The Nasdaq high-tech index showed the best dynamics since 2001 in January

At the end of January, the Nasdaq Composite stock index, which consists of shares of high-tech companies, rose by 11%, which became the best dynamics for this period since 2001. Then, at the height of the high-tech boom of the late 1990s and early 2000s, the Nasdaq rose 12.2% in January.

Analysts cite several factors as the reason for such positive dynamics – slowing inflation, forecasts of a smaller-than-expected recession in the United States, as well as expectations that the Fed will begin to reduce the pace of raising interest rates – and this will be another sign of economic recovery. “Expectations for the Fed rates have become one of the main drivers of positive dynamics in the market,” MarketWatch quotes Melissa Brown, managing director of the analytical company Qontigo. “If the Fed makes it clear that they are not going to do this, it will be a strong negative factor for the market. But if the Fed confirms the market’s expectations, it is unlikely that this will have a strong impact on the dynamics, since such expectations have already been won back.

Fed rate expectations also fueled the positive performance of the S&P 500 index, which consists of shares of 500 public companies with the largest capitalization, in January this index showed the best dynamics since 2019.

Evgeniy Khvostik