Nasdaq 100 hits peak as stable Fed rates boost Wall Street optimism

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Nasdaq 100 hits peak as stable Fed rates boost Wall Street optimism
Credit: © Reuters.

Wall Street enters Thanksgiving with a buoyant mood, as the Nasdaq 100 reaches a high not seen since early last year. This surge comes amid stable Federal Reserve interest rates, which have bolstered market confidence and supported equity growth across various sectors. Investors are embracing a period of relative calm as the central bank's cautious approach to rate hikes appears to align with inflation targets, according to the latest Fed minutes.

In the UK, the stock market reacted positively to corporate news, with Sage Group (LON: SGE )'s shares jumping after the announcement of a stock buyback program, placing it among the top movers on the FTSE 100 . In contrast, Kingfisher (LON: KGF ) saw its shares take a hit following a profit warning, yet there remains potential for recovery as consumer spending is expected to increase in response to recent tax cuts.

U.S. Treasury yields have risen in reaction to consumer inflation expectations over the next year. Quincy Krosby of LPL Financial (NASDAQ: LPLA ) has expressed concerns that these entrenched inflation perceptions could pose challenges to the Federal Reserve's policy efforts. The two-year Treasury yield has surpassed 4.9%, and the U.S. dollar experienced its most significant uptick in weeks.

In tech news, Apple (NASDAQ: AAPL ) is nearing a market value of $3 trillion, Amazon (NASDAQ: AMZN ) benefits from a surge in pre-holiday activity, and Microsoft (NASDAQ: MSFT ) sees gains following an announcement related to Sam Altman's OpenAI.

The labor market is showing signs of cooling, with U.S. jobless claims decreasing. However, October's durable goods orders have taken a downturn due to reduced demand for business equipment and aircraft.

Oil prices have dipped as OPEC+ postponed their meeting, leaving markets uncertain about potential supply adjustments.

On the corporate side, Deere (NYSE: DE ) & Co.'s profit projections did not meet analysts' expectations amid slowing demand. Autodesk (NASDAQ: ADSK ) faced a downgrade from Piper Sandler, and disappointing earnings reports emerged for Guess?, Nordstrom (NYSE: JWN ), and Urban Outfitters (NASDAQ: URBN ). Virgin Galactic also grappled with a downgrade from Morgan Stanley (NYSE: MS ) amid forecasts of a hiatus in revenue flights between mid-2024 and mid-2026.

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