Nasdaq Hits Record High as Tech and AI Stocks Rally
The Nasdaq Composite closed at a record high for a second consecutive session, driven by semiconductor and AI infrastructure stocks, while Indian regulators warned investors about unauthorized trading schemes.
Global equity markets extended their rally, with the Nasdaq Composite closing higher for a second consecutive session, driven by gains in AI and semiconductor stocks. The Nasdaq Composite booked a second straight record closing high on Tuesday, finishing at 27,599.89, a gain of 0.45%. The S&P 500 also reached a record, closing at 7,818.93, up 0.58%, while the Dow Jones Industrial Average rose 0.49% to 51,521.28. On Tuesday, 10 of the S&P 500’s 11 sectors finished in the green for a third straight session, a feat not seen since December 2023.
Regulatory Scrutiny in India
As markets surged, India's Securities and Exchange Board issued warnings about unauthorized collective investment schemes, targeting platforms like Upstox and highlighting compliance risks for retail investors. A SEBI circular dated July 6, 2022, cautioned investors against such schemes. Upstox Securities Private Limited, a wholly owned subsidiary of RKSV Securities India Private Limited, allows investors to file complaints via the SEBI SCORES portal. The compliance officer at Upstox is Mr. Kapil Jaikalyani.
Investors are cautioned to avoid sharing trading credentials like login IDs, passwords, and OTPs, or discussing trading strategies and position details. Regulators also warn against trading in leveraged products like options without proper understanding, and against following unsolicited tips from social media platforms or unregistered advisors. The mandatory details for filing a complaint on the SCORES portal include name, PAN, address, mobile number, and email ID.
Tech Sector Leadership
The Magnificent Seven tech megacaps led market gains, with Nvidia approaching a $6 trillion valuation and semiconductor indices rising amid AI infrastructure demand. The group had a combined market capitalization of $24.95 trillion on Tuesday, just shy of reaching $25 trillion for the first time. Nvidia's market cap climbed to more than $5.76 trillion, nearing the $6 trillion milestone. Six of the seven stocks rose, and the Semiconductor Index gained 0.34%.
While the Magnificent Seven had struggled earlier in the year, software stocks, semiconductors, and megacaps began moving higher in unison starting in August. This followed a historic reversal in the AI-fueled momentum trade during July. Ross Mayfield, an investment strategist at Baird Private Wealth Management, noted the shift. "You had two huge cyclical headwinds that weighed on corners of the market that are more sensitive to interest rates and the economy," he said.
Trading Activity and Risks
Retail traders faced significant losses in equity futures and options, with transaction costs eroding profits amid volatile market conditions. A study found that 9 out of 10 individual traders in the equity Futures and Options segment incurred net losses. On average, loss makers registered a net trading loss close to ₹50,000. They expended an additional 28% of net trading losses as transaction costs. Even profitable traders incurred between 15% to 50% of their profits as transaction costs.
Other market indicators showed the VIX fear gauge down 3.29% to 15.01, while the U.S. 10-Year Treasury yield was at 5.310%. Commodity prices were mixed, with crude oil up 1.08% to $90.41 per barrel, but gold down 0.22%. The Federal Reserve delivered its first interest-rate hike in three years in September, and interest-rate futures markets expect another hike this year.
