AI-Driven Rally Pushes Tech Stocks To Records, Broadcom Enters Trillion-Dollar Club, Inflation Data Flashes Warning Signal: This Week In The Markets

The tech-heavy Nasdaq 100 index – as tracked by the Invesco QQQ Trust (NASDAQ:QQQ) – extended its relentless climb this week, setting new record highs and nearing the 22,000-point milestone, fueled by strong investor optimism in the Magnificent Seven tech giants and the transformative potential of artificial intelligence.

Year-to-date, the index has posted a robust 30% gain, on track to outperform the S&P 500 for the ninth time in the last decade.

Since the start of 2023, the Nasdaq 100 is on track to double, nearing a 100% gain – a performance last achieved in 2019-2020 with a 102% rise and previously hit during the dot-com boom of 1998-1999.

Notably, five out of the seven Magnificent Seven stocks— Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), Meta Platforms Inc. (NASDAQ:META), and Tesla Inc. (NASDAQ:TSLA) — achieved fresh record highs this week. The combined market capitalization of the group exceeded $18 trillion, surpassing China's gross domestic product at the end of 2023.

Broadcom Inc. (NASDAQ:AVGO) emerged as the week's standout performer, soaring after a strong quarterly earnings beat and delivering upbeat AI-driven guidance for the coming year. The rally propelled the chipmaker into the exclusive $1 trillion market-cap club, making it the eighth-largest publicly traded company.

Inflation data released during the week raised some red flags. Consumer inflation rose 2.7% year-over-year in November, in line with expectations, but producer inflation jumped to 3% year-over-year, exceeding estimates of 2.6%. This marked the sharpest increase since February 2023, raising concerns about potential cost pass-throughs to consumers.

Investors are fully pricing in a 25-basis-point interest rate cut at the Federal Reserve’s Dec. 18 meeting. Yet policymakers may signal fewer rate cuts for 2025 — potentially just three — while leaving open the possibility of a pause as early as January.

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