The Nasdaq Composite recorded both an intraday all-time high and a new closing record on Wednesday, marking the first peak since October as investors rotated back into technology equities.
The headline index advanced 1.6% to breach 24,020 points intraday, topping its prior intraday peak of 24,019.99 set on October 29 - the same day Nvidia, an AI bellwether, first crossed a $5 trillion market valuation. The index also closed above its earlier record.
Tech shares endured steep losses earlier in the year amid concerns about rich valuations and uncertainty over how artificial intelligence would reshape the industry. Market participants were also wary that heavy spending by large technology companies might not translate into commensurate returns. The arrival of AI tools from Anthropic in early February heightened fears that traditional software businesses could face disruption, compounding the sector's headwinds.
In late March, the Nasdaq confirmed it had entered a correction - defined as a 10% drop from its prior peak - after the outbreak of conflict in the Middle East. The ensuing surge in oil prices amplified inflation worries and clouded the outlook for monetary policy, knocking investor sentiment.
Since then, developments that included a ceasefire between the U.S. and Iran and initiatives aimed at ending the conflict have helped restore risk appetite. That shift drew investors back into the heavy-weight tech and AI-related names that were significant drivers of U.S. equity record highs in the prior year.
Chipmakers have been among the strongest performers so far this year, ranking as some of the largest percentage gainers on the S&P 500. Within the group of largest tech companies often dubbed the Magnificent Seven, Amazon.com outpaced its peers as investors displayed growing confidence in its AI expansion efforts.
The renewed appetite for technology shares coincides with the market's approach to another quarterly earnings season. S&P 500 information technology earnings are now forecast to grow 46.2%, up from the 35.8% growth projection recorded at the start of the year. According to LSEG I/B/E/S data through April 10, that rate would represent the largest profit increase of any sector.
Looking ahead, the market's momentum reflects a recalibration of risk tolerance after a period of geopolitical and AI-related anxiety. The mix of stronger tech earnings expectations and the recent easing of geopolitical tensions has encouraged investors to re-embrace sectors that led last year’s market advances.