Wall Street records year’s best week as tech stocks drive gains

Global financial markets were supported by an unexpected interest rate cut by Switzerland's central bank

The trading floor of the New York Stock Exchange is busy as Reddit prepares for its IPO and techs perform well. Getty Images
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Wall Street gave up some gains on Friday but still recorded its best week so far this year, with tech stocks driving significant gains across the major indices.

The S&P 500 fell 0.1 per cent from a record high to close at 5,234.18. The Dow Jones Industrial Average dropped 0.8 per cent to 39,475.90, while the Nasdaq Composite rose 0.2 per cent to 16,428.82 to add to its record.

Chipmaker Nvidia's shares settled 3.12 per cent higher at $942.89 per share. Alphabet Inc’s class 'C' shares closed 2.04 per cent up at $151.77.

Micron Technology’s shares surged 14 per cent on Thursday and ended the week slightly higher after the company’s second-quarter profit beat market expectations amid a surge in artificial intelligence adoption.

Apple’s shares ended Friday’s session 0.53 per cent higher after experiencing a decline earlier in the week because of a lawsuit filed by the US Department of Justice accusing the company of monopolising the smartphone market.

In the lawsuit, filed on Thursday in the District of New Jersey, the Justice Department said Apple had used its market power to extract more money from consumers, publishers, and others.

Electric carmaker Tesla’s stock fell 1.15 per cent to $170.83 on the week's last day of trading. The company’s shares have has lost about a third of their value this year on slowing electric vehicle demand growth.

After gaining 48 per cent on its first day of trading in New York on Thursday, Reddit's stock settled 8.8 per cent lower at $46 a share.

Meanwhile, global financial markets were supported by an unexpected interest rate cut by Switzerland's central bank on Thursday.

The move signalled that major central banks might take independent action on interest rates, rather than waiting for cues from the US Federal Reserve.

“Now, if the Swiss could kick off the pivot party, it is because inflation in Switzerland has been easier to fight for the [Swiss National Bank] thanks to the traditionally strong franc,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“But the fact the Swiss jumped into the water raised the expectation that the others will join ‘soon’,” she added.

Goldman Sachs Research expects the Fed – as well as the European Central Bank, the Bank of England, and the Bank of Canada – to begin cutting rates in June.

Earlier in the week, the Fed left its target rate unchanged at 5.25 to 5.50 per cent, but said it expected to cut rates three times this year.

“The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 per cent,” Fed chairman Jerome Powell said.

The US economy is still poised for a soft landing – meaning a return to 2 per cent inflation without a recession, Goldman Sachs said.

“Recent growth and employment numbers have reinforced our economists' view that the supply-demand imbalances in the economy are abating,” the investment bank added.

Updated: March 23, 2024, 8:58 AM