To The Moon

Last week, U.S. stocks exhibited significant divergence, with the Dow Jones Industrial Average $DJIA(.DJI)$  , dominated by cyclical sectors, falling sharply, while large-cap tech stocks propelled the NASDAQ 100 Index $NASDAQ(.IXIC)$   and S&P 500 $S&P 500(.SPX)$  Index indices to continue their upward momentum.

Nvidia Boosts Tech Stocks Again

NVIDIA provided a substantial boost to U.S. tech stocks, even as the broader market pulled back due to ongoing concerns about high interest rates. Nvidia's impressive revenues of $26 billion exceeded Wall Street's expectations, reinforcing the strong performance of other tech giants like Microsoft, Alphabet, Amazon $Amazon.com(AMZN)$  and Meta Platforms $Meta Platforms, Inc.(META)$  . This helped the tech-heavy Nasdaq continue its gains.

Conversely, the release of FOMC minutes revealed that some members favored maintaining high interest rates for an extended period, which kept U.S. Treasury bond yields close to 4.5%. High bond yields make stocks less attractive compared to bonds and also strengthen the dollar, negatively impacting the earnings of large U.S. companies with significant overseas operations. This contributed to declines in the S&P 500 and Dow Jones indexes.

Market Outlook

Given the current conditions, the market faces a tug-of-war between robust tech sector performance, led by Nvidia and other major players, and the broader market pressures from high interest rates and strong U.S. dollar. As such, the market may experience short-term volatility. Investors should keep a close eye on key economic indicators and Fed policies, which will be crucial in determining whether the market will hit new highs or pull back.

$Amazon.com(AMZN)$