Introduction: Hearings on the Nasdaq 100 in 2024 – Rise and Shine of Volatility and Opportunity
As investors approach the fourth years of the economic cycle, the Nasdaq 100 continues to attract attention. This technology-intensive index has seen significant pin and amplified gains and declines with a couple of factors in the mix. From inflation scares to large cap stock sets such as Nvidia, the Nasdaq 100 and it’s pattern still complex and dynamic. It is therefore important for investors who want to know about the health of the business concerning the tech sector to keep abreast with these developments.
Let’s deepen ourselves into the Nasdaq 100 year to date, factors that led to its up move and down move and gain a view on the direction of the market for the rest part of this year, 2024.
Nvidia and Its Effects on Nasdaq 100
Among the most important constitute of Nasdaq 100 it is possible to recognize Nvidia, a stock that can be considered as a leader of the entire sector. However recent trends show that even such a big chip making company as Nvidia is not spared from larger market forces. That is, as the leading chipmaker that operates in a vulnerable environment suffers from certain challenges, the repercussions are registered not only in terms of short-run variance in Nasdaq 100, but in terms of the long-run growth rates as well.
Inflation risks and the Federal Reserve’s tight monetary policy has been a burden on Nvidia’s stock. The correlation between the company’s performance and the macroeconomic environment conditions is getting stronger, so it can be influenced easily by the investors’ moods. This is particularly apparent due to the current inflationary environment that delta more concerns over other possible future hike by the Fed. Technological stocks therefore generally undergo correction when the possibility of higher interest rates materializes, since rates cause dulling to growth expectations of many multiple stocks.
Inflation and the Fed: A couple of weeks ago we again received a lot of skeptical comments about the future of modern art as well as the contemporary world itself from experts, multiple scientific and business articles, and our colleagues who gave several alternative scenarios or completely different opinions after reading our previous insights.
Even though the Nasdaq 100 had appreciated more than the S&P 500 it is more sensitive to inflation because of its excessive exposure to technology. The effect of inflation on people’s spending power, business revenues, as well as the most crucial of them all, the cost of capital for growth companies. Major focal point is shifting towards the Federal Reserve as its signals about the interest rate may also impact the tech sector in some more negative form.
As noted in other commentaries, persistent inflation fears are driving expectations that the Fed may tighten its policy by hiking rates at least once more this year. But these manoeuvres may be needed to bring inflation under check, while deflationary tendencies could harm growth-oriented stocks that trade at forward-looking P/Es. This expectation of inflation along with general rate hikes has brought high volatility to the tech stocks under Nasdaq 100 as some stocks went down while the market as a whole is still relatively stable.