On December 12, 2024, the Nasdaq composite index reached a historic milestone, closing at an all-time high of 20,001.42 points. This achievement was largely fueled by a remarkable 33% increase in technology stocks throughout the year, with major contributors including Nvidia, Microsoft, and Apple. The surge in tech stocks was driven by optimism surrounding anticipated earnings growth linked to artificial intelligence (AI) advancements, as well as expectations for looser regulations under the newly elected President Donald Trump [001f7dbe].
However, on December 13, 2024, Wall Street experienced a pullback, with the Nasdaq closing at 19,735.12, down 1.3% from its record high. The S&P 500 also gained 0.61% to close at 6,086.49, while the Dow Jones industrial average added 308.51 points, marking its first close above 45,000 at 45,014.04 [8b43e337]. This downturn in the Nasdaq followed unexpected increases in unemployment benefits applications and higher-than-expected wholesale inflation, raising concerns about the economy's stability [f29e2c63].
Despite the pullback, the Nasdaq's ascent had previously followed its crossing of the 19,000-point mark in early November 2024, shortly after Trump's election victory [001f7dbe]. Analysts noted that three tech giants have now joined the exclusive $3-trillion market capitalization club, further highlighting the strength of the sector [001f7dbe]. On the same day of the pullback, the S&P 500 had reached 57 all-time highs in 2024, demonstrating the market's overall resilience despite recent fluctuations [f29e2c63].
In response to the Nasdaq's milestone, the Nifty IT index in India surged by 575 points or 1.29% on December 12, 2024. Coforge led the gains with an increase of nearly 4%, followed closely by LTI Mindtree and Tech Mahindra [e162bf58]. Analysts, including Tom Bruce, noted that the rise in the Nasdaq strengthened bets on favorable decisions from the Federal Reserve, further boosting investor confidence [e162bf58].
Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, emphasized that the positive economic data played a crucial role in bolstering market confidence [4767f7fe]. Meanwhile, shares of Salesforce rose nearly 11% after beating earnings estimates, and Marvell Technology shares surged 23% after exceeding expectations [8b43e337]. Overall, the Nasdaq's historic climb reflects a broader recovery and growing confidence among investors in the U.S. economy, as well as its impact on global markets, including mixed performances in Indian markets amid these developments [001f7dbe].
As the U.S. labor market showed robust recovery with nonfarm payrolls rising by 227,000 in November, economists are anticipating the upcoming employment data due on December 15, which is expected to show 214,000 jobs added in November [8b43e337]. Fed Chair Jerome Powell indicated a cautious approach to rate cuts, suggesting that while the economy is improving, the Federal Reserve will proceed carefully [8b43e337].