Nasdaq hits new record high as tech stock demand returns

The NASDAQ INC reached a new intraday all-time high and a record closing level on Wednesday, marking its first such milestone since October. This surge reflects a renewed investor appetite for technology stocks following weeks of volatility driven by geopolitical tensions and concerns regarding the economic impact of artificial intelligence. The Nasdaq Composite climbed 1.6% to surpass 24,020 points, moving past its previous peak of 24,019.99 established on October 29. That date was particularly significant as NVIDIA CORP reached a market valuation of $5 trillion for the first time. The index has now recovered from a difficult start to the year, where high valuations and fears over the long-term returns on massive AI investments weighed heavily on the sector. Market sentiment was further pressured earlier this year by the introduction of new AI tools from competitors like Anthropic, which stoked fears of disruption for established software firms. Additionally, the index entered a correction phase in late March—defined as a 10% drop from recent peaks—as conflict in the Middle East drove up the prices of West Texas Oil and Brent Crude Oil. These rising energy costs fueled inflation concerns and complicated the outlook for monetary policy. However, a diplomatic shift has since bolstered market confidence. A ceasefire agreement involving the United States and Iran has eased geopolitical risks, encouraging investors to return to the large-cap technology and AI-focused companies that spearheaded the market's gains last year. Within the tech sector, chipmakers have continued to lead the market, ranking among the top performers on the S&P 500. Among the so-called "Magnificent Seven," AMAZON.COM INC stood out by outperforming its peers, as investors expressed growing optimism regarding the company's strategic expansion into artificial intelligence. This renewed interest in technology comes as the market prepares for the quarterly earnings season. Analysts expect information technology earnings within the S&P 500 to grow by 46.2%, a significant upward revision from the 35.8% growth projected at the start of the year. According to data from LSEG I/B/E/S, this would represent the strongest profit growth of any sector in the current reporting period.