Nasdaq soars to 13-month highs

On Thursday, the Nasdaq 100 reached a new high of 13,800, surpassing its April 2022 level.

Strong macroeconomic data and optimism for a resolution to the US national debt ceiling crisis both contributed to growth.

On Thursday, the Nasdaq 100, a high-tech index, surged by almost 2%, surpassing its highest level since last August and reaching its highest point in 13 months.

Bloomberg reported that stocks increased in response to indications that U.S. legislators have made progress in negotiations concerning the debt ceiling and will be able to prevent a default.

President Joe Biden and Speaker of the House Kevin McCarthy expressed optimism following their meeting earlier in the week that a deal would be reached.

In the days ahead, Kevin McCarthy and Senate Majority Leader Chuck Schumer are set to cast their votes on a bipartisan agreement to avert a US default.

Janet Yellen, the Secretary of the Treasury, declared that not raising the debt ceiling would be a "catastrophe" for the financial system, and she emphasized that the matter should be taken care of immediately.

This year, the Nasdaq 100 has regained more than half of the losses it experienced in the previous year. The majority of the index's growth was driven by seven of its largest components - Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla.

The Nasdaq 100's year-to-date growth of 26% would have been reduced to 4.1% without the major stocks of Nvidia and Meta, which have both doubled in value and are up at least 30% this year.

Gene Goldman, CIO of Cetera Financial Group, told Market Watch that the US stock market is "not very healthy." Despite this, investors are still pouring money into tech giants such as Apple, Microsoft and Nvidia, whose growth is overshadowing the lack of strength in other areas.

Year-to-date, the Russell 2000 small-cap index has decreased by 1.4%, and the top 10 S&P 500 stocks have contributed 87% of the index's growth in the first quarter.

Goldman concludes that the US stock market has become overly "concentrated", attributing this to the anticipation of Federal Reserve rate reductions, lower Treasury yields, worries of recession, and a "frenzy" surrounding Artificial Intelligence.