Nasdaq Surges 1% as U.S. Construction Spending Soars in February

BOOM! The Nasdaq Composite index surged around 1% on Monday, February 11, 2025, as investor sentiment improved and fears abated. The rally was driven by strong performances from tech stocks, particularly nvidia Corp. (NVDA) and Broadcom Inc. (AVGO), which gained 2.9% and 4.5%, respectively, during the session. This positive market sentiment was reflected in the CNN Money Fear & Greed Index moving to the "Neutral" zone with a reading of 46.2, up from the previous reading of 38.8, which was in the "Fear" zone.



WHY IS THIS HAPPENING? The surge in Nvidia and Broadcom stocks can be attributed to several specific factors:

1. STRONG EARNINGS AND GUIDANCE: Both companies reported strong earnings and provided positive guidance for the future. For instance, Broadcom reported roughly in-line results for its fiscal fourth quarter, with strong sales of AI processors and networking chips, and its outlook matched analyst estimates.

2. AI AND SEMICONDUCTOR DEMAND: The increasing demand for AI and semiconductor products, driven by various industries such as data centers, gaming, and automotive, has positively impacted the stocks of these companies. Nvidia, in particular, has seen a surge in demand for its AI processors and graphics cards.

3. ANALYST OPTIMISM: Analysts have maintained a strong bullish stance on Nvidia, with an average target price suggesting about 30% upside. Evercore ISI analysts added Nvidia to their "tactical outperform" list ahead of its earnings report, setting a price target of $190, more than 40% above the intraday price on Monday.

4. PARTNERSHIPS AND COLLABORATIONS: Nvidia's partnerships with companies like TSMC, which reported a jump in sales, have also contributed to the stock's surge. Additionally, Nvidia's collaborations with various industries, such as automotive and robotics, have expanded its market reach.

BUT WAIT, THERE'S MORE! The sustainability of these gains in the long term depends on several factors, including sustained demand for AI and semiconductor products, continued innovation and product development, market conditions, and the regulatory environment.

CONSTRUCTION SPENDING SOARS IN FEBRUARY! U.S. construction spending increased more than expected in February as a decline in mortgage rates boosted single-family homebuilding, though rising economic uncertainty because of tariffs on imports could slow momentum. The Commerce Department's Census Bureau said on Tuesday that construction spending jumped 0.7% after a downwardly revised 0.5% decrease in January. Economists polled by Reuters had forecast construction spending rebounding 0.3% after a previously reported 0.2% decline in January.

WHAT DOES THIS MEAN FOR YOU? Construction spending advanced 2.9% year-on-year in February. Spending on private construction projects rose 0.9%. Investment in residential construction shot up 1.3%, with outlays on new single-family projects rebounding 1.0%. Mortgage rates have eased from lofty levels at the start of the year. Nonetheless, tariffs on imported goods remain a constraint for builders. President Donald Trump has ordered a new trade investigation that could heap more duties on imported lumber, adding to existing taxes on Canadian softwood lumber, used in construction, furniture, and paper production. Trump has raised tariffs on Chinese goods to 20% and slapped duties on steel and aluminum. According to the National Association of Homebuilders, "builders estimate a typical cost effect from recent tariff actions at $9,200 per home."

DON'T MISS OUT ON THESE STOCKS! The Nasdaq's 1% gain on Monday, February 11, 2025, reflects an improvement in overall market sentiment, driven by strong performances from tech stocks, particularly Nvidia and Broadcom. The Fear & Greed Index's movement to the "Neutral" zone indicates that investors' fear is decreasing, and greed is increasing, leading to a more positive market sentiment. The sustainability of these gains in the long term depends on several factors, including sustained demand for AI and semiconductor products, continued innovation and product development, market conditions, and the regulatory environment.

STAY TUNED FOR MORE! The 1% gain in the Nasdaq index reflects an improvement in overall market sentiment, as indicated by the CNN Money Fear & Greed Index moving to the "Neutral" zone. This positive sentiment was likely influenced by investors setting aside tariff threats by President Donald Trump and positive earnings results from some companies. The tech sector, in particular, contributed significantly to the Nasdaq's performance, with shares of chipmakers gaining on Monday. Additionally, energy, information technology, and utilities stocks recorded gains on Monday, further contributing to the overall market sentiment.

INVEST NOW! Investor sentiment played a significant role in the market's improvement, as reflected by the movement of the CNN Money Fear & Greed Index. The index's shift to the "Neutral" zone on February 11, 2025, indicated that investors' fear was abating, and greed was increasing, leading to a more positive market sentiment. This change in the index was likely influenced by the market's positive performance, with U.S. stocks settling higher on Friday, February 8, 2025, and major indices recording weekly gains.

BOO-YAH! The Nasdaq's 1% gain on Monday, February 11, 2025, reflects an improvement in overall market sentiment, driven by strong performances from tech stocks, particularly Nvidia and Broadcom. The Fear & Greed Index's movement to the "Neutral" zone indicates that investors' fear is decreasing, and greed is increasing, leading to a more positive market sentiment. The sustainability of these gains in the long term depends on several factors, including sustained demand for AI and semiconductor products, continued innovation and product development, market conditions, and the regulatory environment.

Ask Aime: Why are Nvidia and Broadcom stocks surging?