Tech Stocks Surge as Melt Up Materializes
The Nasdaq jumped another 1% on Thursday, extending its winning streak to 4 sessions, as expectations solidified for a modest 25 basis point rate hike next week.
The tech-heavy index has now surged over 3.5% this week alone, adding over $1 trillion in market cap, as once-battered giants like Apple, Microsoft and Amazon attract frenzied dip buying.
The melt up comes as investors recalibrate for a Goldilocks 25bp "baby step" from the Fed versus a larger 50bp cut that was previously priced in.
Thursday's cooling wholesale inflation data cemented the case for a 25bp tap on the brakes rather than an aggressive slowdown.
Market watchers suggest the path is now clear for tech to hit new all-time highs soon. As one strategist put it: "With the Fed slowing, tech has become the decisive leader with significant upside potential."
As long as inflation keeps moderating and economic risks stay contained, the new melt up leg may just be getting started for the tech trade.
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