Nasdaq Rises 1% as Nvidia and Broadcom Drive Growth: Investor Sentiment Shifts to Neutral Zone

The overall market sentiment showed improvement this week, with the CNN Money Fear and Greed index transitioning to the "Neutral" zone on Monday. This change indicates a more balanced view among investors, as concerns that previously affected the market begin to ease.

On Monday, U.S. stocks ended the day on a positive note, with the Nasdaq Composite climbing approximately 1%. Investors appeared to overlook tariff threats posed by President Donald Trump, allowing them to focus on the stronger performances of technology stocks, particularly in the semiconductor sector.

Shares of Nvidia Corp. rose by 2.9% during the session, showcasing the increasing confidence in the company's prospects. Similarly, Broadcom Inc. and Micron Technology Inc. experienced substantial gains, rising by 4.5% and 3.9%, respectively, illustrating the overall strength among chipmakers.

In contrast, Wall Street faced difficulties last week as fears surrounding inflation and trade tariffs began to diminish investors' appetite for risk. One notable decline was seen with ON Semiconductor Corp., whose shares dropped over 8% after the company reported disappointing quarterly results. On the other hand, McDonald’s Corp. saw a rally, with its stock increasing by around 5% following its fourth-quarter earnings release.

Looking at economic indicators, U.S. consumer inflation expectations have remained steady for the third consecutive month at 3% as of January. This stable outlook contributes to the overall market's positive sentiment.

Most sectors within the S&P 500 concluded the day with gains, particularly in energy, information technology, and utilities. However, the financial sector faced some headwinds, prompting a decline that bucked the overall upward trend.

The Dow Jones Industrial Average also made gains, closing up roughly 167 points to finish at 44,470.41. While the S&P 500 increased by 0.67%, closing at 6,066.44, the Nasdaq Composite rose 0.98%, ending at 19,714.27.

Investors are currently anticipating earnings reports from major companies, including The Coca-Cola Co., Marriott International Inc., and Gilead Sciences Inc., further impacting market sentiment as earnings season unfolds.

CNN Money Fear and Greed Index Explained

The CNN Money Fear and Greed index, now at a reading of 46.2, has moved into the "Neutral" zone from a previous reading of 38.8. This index aims to quantify the current market sentiment, suggesting that extreme fear can weigh down stock prices, while increased greed may invigorate them. The index is computed based on seven indicators, each equally weighted.

The calculated range of the index spans from 0 to 100, where 0 represents maximum fear and 100 indicates the highest levels of greed. The current shift suggests a cautious optimism among investors, reflecting a significant shift in perspective from previous anxiety driven by economic unpredictability.

Nasdaq, Investment, Stocks