Tech Stocks Soar as Investors Await Fed's Next Move

US stocks surged on Thursday, with the tech-heavy Nasdaq Composite leading the charge, as investors weighed the latest economic data against expectations for a Federal Reserve interest rate cut next week. The S&P 500 and Nasdaq Composite both extended their winning streaks to four consecutive sessions, buoyed by strong gains in the technology sector.

Powering Ahead: Tech Titans Fuel Market Momentum

Inflation Cools, Jobless Claims Rise

The latest economic data provided mixed signals for investors. The August Producer Price Index, a measure of wholesale inflation, rose 0.2% month-over-month, slightly above expectations. However, July's PPI reading was revised lower, indicating that inflationary pressures may be easing. Meanwhile, initial jobless claims climbed more than expected to 230,000 last week, suggesting a potential softening in the labor market.These data points have reinforced bets that the Federal Reserve will opt for a more modest 25-basis-point rate cut at its policy meeting next week, rather than a larger 0.5% reduction. Traders' odds of a 25-basis-point cut have now risen to 87%, up from just 50% a few days ago.

Tech Titans Lead the Charge

The technology sector was the standout performer on Thursday, with the Nasdaq Composite jumping around 1% and the S&P 500 rising 0.7%. Big-name tech stocks like Nvidia and Meta were among the top gainers, each rising roughly 2%.The rally in tech stocks has been fueled by a combination of factors, including the prospect of a less aggressive Fed, as well as continued investor enthusiasm for the sector's growth potential. The Nasdaq Composite has now added more than 5% over the past four sessions, outpacing the broader S&P 500's 3% gain during the same period.

Moderna Stumbles, Oil Prices Climb

Not all the news was positive, however. Shares of Moderna plunged 12% after the vaccine maker lowered its annual revenue outlook for 2025 and announced plans to slash its R&D budget.In the energy market, oil prices jumped more than 2% as Hurricane Francine disrupted production in the Gulf of Mexico, leading to the shut-in of around 670,000 barrels per day. West Texas Intermediate crude climbed to $69 per barrel, while Brent crude rose to $72 per barrel.

Mortgage Payments Become More Affordable

In the housing market, Redfin reported that the median monthly mortgage payment has declined by 1.3% compared to a year ago, thanks to a drop in mortgage rates. The average rate on the 30-year fixed-rate mortgage fell to 6.2%, the lowest level since February 2023, as investors anticipate a rate cut from the Fed.However, home prices remain elevated, with the median sales price up 3.7% year-over-year, due to a persistent lack of supply. This, combined with buyer expectations of lower rates, is keeping the housing market in a state of stagnation.

Apple Expands into Hearing Aids

In other news, Apple received approval from the FDA for its hearing aid software to be used in AirPods. The feature, which was unveiled at the tech giant's annual product launch earlier this week, is intended to amplify sounds for individuals with mild to moderate hearing impairment.The approval of the hearing aid software is a significant development for Apple, as it expands the company's reach beyond its core smartphone and computing products. The move could also open up new revenue streams and further solidify Apple's position as a leader in the consumer electronics market.