Nasdaq 100 adds $700 billion in value as US inflation eases

Monitors display stock market information at the Nasdaq MarketSite in New York.

Monitors display stock market information at the Nasdaq MarketSite in New York.

Major US technology and internet stocks soared on Thursday, adding hundreds of billions of dollars in market value, after investors welcomed the latest inflation data as a positive sign about where Federal Reserve policy could be headed

Inflation cooled in October by more than what was forecast, suggesting that one of the biggest headwinds facing tech could be easing. It could also give the Fed room to slow its pace of interest-rate hikes, easing another strain on the multiple of so-called growth stocks.

“Investors have been wanting to bid prices higher on any catalyst, and this is as good as any,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “The magnitude of the move seems a bit excessive, since I think it’s too early to say we’ve been given the all-clear signal for tech, but the market has been extremely desirous of anything that could elicit a more dovish response from the Federal Reserve.”

The Nasdaq 100 Index jumped 7.5% in its biggest one-day gain since March 2020. The move added about $ 965 billion in market capitalization. In another tailwind to the day’s rally, the yield on the US 10-year Treasury fell to 3.81%, the lowest since October.

Higher rates and yields are taxing on stocks that are priced on their prospects far out in the future, and such factors have contributed to the Nasdaq 100 falling 29% this year.

The Nasdaq 100 soared following a bullish reading on inflation

The day’s rally in tech was broad-based, with an index of semiconductor stocks up 10% and software up 9.1%; both posted their biggest one-day pops since 2020. Companies that have been particularly beaten down this year climbed the most; a Goldman Sachs basket of the most expensive software stocks climbed 14%, while a Goldman basket for unprofitable tech surged 15%.

Among the market’s biggest names, Apple Inc. gained 8.9%, adding more than $ 190 billion in market value, while Microsoft Corp. surged 8.2%, representing nearly $ 140 billion in created market capitalization. Alphabet Inc. climbed 7.6% and Nvidia Corp. advanced 14%.

Meanwhile, Inc. jumped as much as 12% in its biggest gain since February. The e-commerce and cloud-computing giant was also supported by news it has embarked on a review of expenses.

Meta Platforms Inc. gained 10%, bringing its week-to-date advance to 23%, putting it on track for its biggest weekly jump since July 2013. Recent gains for the Facebook parent have also come after it announced job cuts, a move that was seen as addressing concerns over spending. The stock remains down nearly 70% this year.