On Monday, the Nasdaq Composite hit a new high as investors re-entered growth-oriented firms ahead of a major Federal Reserve meeting.
The tech-heavy index surged 0.7 percent to 14,174.14, an all-time closing high, surpassing the previous high set on April 26. The technology sector propelled the S&P 500 to a new high closing of 4,255.15, up 0.2 percent. The Dow Jones Industrial Average fell 85.85 points to 34,393,75, or about 0.3 percent.
As bond yields fall, investors are giving growth and technology firms a second shot. On Friday, the 10-year Treasury slid to a three-month low of 1.43 percent. Last week, Cathie Wood’s Ark Innovation ETF, which focuses on disruptive technologies, returned around 6%. Even as the benchmark Treasury rate went back to 1.5 percent on Monday, the fund gained 1.9 percent.
Apple and Netflix both saw their stock prices rise by more than 2 percent while Amazon, Microsoft, and Facebook also saw rises.
Tesla CEO, Elon Musk boosted cryptocurrency enthusiasm on Sunday by saying Tesla will restart Bitcoin transactions after it certifies miners are using appropriate renewable energy. On Monday, Bitcoin reclaimed the $40,000 mark. Tesla, a big holder of Bitcoin, climbed nearly 1.3%.
The Federal Reserve’s two-day policy meeting is expected to dominate investor sentiment this week. Despite the fact that the central bank is unlikely to intervene, its projections for interest rates, inflation, and the economy might sway markets. The Fed might raise its rate rise projection after announcing in its latest quarterly update that it would hold its benchmark rate at zero through 2023, according to the Wall Street Journal.
Following the release of the Fed’s announcement on Wednesday, Chairman Jerome Powell will address the press. Traders will be looking for indications in his comments about when the Fed would start to taper its monthly asset purchases, especially in light of recent higher-than-expected inflation data.
The Fed meeting this week, according to billionaire hedge fund manager Paul Tudor Jones, might be the most important in Powell’s tenure, and he warned that if he doesn’t do a good job of signaling a taper, risk assets might suffer a large sell-off.