The Nasdaq surged 2.5% on Thursday, marking one of its strongest performances in 2024, following a key Federal Reserve rate cut. Investors flocked to tech stocks, with Tesla and Nvidia leading the way. Tesla’s shares jumped 7.4%, while Nvidia rose 4%, fueling the rally that saw the Nasdaq reach 18,013.98 — its highest point since mid-July. The rally was driven by the Federal Reserve’s decision to lower its benchmark interest rate by half a percentage point, the first reduction since 2020, signaling additional cuts by the end of the year.
Nvidia’s gains are tied to its dominant position in the artificial intelligence space, with its processors powering AI applications like OpenAI’s ChatGPT. The company’s stock is up about 138% in 2024, though still 13% below its all-time high. Lower borrowing costs are expected to provide further support for Nvidia, along with other chipmakers. Advanced Micro Devices (AMD) and Broadcom followed Nvidia’s lead, with AMD up 5.7% and Broadcom up 3.9%.
Tesla, which has lagged behind other tech giants this year, posted a significant 7.4% gain. The electric carmaker has faced challenges in 2024, but its stock has rebounded by 72% since April. Meanwhile, other tech giants like Apple and Meta also benefited from the rally, with both companies seeing their shares rise nearly 4%.
The broader sentiment on Wall Street is that tech stocks benefit from lower interest rates, which reduce borrowing costs and make high-growth investments more attractive. As the market adjusts to the Fed’s latest move, the tech sector, especially companies heavily involved in AI, is expected to continue drawing investor interest.
