On Thursday, tech stocks played a pivotal role in driving the stock market averages upward, indicating that investors are now monitoring developments lents related to interest rates. The DOW saw a marginal increase of 0.2% in contrast to the S&P 500 seeing a gain of 0.8%. Out of all the major indexes, the NASDAQ posted the largest gain of 1.4%. Investors are paying attention to labor market data due to the insights it provides on the Fed's monetary decisions. Positive signs from the labor market data suggest the Fed's efforts against inflation through interest rate hikes are achieving their intended goals.
Furthermore, the mentioning of a 'soft landing for the economy' suggests that investors indicate that the Fed could be successful in managing the economy that will be able to prevent sharp economic downturn while simultaneously combatting inflation. This has provokes some traders to bet on the possibility of the Fed shifting its current policy by cutting interest rates. It appears that the positive developments in the labor market are influencing investor sentiment, which has the possibility of leading to changes in the Fed regarding interest rates. This article reflects the energetic nature of financial markets and how they feed off economic data and action from the central bank.
Source: https://finance.yahoo.com/news/stock-market-news-today-nasdaq-leads-market-rally-ahead-of-crucial-jobs-data-210111253.html
What is the specific relationship between tech stocks and feds monetary decisions if there is one? Or is technology driving the market up for a separate reason along with the change in interest rates?
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