Apple leading Nasdaq’s surge

Tech companies, particularly Apple, have significantly boosted the US stock market; leading the Nasdaq Composite and reversing most of its early 2024 losses. The tech-heavy Nasdaq jumped 0.6%, while the S&P 500 climbed 0.1%.

Apple shares increased by over 2% after Bank of America upgraded the stock to buy, calling for more than 20% upside over the next 12 months. The Technology Select Sector SPDR Fund also soared 1.2%, reaching an all-time high.

Taiwan Semiconductor Manufacturing Co added over 7% after posting an earnings and revenue beat for the fourth quarter, pushing the VanEck Semiconductor ETF (SMH) up nearly 2% to reach an all-time high.

Tech shares have been boosted by the TSMC update, which had a lot of positivity on forward guidance for semiconductors and AI. As the macro environment evolves this year, if there’s still tailwind for AI, it’s going to show up in the stocks most levered to AI.

The 10-year Treasury yield moved above 4.15% on Thursday as fresh jobs data indicated ongoing tightness in the labour market. Investors are concerned that a buoyant labor market coupled with robust consumer spending may mean fewer rate cuts from the Fed than many are expecting. Currently, markets are pricing in a roughly 56% chance of a quarter percentage point rate cut in March.

Cleveland Fed President Raphael Bostic expects the central bank to start reducing rates in the third quarter, but this puts the Fed on a slower cutting pace than the market is anticipating. Richemont shares saw a 10% jump in US-traded shares after posting better-than-expected quarterly results, with 8% year-over-year sales growth.

Health insurance company Humana’s shares fell 12.1% to a 52-week low, with a medical loss ratio of 91.4%, missing estimates by nearly 150 basis points. This underperformance also impacted several healthcare stocks.