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Nasdaq Notches 0.1% to Cap 3-Week Rally, Eyes on Fed’s Meeting Minutes

Nasdaq Notches 0.1% to Cap 3-Week Rally, Eyes on Fed’s Meeting Minutes

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Key Takeaways

  • The Nasdaq joins its peers in 3-week winning streak
  • Fed’s meeting minutes on deck for Tuesday

Broad-Based Success

The Nasdaq crept higher on Friday, locking in a three-week winning streak with a small but mighty gain of 0.1%. The increase nudged the tech-heavy index to join its peers in green territory, each riding on the highs of a three-week rally. The blue-chip S&P 500 advanced 0.1% by market close, while the Dow Jones Industrial Average rode on its coattails, scraping by with a 0.01% gain.

In all, tech took the lead, with the Nasdaq adding 2.4% for the week, summing up a 12% rise during its victory run. Driving the point even further home, the Nasdaq has outperformed its peers in the year to date, soaring 35% so far against the S&P 500’s still-impressive 17% and the Dow Jones’ meeker 5.4%. 

The broad-based gains piggybacked on better-than-expected inflation data released last week. Markets felt the pressure ease when the US Consumer Price Index (CPI) print reflected a cool 3.2% increase, knocking out forecasts of 3.3%. The data points to the Federal Reserve’s hawkish “higher-for-longer” strategy to curb inflation to 2%, suggesting the rate hikes are finally starting to make an impact. 

It’s good news for the Nasdaq, as tech stocks usually move to the rhythm of inflation data as low rates amp up investors’ risk appetite, while higher inflation (meaning higher borrowing costs) send investors towards safer bets. 

To further push the Nasdaq in the right direction, chipmaker Intel’s stock climbed an impressive 13% for the week, securing a 35% rise since the end of October when it reported third-quarter revenue of $14.2 billion. 

Looking ahead, tech-giant Nvidia is set to report quarterly earnings after market close on Tuesday. Boasting a hefty market cap of $1.21 trillion, Nvidia is pinned fifth among the Magnificent Seven. Should the earnings results be as hoped, or better, both the Nasdaq and the S&P 500 should feel the effects.

Up Next

The week ahead looks generally quiet. With Thanksgiving on Thursday, markets will feel a bit of a hush as the trading week shortens to only four days with Friday slashed to only the first half. That being said, market participants can look forward to earnings from tech powerhouse Nvidia and fashion retailers Urban Outfitters and Abercrombie & Fitch. 

For a deeper insight into inflation, investors and traders alike will be keeping a close eye out for the Federal Reserve’s minutes from their Oct. 31 – Nov. 1 meeting, slated for release on Tuesday. The central bank recently decided to maintain its benchmark interest rate at 5.25%-5.50%. 

The upcoming meeting minutes will hopefully shed some light on why the policymakers hit pause, while traders hope to find some meaningful information that will give a glimpse into the Fed’s overall outlook on the current state of the economy. 

Investors are keeping their fingers crossed that the minutes will prove that monetary policy is already sufficiently tight, although Fed Chair Jay Powell recently left the light on for further hikes. 

In a nutshell, things are looking quiet on the economic horizon. That doesn’t quite mean that now is the time to relax – this may actually be the perfect time to reflect on your year-end strategy. Be mindful of upcoming earnings reports, factoring in the power they have to introduce volatility to the market.