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From AI to bond yields: Market rally may shift focus

The NASDAQ (^IXIC) hit a new intraday record, surpassing a previous 2021 high of 16,212.23 points. The recent rally in the market has been fueled by tech giants such as Nvidia (NVDA). While investors are excited by these movements, many are considering the possibly volatile market impact of the Federal Reserve's next policy decision. Apollo Global's chief economist Torsten Sløk wrote in an email on Friday that he believes the Federal Reserve will not cut rates in 2024, surprising Wall Street investors. Piper Sandler Chief Investment Strategist Michael Kantrowitz joins Yahoo Finance to discuss market movements in the wake of Sløk's remark. Kantrowitz also explains how he thinks the rally will transition: "I think AI is a big part of obviously what's lifted, especially a bunch of large stocks very visible to the investment community, like the Mag 7. But when you look at leadership across the market, the stories are greater than that. There's pockets of even small caps where the indices have gone nowhere for two years, where there's pockets of earnings where they've been stronger, in industrials, for example, or areas of that market that have stronger balance sheets or higher profitability that have done quite well. I think there's a bit too much focus on AI, and I think there's a lot more going on underneath the surface of the equity market that can keep things afloat, as long as we don't either see a big spike in the unemployment rate or big spike in inflation expectations. " For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino


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