What is going on here?
The Dow Jones and S&P 500 hit record highs, and the Nasdaq rose for the sixth straight week, helped by gains in tech stocks and Netflix’s earnings.
What does this mean?
By October 18, 2024, major US indexes led by the Dow Jones and S&P 500 had reached record highs. The Nasdaq soared as Netflix’s stock rose a whopping 11.1%. This was driven by better-than-expected subscriber growth, contributing to a 0.9% lift in the communications services sector. Technology giants Apple and Nvidia added to the momentum. Apple rose 1.2% on iPhone sales in China, while Nvidia rose 0.8% after raising its price target. A 3.1% decline in American Express shares capped the Dow’s gains, but a 0.5% rise in the information technology sector offset some of the decline. Despite concerns about the S&P 500’s valuation approaching 22 times expected earnings, the strong earnings report provided stability against potential election-driven volatility.
Why should we care?
For the market: Technology is in charge.
This week’s market strength highlights the dominance of tech stocks, with big gains for Apple and Nvidia. But the continued rise in small-cap stocks like the Russell 2000 suggests investors are diversifying their strategies. Tech momentum kept the market optimistic, even as sectors such as energy and healthcare faced challenges.
The big picture: High-profile profits.
Strong earnings are laying the foundation for market resilience, even as some sectors weaken. This is critical as markets brace for potential uncertainty from the upcoming US presidential election. Meanwhile, falling oil prices and disappointing SLB results hurt the energy sector and reminded investors of the complex nature of the market.
