Nasdaq Composite Hits New Record High as Tech Stocks Lead Rally

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by Bhushan Akolkar · 2 min read
Nasdaq Composite Hits New Record High as Tech Stocks Lead Rally
Photo: Depositphotos

Wall Street remains optimistic about the earnings reports of top tech companies coming next week. While tech leads Nasdaq, the market maintains caution on the hope of approval of the next stimulus bill. Unemployment insurance claims drop for the week ending January 16.

On Thursday, January 21, Nasdaq Composite (INDEXNASDAQ: .IXIC) surged 74 points to hit a new record high of 13,530.92. The tech-heavy index surged on the backing of a strong rally in the tech stocks.

Wall Street remains optimistic as a majority of the tech giants are announcing their earnings report next week. On Thursday, Apple Inc (NASDAQ: AAPL) stock surged 3.67% closing at $136.87. The price surge after Morgan Stanley‘s top analyst Katy Hubert said the December quarter earnings could be bigger than expected. This week so far, AAPL and Facebook Inc (NASDAQ: FB) stocks have jumped 7.7% and 8.7% respectively. On the other hand, Microsoft Corporation (NASDAQ: MSFT) 5.8% over the last week.

In the previous session on Wednesday, equities closed at a record high after President Joe Biden took oath as the 46th President of the United States. Earlier this week, the Biden administration has already proposed a $1.9 trillion economic stimulus plan. Besides, the market is optimistic that the Biden-administration will accelerate the rollout of COVID-19 vaccines. E-commerce giant Inc (NASDAQ: AMZN) has already offered a helping hand to President for the effective distribution of the vaccines. Keith Parker, head of equity strategy at UBS, said:

“We see the pace of vaccinations as a key driver of equities through 2021, similar to how shifts in mobility and Covid cases drove equities in 2020. Removing bottlenecks for administering doses would present an upside case near-term.”

Wall Street Maintains Caution amid Tech Stocks Rise

Since the market is currently trading at an all-time high, Wall Street is taking a cautious approach at this point. Interestingly, the weekly jobs data was on a positive note for the first time in the last few months.

For the week ending January 16, the unemployment insurance totaled 900,000 against the expected 925,000. All eyes are currently on whether the Congress and the Senate approve the $1.9 stimulus plans. With the Democrats having a clear majority in both, this shall not be a major task at hand. House Speaker Nancy Pelosi said that the bill is likely to be passed in the first week of February.

On the very first day in office, the President signed 10 executive orders. The President also announced putting on hold the regulations passed by FinCEN to regulate “unhosted” cryptocurrency wallets.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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