Why the Nasdaq Has Surged Nearly 6% in the Last Four Sessions

Nasdaq Composite Index has been on a roller coaster

After the Nasdaq Composite Index slipped into correction territory in May, tech stocks made an abrupt reversal in June. The tech-laden index jumped for the fourth straight session on June 7, surging 1.66%. The index has jumped 5.6% in the past four sessions, the best performance it’s had this year.

The possibility of a rate cut sent stocks surging last year. Loose monetary policy has been a massive boost for stocks in the wake of the financial crisis.

Microsoft (MSFT), which has been one of the most resilient stocks in high-volatility periods in the past year, has consolidated its position as the world’s most valuable public company. The stock has jumped nearly 10% in the last four sessions and has a market cap of over $1 trillion again.

Stocks face some headwinds, but the dovish Fed will aid the market

While the Fed’s dovish stance will support it to an extent, the market faces many headwinds. The current rally has led to stocks’ being richly valued again. Economic indicators, however, suggest that the economy is slowing. The US economy added only 75,000 jobs last month, much lower than expectations of the addition of 185,000 new jobs.

Meanwhile, uncertainties about the trade war are still looming, threatening to slow down the economy. The good news is that the possibility of a rate cut will support stocks when they fall.