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Tech stocks surge, pushing Nasdaq to new record high in stock market rally

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“Tech stocks soar as investors embrace the digital revolution, while traditional sectors struggle to keep up with the changing landscape of the stock market today.”

U.S. stock futures opened slightly higher ahead of a busy week filled with important events, including a Federal Reserve rate decision, the release of the jobs report, and Apple’s earnings report. The S&P 500 futures added 0.3%, Nasdaq-100 futures gained 0.4%, and Dow Jones Industrial Average futures were up 0.1%.

Last week, the S&P 500 fell into correction territory, dropping 2.5% and bringing its total decline from its 2023 high to 10.6%. It is also on track for its third consecutive negative month, the first such streak since 2020.

Investors are closely watching the Federal Reserve’s decision, which is expected to keep its benchmark interest rate unchanged. With rising interest rates being the main reason behind the stock market correction, investors hope the Fed will signal that it is done raising rates. The 10-year Treasury yield started the week above 5% but finished at 4.84%.

Friday will bring the October jobs report, and investors are hoping for some signs of slowing in the labor market. This would give the Fed confidence in maintaining its current stance on interest rates for the rest of the year.

Apple’s earnings report on Thursday will be closely watched, as the company is currently in a correction, down 15% from its 52-week high.

The sell-off in the market has primarily affected Nasdaq and tech shares, which are considered to be the most vulnerable to rising interest rates. The Nasdaq Composite is down more than 12% from its 2023 high and is firmly in correction territory. Disappointing earnings from big tech companies like Google-parent Alphabet have contributed to the sell-off.

Despite the recent challenges, Tom Lee, co-founder of Fundstrat Global Advisors, believes the FANG (Facebook, Amazon, Netflix, Google) thesis is not broken. He sees this as an opportunity for investors who haven’t owned FANG stocks to get in.

The earnings reports will kick off with McDonald’s quarterly update before the bell on Monday.

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