Nasdaq. The S&P index recorded 21 new 52-week highs and two new lows, while the Nasdaq recorded 34 new highs and 24 new lows.
