Broadcom’s surge continued while Tesla reached all-time highs on AI optimism. Super Micro Computer slumped after Nasdaq 100 removal and potential capital raise.
Table Content:
- Broadcom Continues its Ascent, Driven by AI Demand
- Tesla Hits All-Time High on AI and Self-Driving Optimism
- Micron Technology Rises Ahead of Earnings, Boosted by CHIPS Act Funding
- Super Micro Computer Slumps After Nasdaq 100 Removal and Potential Capital Raise
- Pharmacy Benefit Managers Under Pressure After Trump’s Comments
- Oil and Gas Stocks Retreat on China Spending Data and Fed Uncertainty
Major U.S. stock indexes saw mixed performance at the start of the trading week, with investors anticipating the Federal Reserve’s interest-rate decision on Wednesday. While a rate cut is widely expected, market participants are keenly focused on Fed Chair Jerome Powell’s commentary and upcoming economic data to assess the economic outlook and future policy actions.
The S&P 500 rose 0.4%, with the communication and technology sectors contributing significantly to a 1.2% gain and a record closing high for the Nasdaq. The Dow Jones Industrial Average, however, experienced a slight decline of 0.3%.
Broadcom Continues its Ascent, Driven by AI Demand
Broadcom (AVGO), fresh off surpassing a $1 trillion market capitalization last Friday, continued its upward trajectory, surging 11.2% to set a new record high and lead the S&P 500. This impressive performance follows the company’s better-than-expected quarterly earnings report last week, which highlighted robust sales driven by artificial intelligence (AI). The momentum was further fueled by Bernstein analysts naming Broadcom a top semiconductor pick alongside industry giant Nvidia (NVDA).
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Tesla Hits All-Time High on AI and Self-Driving Optimism
Tesla (TSLA) shares soared 6.1% to reach an all-time high, boosted by Wedbush analysts’ positive outlook on the potential of AI and full self-driving (FSD) technology under the incoming presidential administration. Wedbush estimates that Tesla’s FSD and AI opportunities could be worth $1 trillion and anticipates a streamlined approval process for these initiatives under the new administration.
Micron Technology Rises Ahead of Earnings, Boosted by CHIPS Act Funding
Micron Technology (MU) stock jumped 5.6% in anticipation of its quarterly earnings release on Wednesday afternoon. Consensus estimates project significant year-over-year growth in sales and profits. The company recently received approximately $6 billion in grants under the federal CHIPS Act to bolster domestic semiconductor production.
Super Micro Computer Slumps After Nasdaq 100 Removal and Potential Capital Raise
Super Micro Computer (SMCI) shares plummeted 8.3%, experiencing the largest decline among S&P 500 components. This drop followed the announcement of Supermicro’s removal from the Nasdaq 100 index and a Bloomberg report suggesting the company is considering a capital raise with the assistance of investment banking firm Evercore (EVR).
Pharmacy Benefit Managers Under Pressure After Trump’s Comments
Shares of companies involved in pharmacy benefit management (PBM) declined after President-elect Donald Trump indicated a potential focus on eliminating the “middle man” to reduce prescription drug costs. A bipartisan bill introduced last week aims to require insurers and PBMs to separate from their pharmacy businesses, contributing to the downward pressure on CVS Health (CVS) and other major health insurers with PBM operations.
Oil and Gas Stocks Retreat on China Spending Data and Fed Uncertainty
Crude oil prices pulled back from recent highs due to weaker-than-expected consumer spending data from China and uncertainty surrounding the Federal Reserve’s interest-rate decision. Phillips 66 (PSX) shares fell 5.2% following the announcement of its 2025 capital plan and a pipeline divestiture, while Marathon Petroleum (MPC) shares also declined.
In conclusion, market movements were largely influenced by anticipation of the Federal Reserve’s upcoming decisions and individual company news. Tech stocks showed strength, driven by optimism surrounding AI and positive earnings expectations. Conversely, concerns about regulatory changes and potential capital raises impacted other sectors. The market’s response to the Fed’s announcement and subsequent economic data will be crucial in shaping market direction in the coming weeks.
