Alphabet and Tesla Hit Record Highs, Driving Nasdaq Beyond 20,000

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Alphabet and Tesla closed at all-time highs on Wednesday, joining Amazon and Meta in lifting the Nasdaq past the 20,000 mark for the first time. Tech’s seven trillion-dollar companies collectively added approximately $416 billion in market capitalization during the day.

Alphabet’s Quantum Computing Breakthrough

Alphabet’s shares surged 11% over two days following the unveiling of its new quantum computing chip, which the company described as a “breakthrough” in practical applications such as drug discovery and battery design. Alphabet closed at $195.40, surpassing its previous high of $191.18 from July 10.

Tesla’s Post-Election Rally

Tesla reached a closing high of $424.77, climbing past its prior record of $409.97 set in November 2021. The electric vehicle maker’s stock has soared 69% since Donald Trump’s election victory, fueled by Wall Street optimism over CEO Elon Musk’s favorable relationship with the incoming administration.

Broader Tech Performance

Amazon, Apple, and Meta have been consistently hitting new highs, although Apple dipped 0.5% on Wednesday. Microsoft remains 4% below its July peak, and Nvidia is 6% shy of its record from last month. The strong performance of tech megacaps has driven the Nasdaq to a 33% year-to-date gain, with the index closing at 20,034.89 on Wednesday.

Regulatory and Monetary Policy Boosts

The market rally since Trump’s November 4 election win reflects expectations of reduced regulatory pressure on the tech industry and increased dealmaking opportunities. On Tuesday, Trump announced Andrew Ferguson as the incoming chair of the Federal Trade Commission, signaling a pro-innovation and pro-merger stance.

Investor sentiment has also been buoyed by the prospect of a Federal Reserve interest rate cut. The Bureau of Labor Statistics reported a 12-month inflation rate of 2.7% in November, reinforcing expectations of monetary easing. Tom Lee, managing partner at Fundstrat Global Advisors, noted, “When interest rates fall, the megacaps are very sensitive, and today’s increased odds of a December cut are bullish for tech.”

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