The Nasdaq 100 index has closed Tuesday in its first record since February, driven by robust foundations and the reduction of geopolitical uncertainties, factors that increase the appeal of the index, strongly concentrated in growth companies.
The discharge represents a remarkable twist for the index, which has dropped up to 23% over its latest peak. Companies such as Microchip Technology Inc., Micron Technology Inc. and Palantir Technologies Inc. have risen at least 80% since the minimum recorded on April 8.
The Nasdaq 100 advanced 1.5% on Tuesday, closing at 22,190.52 points, after a ceasefire agreement between Iran and Israel was seen as a factor in reduced political risk, which boosted a widespread high scholarships.
Since a minimum of April 8, the index accumulates up 30%, surpassing the performance of S&P 500. The largest companies in the market pulled the index up, offering more modest gains among the lowest market companies. A version of Nasdaq 100 with equal weights has risen 26% since April, while an index of medium capitalization shares advanced 20% and the Russell 2000, 23%.
In addition to the apparent truce in the stresses in the Middle East, the current rise is also due to tariff breaks and exemptions, but was mainly supported by the results of technology giants, which reassured investors regarding the industry’s foundations and prospects of growth, even in the face of a volatile macroeconomic scenario.
For Dan Eye, director of investment at Fort Pitt Capital Group, the solid foundations of the Big Techs, allied to trends such as artificial intelligence, give the group features of Porto Seguro. “Large long -term structural engines are enough to overcome any macro or geopolitical issue,” he said. “Even at the height of the fall in April, we believed technology would lead recovery. Although the evaluations are no longer from early April, until we return to liberation day tariffs, the sector should continue to go well.”
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Continuous optimism about artificial intelligence has been another key factor. Microsoft Corp. has been beating successive records driven by the enthusiasm with IA, while Broadcom Inc. and Oracle Corp. They also benefited from this movement. NVIDIA CORP. released an exceptional report last month.
Bloomberg Magnificent 7 Total Return Index rose 0.8% on Tuesday. Although it has advanced 34% since its minimum in April, it is still 6% below the peak of December.
“Although the strength of recovery was a little surprising, it certainly is not surprising that the sector has been able to recover,” wrote Brian Belski, BMO Capital Markets’ chief investment strategist, in a statement published on June 18. “We continue to expect the sector to exceed the market in the next 12 to 18 months.”
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Although commercial policy is still unknown, most agree that the risk has decreased. A Federal Court of Appeals ruled on June 10 that US President Donald Trump could continue to impose his rates for now, after the US International Court of Commerce has ruled in May that he had improperly used an emergency law to implement them. Repeated postponements and exemptions gave rise to the so -called “Taco Trade” – acronym for “Trump Always Chickens Out” (Trump always gives up).
The force was not total throughout the market. Apple Inc. accumulates a 20% drop in the year, still facing geopolitical uncertainties and being seen as delayed in the AI race.
Tesla Inc. has also shown volatility, especially after a public confrontation between CEO Elon Musk and Trump, which resulted in several relegations due to concerns about the company’s perspectives.
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“There was relief, or at least hope, on the tariff front, while the CPI was a benign number, suggesting that the economy is doing well, so people are going back to the running trade, which are the magnificent seven, or at least most of them,” said Michael Mullaney, director of Boston Partners global markets.
He added: “Although the actions have kept very well so far, I believe there is complacency on the part of investors,” noting that the World Bank recently reduced its expected global growth for this year.
“We still have a long way to find out the true impact of tariffs, so there are still risks ahead.”
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