Stocks Turn Euphoric

Gold was held down though strong, but U.S. stocks had a surprise surge at the end of last week. The S&P and NASDAQ broke all-time-highs due to semiconductor stocks and demand for AI.

-NASDAQ dramatically breaking all-time-high

TSM (semiconductor) shares launched an astounding 10%. They predicted a revenue growth of over 20% for 2024. The main reason for this is the soaring demand for high-end chips used in artificial intelligence applications. Nvidia reached a record high again, rising 1.9% and dominating Wall Street trading with nearly $28 billion worth of shares exchanged. Competitor Advanced Micro Devices also climbed 1.6%, achieving a new record peak.

Other companies in the semiconductor industry, such as Broadcom, Qualcomm, and Marvell Technology, experienced 3%+ gains, each. The Philadelphia SE semiconductor index rallied 3.4%, nearing its December 2023 record high. It appears that the AI narrative was not exhausted after all.

Apple was upgraded by BofA Global Research, elevating the tech giant's stock rating from "neutral" to "buy." This gave them a 3.3% boost. This also contributed to a 2% rise and record high in the S&P 500 information technology index.

Recently, there has been an impressive decrease in American unemployment claims. They are currently at their lowest level in over one year. This could mean that there will be growth this month and that the job market is more stable than expected.

The only major issue counteracting the AI narrative is that markets have started to give up on early rate-cuts. The Fed is consistently talking tough about standing their ground and this has soured sentiment. Can the AI news keep markets flying, or will central banks hold out until markets crash and big players can scoop up cheap shares and assets?

That gold is holding strong amongst this “euphoria” speaks volumes and can’t be ignored. Again the key word here is ‘balance’, particularly amid such divergent narratives.