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What You Need to Know About Nasdaq ETF Investing in 2024
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The Nasdaq Composite index has delivered a remarkable performance in the past year, with technology stocks leading the charge and propelling it to new heights. The Nasdaq Composite has jumped 34.4% in the past year, while the Nasdaq 100 Index has skyrocketed 38.6% in a year.
Investors are particularly betting big on growth and innovation, favoring sectors such as artificial intelligence (AI), chip designers and cloud computing companies. Moreover, a resilient consumer base has boosted consumer stocks, helping the index to reach a great height. With the index firmly in bull territory, it seems poised for further gains.
Deriving from historical trends, the Nasdaq's current momentum may continue. Looking back at the six previous periods of stock market upswings since 1990, the Nasdaq has seen an average increase of 64% in the first two years of positive performance. Given its 43% jump last year and an extra 8% surge this year, there's potential for further upside, per a Motley Fool article, as quoted on Yahoo Finance.
Inside the Nasdaq Composite Index
Total stocks on the index are 3,366. The index is tech-heavy with about half of the weight in the Technology sector. Consumer Discretionary comes second followed by Healthcare.
Below, we highlight several factors that should boost the Nasdaq in 2024.
A Dovish Fed in 2024?
The latest datapoints indicate that inflation is on the decline. This may cause a less-hawkish Fed in the near term. There is now a chance of a 75 bps rate cut in 2024. Since the Nasdaq is a growth index and fares better in a low-rate environment, the index has every reason to hit further highs. Moreover, with the Fed being less-hawkish, the participation in the stock market is broadening out, which is a key tailwind for the sustenance of bull market.
AI Boom Here to Stay
The year 2023 was crucial in the AI industry, characterized by dynamic company moves, groundbreaking initiatives, major product launches, substantial investments and strategic acquisitions. And a wider spread of AI among consumers is expected this year. Bob O’Donnell, president of TECHnalysis, believes 2024 will be pivotal for AI, integrating it into daily tools like PCs, smartphones and multimedia platforms, as quoted in a Yahoo Finance article.
Companies like Google, Microsoft and Amazon recently introduced significant updates to their AI services. The current year is likely to witness the launch of AI-equipped PCs and other devices, moving some cloud-based AI processes to local devices.
Biotech Stocks to Rebound in 2024?
The Nasdaq has solid exposure to the biotech space. Biotech stocks, although suffering currently, may stage a rebound via upbeat M&A activities. Novel drug launches, chances of low rates and easy access to funds should buoy the zone in 2024.
ETF Picks
We highlight a few ETFs related to the Nasdaq that have decent upside left for 2024. These include Zacks Rank #2 (Buy) Invesco Nasdaq 100 ETF (QQQM - Free Report) , Zacks Rank #2 Invesco QQQ (QQQ - Free Report) , Zacks Rank #2 Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) , Zacks Rank #2 First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) and Zacks Rank #2 Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) .
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What You Need to Know About Nasdaq ETF Investing in 2024
The Nasdaq Composite index has delivered a remarkable performance in the past year, with technology stocks leading the charge and propelling it to new heights. The Nasdaq Composite has jumped 34.4% in the past year, while the Nasdaq 100 Index has skyrocketed 38.6% in a year.
Investors are particularly betting big on growth and innovation, favoring sectors such as artificial intelligence (AI), chip designers and cloud computing companies. Moreover, a resilient consumer base has boosted consumer stocks, helping the index to reach a great height. With the index firmly in bull territory, it seems poised for further gains.
Deriving from historical trends, the Nasdaq's current momentum may continue. Looking back at the six previous periods of stock market upswings since 1990, the Nasdaq has seen an average increase of 64% in the first two years of positive performance. Given its 43% jump last year and an extra 8% surge this year, there's potential for further upside, per a Motley Fool article, as quoted on Yahoo Finance.
Inside the Nasdaq Composite Index
Total stocks on the index are 3,366. The index is tech-heavy with about half of the weight in the Technology sector. Consumer Discretionary comes second followed by Healthcare.
Below, we highlight several factors that should boost the Nasdaq in 2024.
A Dovish Fed in 2024?
The latest datapoints indicate that inflation is on the decline. This may cause a less-hawkish Fed in the near term. There is now a chance of a 75 bps rate cut in 2024. Since the Nasdaq is a growth index and fares better in a low-rate environment, the index has every reason to hit further highs. Moreover, with the Fed being less-hawkish, the participation in the stock market is broadening out, which is a key tailwind for the sustenance of bull market.
AI Boom Here to Stay
The year 2023 was crucial in the AI industry, characterized by dynamic company moves, groundbreaking initiatives, major product launches, substantial investments and strategic acquisitions. And a wider spread of AI among consumers is expected this year. Bob O’Donnell, president of TECHnalysis, believes 2024 will be pivotal for AI, integrating it into daily tools like PCs, smartphones and multimedia platforms, as quoted in a Yahoo Finance article.
Companies like Google, Microsoft and Amazon recently introduced significant updates to their AI services. The current year is likely to witness the launch of AI-equipped PCs and other devices, moving some cloud-based AI processes to local devices.
Biotech Stocks to Rebound in 2024?
The Nasdaq has solid exposure to the biotech space. Biotech stocks, although suffering currently, may stage a rebound via upbeat M&A activities. Novel drug launches, chances of low rates and easy access to funds should buoy the zone in 2024.
ETF Picks
We highlight a few ETFs related to the Nasdaq that have decent upside left for 2024. These include Zacks Rank #2 (Buy) Invesco Nasdaq 100 ETF (QQQM - Free Report) , Zacks Rank #2 Invesco QQQ (QQQ - Free Report) , Zacks Rank #2 Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) , Zacks Rank #2 First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW - Free Report) and Zacks Rank #2 Fidelity Nasdaq Composite Index ETF (ONEQ - Free Report) .