The long-awaited step of the US monetary authorities was made yesterday – the Federal Reserve lowered the key rate by 50 basis points at once, for the first time since 2020. Such measures traditionally increase investor interest in the stock market, which is why shares of tech giants began to rise in price yesterday. The Nasdaq index ultimately rose by 2.5%, demonstrating the fourth largest increase since the beginning of this year.
As CNBC notes, Tesla shares rose 7.4%, while Nvidia shares added 4% to $117.87. In the context of a decrease in the key rate, loans in the corporate market become more accessible, and bond yields decrease, making investments in securities more attractive, albeit while maintaining the usual level of risk. In addition, the plan disclosed by the US monetary authorities for an additional rate cut before the end of this year only gave confidence to those investors who rushed to the stock market.
The Nasdaq index, which, against the backdrop of the current AI boom, could not complain about the lack of positive dynamics, at the end of the trading session rose to its highest level since mid-July. Nvidia shares at current levels are still a long way from their June highs, but they are up 138% year-to-date and have more than tripled in value since last year.
Shares of rival AMD rose 5.7%, while Broadcom shares added 3.9%. AMD’s attempts to compete with Nvidia in the development of artificial intelligence accelerators have not yet given particularly convincing dynamics to its shares; since the beginning of the year, they have risen in price by only 6%. The head of the company, Lisa Su, reassured investors with statements that it is a long game in the AI segment, and the market is still in its early stages of development. She urged CNBC audiences to be patient and reminded that the hit ChatGPT has been on the market for about 18 months. However, she does not deny that artificial intelligence will penetrate all areas of our lives, including education and the creation of medicines.
Interestingly, among the largest companies in the technology sector, Tesla rose the most yesterday, by 7.5% to $243.92. This year has not been very successful for the automaker in terms of stock market dynamics; since the beginning of the year, Tesla shares have fallen in price by almost 2%. However, they still strengthened by 72% from their lows in April. Shares of Apple and Meta✴ Platforms rose in price yesterday by almost 4% each.