Apple Hits All-Time High Following Powell's Interest Rate Cut Signal

US Big Tech Rally Gains Momentum

[Image source=Reuters Yonhap News]

The U.S. Federal Reserve (Fed) fueled the rally of big tech stocks on the 13th (local time) by signaling interest rate cuts next year. Apple, the leader of big tech, hit an all-time high.

On that day, Apple’s stock price on the U.S. Nasdaq market closed at $197.96, up 1.67% from the previous session. This surpassed the previous record closing price of $195.83 on July 24, marking an all-time high and bringing the stock close to breaking the $200 mark per share. With the stock price increase, the market capitalization expanded to $3.079 trillion, once again exceeding $3 trillion.

Apple’s stock price, which has been on an upward trend since early this year, rose by 52% compared to the beginning of the year. Expectations for early rate cuts due to economic slowdown factors such as cooling employment and easing inflation lifted investor sentiment, leading to continued strength along with other major tech stocks. Bloomberg reported, "Market expectations that Apple can rebound its earnings next year after four consecutive quarters of declining hardware sales have acted as an additional driving force for Apple’s stock price increase."

On the day of the Fed’s sharp shift in interest rate direction, tech stocks collectively cheered. Most major U.S. tech stocks, including Apple, Nvidia (0.90%), Meta (0.16%), Amazon (0.92%), Alphabet (0.038%), and Tesla (0.96%), closed higher that day.

The seven major U.S. tech stocks known as the 'Magnificent 7' have risen by an average of about 70% since the beginning of the year, driven by expectations for growth in artificial intelligence (AI). Despite pressures from surging U.S. Treasury yields and geopolitical conflicts such as wars, their relatively strong performance has been supported by solid earnings.

Among them, Nvidia, a representative beneficiary of AI, recorded the highest increase, soaring 224% since early this year, fueled by heightened market expectations and upward revisions of earnings forecasts. Microsoft, the largest investor in OpenAI, which has led the AI boom with 'ChatGPT,' rose 67%.

This content was produced with the assistance of AI translation services.