Markets burst with color, FOMO, dip-buying kicks in, driving Nvidia, Tesla, SMCI higher, along with gold & palladium. Australia’s market poised to hit higher levels ahead

Overnight the Nasdaq rose over 1%, with Nvidia $NVIDIA (NVDA.US)$ shares climbing 4.9% ahead of the world’s biggest chipmaker releasing results that could move its stock by 8% (and drive markets) in either direction, as it makes up 9% of the Nasdaq. Tesla’s $Tesla (TSLA.US)$ stock gained 2%, boosting Elon Musk’s wealth by US$12.9 billion in a single day, ahead of SpaceX launching its fourth flight of the year. Meanwhile, gold and palladium surged as Russia’s war against Ukraine intensifies.

So why could higher levels lie ahead for Aussie shares? Many reasons. Australia’s economy is growing stronger than expected, company earnings growth forecasts are being upgraded for next year, and Bitcoin has hit a new record, benefiting our biggest tech company, Block $Block (SQ.US)$ . Additionally, the US dollar has fallen for the second consecutive day. More pressure is likely to ease off the USD, which could push commodity prices higher, allowing them to explore new territory. This will likely drive commodity stocks up, broadening Australia’s sharemarket rally.

What I mean by that is, so far this month, technology stocks have delivered the best returns, with shares such as Block $Block (SQ.US)$ Technology One $Technology One Ltd (TNE.AU)$ and Megaport $Megaport Ltd (MP1.AU)$  gaining 20%. But with copper, gold, and iron ore prices rebounding from their lows, shares in Australia’s big miners will likely start to rally, supporting the market in moving to even higher levels.

Finally, consider that FOMO is real, just like the Santa rally has been in years that have gone by. We’re entering what is traditionally the best period for sharemarket returns, with stocks historically rallying from November to February. So I’d expected buying in The Australian shares ETF, VAS $Vanguard Australian Shares ETF (VAS.AU)$ to pick up as the market is likely to explore higher levels.

That said, there’s always the risk of a pullback in markets. We’re seeing risk rise with the rising tensions in Russia-Ukraine. That could make investors jittery and cause markets bumps. But, we know markets have weathered similar challenges in the past, this time shouldn’t be any different. But I do think buying of gold, gold stocks and ETF such as Worlds’ biggest gold ETF, $SPDR Gold ETF (GLD.US)$ will pick up.