On Monday, the Nasdaq index reached a record close, driven by the successes of AMD and other major players in the artificial intelligence sector. Furthermore, improved market sentiment, linked to falling oil prices and lower yields on long-term US Treasury bonds, also had a positive impact.
Semiconductor company stocks showed significant growth: Intel and ARM Holdings rose by more than 12%, and the PHLX semiconductor index jumped by 4.3%. AMD closed 10% higher, achieving a market capitalization of $1 trillion for the first time.
CNBC reported that this major milestone was reached after a five-day upward trend, which increased the stock price by approximately a quarter. Meanwhile, CEO Lisa Su previously assured investors that AMD forecasts doubling data center sales by 2027. Nevertheless, the company still lags significantly behind Nvidia, whose fluctuations are now affecting entire indices.
Investors note signs of continued expansion in AI spending, despite warnings from leaders of major AI companies who triggered a global tech sell-off last week.
Interest Rate Hikes
The composite Nasdaq index rose by 2.26% and set a record close for the first time since June 2nd, while the S&P 500 increased by 1.49%, remaining close to its record, and the Dow Jones Industrial Average finished up 0.71%. The MSCI All-World Index rose by 1.31%, and European stocks grew by 1.02%.
Risk appetite remains strong, even with growing expectations of further rate hikes and debates over whether AI sector trading is outpacing itself.
Sima Shah, Chief Global Strategist at Principal Asset Management, noted: "Although synchronized rate hikes raise concerns about risk assets, stocks remain near record levels, supported by strong earnings growth."
She added that it is "important that central banks are raising rates to fight inflation, not to slow down economic activity, suggesting a gradual and limited tightening. While higher rates may hinder further multiple expansion, they are unlikely to put significant pressure on earnings or derail the overall bull market."
Central banks in most major economies are expected to raise rates again this year. Cautious forecasts from the US Federal Reserve last week led futures trading to price in a 55% probability of another hike in October, and a 91% probability of a hike by the end of the year.