Nasdaq surpasses 20,000 points, boosted by gains from tech megacaps

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US inflation meets expectations
US inflation accelerated in November, rising to 2.7% year-on-year from 2.6% in October, while core inflation, which excludes food and energy prices, was unchanged at 3.3 %. Both metrics were in line with forecasts. While the inflation rate was higher, most traders still expect the Federal Reserve to reduce its benchmark rate later this month, with the CME FedWatch Tool reporting a probability of 95%.

Nasdaq hits new high
Alphabet and Tesla hit new highs on Wednesday, joining Amazon and Meta in pushing the Nasdaq above 20,000 points for the first time. The four tech giants added approximately $416 billion in market capitalization during the day. The Nasdaq Composite rose 1.77% to close at 20,034.89. The S&P 500 gained 0.82%, but the Dow Jones Industrial Average fell 0.22%.

ETFs surpass $1 trillion in inflows
The exchange-traded fund industry has surpassed $1 trillion in total inflows for the first time, according to a research firm. ETFGI and the Investment Company Institute. The fund that has enjoyed the most demand so far this year is the Vanguard S&P 500 ETF (VOO), which raised approximately $100 billion. US ETFs now have more than $10 trillion in assets. The previous record for US ETF inflows was about $920 billion in 2021.

OPEC cuts demand forecast again
OPEC has cut its global oil demand growth forecast for 2024 for the fifth consecutive month and for its largest amount so far, according to Reuters. OPEC expects global oil demand to rise by 1.61 million barrels per day, down from a previous forecast of 1.82 million bpd last month. It also cut its 2025 growth estimate to 1.45 million bpd from 1.54 million bpd. China accounted for some of the latest downgrade, with Chinese oil demand expected to rise by 430,000 bpd in 2024, up from an increase of 760,000 bpd forecast in July.

(PRO) Alphabet’s quantum leap
The Nasdaq Composite crossed the psychologically important 20,000 mark for the first time on Wednesday, thanks in part to Alphabet’s quantum computing breakthrough. Wall Street analysts predict that stocks may continue to rise.

Technology investors cheered Wednesday as four of seven mega-cap tech stocks closed at all-time highs, with Amazon, Meta, Tesla and Alphabet adding roughly $416 billion in market capitalization during the day.

The gains in technology come as November’s inflation reading met expectations. The reading clears the way for the Federal Reserve to cut rates, which is likely to lift tech stocks.

However, the enthusiasm could be short-lived in light of US President-elect Donald Trump’s plans to raise tariffs, which will likely be inflationary.

The Federal Reserve will have to stop its easing cycle if inflation remains persistent, eliminating one of the key impulses behind the tech rally.

Tesla, whose shares are up about 71% this year, may be the outlier, with most of its gains coming from Trump’s election victory last month.