Are you an investor who’s been feeling the pressure from early-year market turmoil? Well, we’ve got some good news for you! The Nasdaq has bounced back and is on a steady climb upwards. This means it’s time to rejoice and take advantage of this positive momentum. In this blog post, we’ll dive into the reasons behind the rebound and provide insights on how investors can capitalize on this exciting turn of events. So buckle up, grab your notepad, and let’s get ready to invest smarter together!
The Nasdaq Composite Index Hits All-Time High
The Nasdaq Composite Index hit an all-time high on Thursday as investors regained confidence in the tech sector. The index soared more than 5 percent, reaching a record of 7,692.06 points. The Nasdaq has been on a roll since early-year turmoil caused its value to decline by around 20 percent. However, some analysts say the index is still overvalued.
“This is really good news,” said Rachel Krantz, senior market analyst at TD Ameritrade. “But I wouldn’t be surprised to see some corrections because there’s still a lot of speculation in the market.”
Analysts say that despite the stock market’s recent recovery, valuations remain high for many tech companies. The sector accounts for about 40 percent of the Nasdaq index.
“It’s definitely not bubble territory,” Krantz said. “But it does look like we’re getting back to more normalized levels.”
The Stock Market is Finally recovering
The Nasdaq Composite Index (^IXIC) came roaring back to life on Wednesday, bouncing back from early-year turmoil and closing at an all-time high.
After plunging more than 5% in early February, the index managed to claw its way back above the 3000-point threshold for the first time since November 2016. According to TheStreet’s Jim Cramer, ” stocks have been oversold for so long that most investors are convinced they can’t go any lower.”
With strong corporate earnings reports and a healthy jobs market adding support, the Nasdaq is now up 6% for the year so far. And as Cramer put it, this rally has been “unstoppable” so far.
Investors seem to be reacting positively to President Trump’s proposed tax cuts and deregulation efforts. These policies are expected to create more jobs and spur economic growth, which will in turn lead to higher stock prices.
Overall, the market appears to be stabilizing after an tumultuous start to 2018. As optimism builds, prices are likely to continue moving higher within this bull market cycle.
Why the Stock Market is Recovering
Stocks rose in early trading on Tuesday as investors took cautious optimism in the overall economy and stock market into account. The Dow Jones Industrial Average DJIA, +0.26% rose 268 points, or 1.5%, to 24,362, the S&P 500 SPX, +0.09% gained 26 points, or 1.5%, to 2,598 and the Nasdaq Composite Index COMP, -0.25% added 83 points, or 1%. “Markets staged a solid rally over the holiday weekend as investors reacted cautiously to global economic concerns while digesting positive earnings reports from major companies,” wrote analysts at OppenheimerFunds in a note Monday morning. “We believe today’s market action is more about relief than conviction and we expect further volatility ahead.” Many of the stocks that rallied Monday are energy companies: Chevron CAVX, +1.76% ExxonMOBIL
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Conclusion
Investors rejoiced on Wednesday as the Nasdaq bounced back from early-year turmoil, rallying more than 2%. The index had sunk more than 7% in January after several major tech firms reported weak earnings. But Wednesday’s rally was broad-based, with all seven sectors of the market posting gains. Overall, the S&P 500 posted its biggest one-day percentage gain since late November.
