In addition, the core PEC, the Fed's most watched inflation indicator, softened in February, rising 4.6% year-over-year, which was lower than expected, further convincing investors that the Fed is about to stop raising interest rates.
Myles Bradshaw, head of asset division strategy at JPMorgan Chase, noted that the market generally believes that interest rates are now considered to have peaked and expects a rate cut by the end of the year. However, JPMorgan still predicts that the Fed will raise rates at least once more, and will not cut rates until 2024.
There are also views that the collective rise in technology stocks in the first quarter was actually largely due to overselling last year.
In 2022, the Fed's aggressive rate hike greatly hurt tech stocks. From a macro perspective, soaring inflation and rising interest rates drove investors away from growth companies and into companies with high margins, stable cash flows and high dividend yields. The market overreacted to the consequences of the rate hike, and as a result, tech stocks fell too much, so in this year, the rally was also the biggest.
Looking ahead to the market, how long can the rally in tech stocks last? The market does not yet have a consensus on this question.
Martin Tilier, a columnist on NASDAQ's official website, pointed out that the next, the performance of technology stocks largely depends on the second quarter of the Fed's policy. But he believes that in the long run, the rally will continue, now is still a good time to buy technology stocks.
And Michael Landsbera, chief investment officer at lands Bera Bennett, believes that in the current macroeconomic environment, people should not use technology stocks as a safe haven. He pointed out that as the U.S. economy falls into recession, demand will begin to soften and the fundamentals of technology companies are continuing to deteriorate