On Wednesday, the S&P 500 gained 0.9%, approaching its all-time high, while the Nasdaq 100 surged 1.7%, setting a new record. This upbeat market performance was driven by optimism surrounding the latest inflation report, which aligned with economists' expectations, and strengthened speculation of a Federal Reserve rate cut in its upcoming meeting.

However, the Dow Jones Industrial Average declined by 104 points, reflecting mixed sentiments in the market as UnitedHealth shares plummeted by 5.6%.

Technology Stocks Lead the Rally

The tech-heavy Nasdaq witnessed strong contributions from major technology and growth stocks, pushing the sector’s year-to-date gains past 24%. The rally was led by the "Magnificent Seven" mega-cap stocks, each delivering significant gains:

• Alphabet rose 5.5% after announcing a major quantum computing breakthrough, showcasing advancements in cutting-edge technology.
• Tesla soared by 5.9%, continuing its recent upward momentum.
• Nvidia climbed 3.1%, reinforcing its leadership in the AI and semiconductor sectors.

Other notable contributors included:

• Meta Platforms, up 2.1%,
• Amazon, gaining 2.3%, and
• Microsoft, which increased by 1.3%.

Sectoral Performance

The broader market rally saw tech stocks spearheading the gains, followed by strong performances in communication services and consumer discretionary sectors. These sectors have been major beneficiaries of the shift in market sentiment toward growth-oriented equities.

Dow Jones Struggles Amid UnitedHealth Drop

Despite the broader market optimism, the Dow Jones index fell due to a sharp 5.6% decline in UnitedHealth Group's shares, which weighed heavily on the index. Concerns surrounding healthcare policies and company-specific developments contributed to the underperformance of the stock.

Inflation Data and Fed Rate Cut Expectations

The positive momentum in the equity markets was fueled by November's inflation report, which came in line with market expectations. This report bolstered hopes for a Federal Reserve interest rate cut, which investors anticipate could be announced in the next Fed meeting. A rate cut would provide further support for growth stocks, especially in the tech sector.

Outlook for the "Magnificent Seven"

The "Magnificent Seven" mega-cap stocks have been instrumental in driving the markets throughout 2024. These companies, representing the leaders in technology and innovation, continue to attract investor interest:

• Alphabet's quantum computing breakthrough could redefine the future of AI and advanced computing.
• Tesla's stock surge reflects continued confidence in the EV market.
• Nvidia's dominance in the AI chip segment ensures its leadership position in the tech revolution.

Conclusion

The US stock market demonstrated resilience and optimism, with tech stocks leading the charge. While the S&P 500 and Nasdaq gained momentum, challenges in the healthcare sector weighed on the Dow Jones. As the market eyes the Federal Reserve's decision, growth-oriented stocks, particularly in technology, remain the focal point for investors.

Stay tuned for further updates on market movements and the Fed’s upcoming decision.

The Upcoming IPOs in this week and coming weeks are Hamps Bio, NACDAC Infrastructure, Transrail Lighting, Rosmerta Digital and Avanse Financial.

The Current active IPO is and Yash Highvoltage, Inventurus Knowledge, Sai Life Sciences, Mobikwik, Vishal Mega Mart, Supreme Facility, Purple United, Jungle Camps and Toss The Coin.