Tech stocks lift US markets higher; Fed maintains hawkish outlook

The US stock markets held the gains on Wednesday as investors reconsidered the impact of AI on tech stocks. The Dow Jones closed 0.2% or 129 points higher at 49,662, the S&P500 at 6,881 up 38 points, and the NASDAQ at 22,595 up 175 points.

The gains were led by tech stocks like Nvidia and Meta, which jumped over 2% in the previous after-market trading hours, after they signed a multi-year strategic partnership. The Nvidia shares closed 1.63% higher on Wednesday. NVIDIA will release its Q4 earnings next week, and investors will be looking out for the revenue guidance after the company signed multiple agreements with AI companies like OpenAI, Anthropic, Meta and others.

Shares of Micron jumped over 5% after David Tepper’s Apaloosa Management increased its stake in the company by 200%. Among the megacap names, shares of Amazon snapped the losing streak and closed over 2% higher after Bill Ackman’s Pershing Square raised its stake in the company by 65%, making Amazon its third-largest holding in the portfolio.

On the geopolitical front, things have changed drastically as media reports claimed the military buildup in the Middle East increased in 24 hours, prompting an attack on Iran by the US. Following the development, the crude oil prices edged higher, along with safe-haven assets. The Gold prices surged back to $5000 levels.

FOMC minutes

Federal Reserve officials looked divided on the interest rate trajectory as US inflation cools down to target of 2%. The FOMC minutes showed a divergent views on the interest rates, some said the interest rates to be reduced if the inflation remains on the expected lines, while others suggested to even hike the interest rates to keep the inflation at a higher side. On the other hand, particpants showed reduced risks for unemployment and expect the inflation risks to persist further.