NASDAQ, S&P 500, Dow Jones Analysis – NASDAQ Rallies As Meta Gains 28%

Key Insights

• Tech stocks rallied as traders focused on the outstanding performance of Meta stock. 
• S&P 500 and NASDAQ tested new highs and settled at levels that were last seen back in the summer of 2022.
• Dow Jones underperformed as healthcare stocks found themselves under significant pressure.

S&P 500

S&P 500 tested new highs as Meta rallied 28% after the release of the earnings report. The company missed analyst estimates on earnings and beat them on revenue. Traders focused on the $40 billion buyback announced by Meta.

Today, traders also had a chance to take a look at the Initial Jobless Claims and Factory Orders reports.

Initial Jobless Claims report indicated that 183,000 Americans filed for unemployment benefits in a week, compared with the analyst consensus of 200,000. The report indicated that job market remained in a decent shape.

Factory Orders increased by 1.8% month-over-month in December, while analysts expected that they would grow by 2.2%.

NASDAQ

NASDAQ rallied as traders focused on the strong performance of Meta stock. The index is up by 20% from December lows, so one could argue that NASDAQ is about to enter a bull market.

Tesla, Amazon, and Alphabet are up by roughly 7% in today’s trading session as traders rush to buy mega cap stocks. The market sentiment is extremely bullish, and demand for tech stocks is strong. From the technical point of view, RSI is in the overbought territory, so the risks of a pullback are increasing.

Dow Jones

Dow Jones is the laggard among major indices today. Dow Jones’ performance is negatively impacted by the sell-off in healthcare stocks like UnitedHealth Group and Merck.

UnitedHealth Group is under strong pressure as Medicare Advantage proposed lower-than-expected rates for 2024. Merck stock declined after the release of the earnings report as the company expects that its COVID-related sales will drop in 2023.

For a look at all of today’s economic events, check out our economic calendar.