NASDAQ Index, SP500, Dow Jones Forecasts – Can Microsoft’s AI Investment Lift All Indices?

Can Nvidia and Microsoft Keep Driving the Nasdaq Higher?

The Nasdaq Composite led Friday’s rebound, closing up 1.77% at 19,621.68, gaining 340.88 points. Despite this rise, the index finished the week down 0.51%, snapping a five-day losing streak but failing to offset earlier losses. Tech stocks, particularly semiconductor and AI-related firms, fueled the rally. Nvidia jumped 4.7%, and Super Micro Computer surged 10.9%, driven by optimism surrounding AI infrastructure spending.

Microsoft also played a pivotal role, announcing plans to invest $80 billion in AI data centers by fiscal 2025. This bolstered sentiment around tech and energy companies linked to AI. Constellation Energy and Vistra gained 4% and 8.5%, respectively, highlighting investor enthusiasm for AI’s growth potential.

Despite the bounce, the Nasdaq’s performance signals broader market hesitation as the rally was not strong enough to avoid a weekly loss. Investors remain cautious as corporate earnings guidance suggests potential headwinds for tech and discretionary sectors in Q4.

Will the S&P 500 Break Out or Stall Below Key Levels?

The S&P 500 added 73.92 points on Friday, ending at 5,942.47, marking a 1.26% gain. However, the benchmark index declined by 0.48% over the week. Friday’s session saw broad participation across sectors, though tech and industrial stocks were the standout performers.

A significant driver was the rebound in large-cap growth stocks that had previously faced pressure. The rally was also supported by defensive names such as energy and utilities. Despite the positive finish, FactSet data indicated that 67% of S&P 500 companies providing Q4 earnings guidance have issued negative projections. This trend exceeds the five- and ten-year averages, reflecting growing concerns about earnings sustainability.

The S&P 500’s failure to achieve a “Santa Claus” rally further underscores cautious market sentiment. Investors are closely monitoring whether Friday’s gains represent a sustainable turnaround or a temporary pause in selling.

Is the Dow Jones Primed for a Larger Rebound?

The Dow Jones Industrial Average rose 339.86 points, or 0.8%, closing at 42,732.13. Still, the index declined 0.60% over the week. Gains were led by financials and industrials, with companies like Caterpillar (+1.12%) and Goldman Sachs (+0.9%) posting strong performances.

U.S. Steel’s shares fell 6.5% following President Biden’s announcement to block the proposed Nippon Steel acquisition. This reflected broader volatility in individual stocks driven by political developments.

Despite Friday’s upward move, the Dow’s trajectory highlights investor wariness. The index remains below key technical levels, with resistance near 43,200. The 50-period moving average hovers at 43,727.93, indicating a potential barrier for further gains.

More Information in our Economic Calendar.