3 Reasons Why Nasdaq ETFs Hit a Record High
Still, the tech sector rallied, helping the Nasdaq hit a record high. This puts focus on exchange-traded funds (ETFs) like Invesco QQQ QQQ, Direxion NASDAQ-100 Equal Weighted Index Shares QQQE and Invesco NASDAQ 100 ETF QQQM.
Below, we have highlighted the reasons behind the rally.
Tech Sector Boosted by Chip Duty Exemptions
Technology stocks received a boost from Trump's remarks suggesting that some companies may be exempted from the upcoming 100% tariffs on semiconductors. Most big companies are likely to be exempted. NVIDIA NVDA rose around 0.8% for the day, as the sector notched gains for the second straight session. Advanced Micro Devices Inc. AMD rose 5.7% on Aug. 7.
Apple Surges on $100 Billion U.S. Investment
Apple AAPL shares rallied 3.2% Thursday after Trump and CEO Tim Cook announced a massive $100 billion investment in the United States. As part of the agreement, Apple will begin manufacturing cover glass for iPhones and Apple Watches in Kentucky, signaling a major expansion of its domestic supply chain (read: ETFs Set to Benefit from Apple's $100B U.S. Bet).
Fed to Cut Rates Ahead?
Stocks rebounded late in the trading session after Trump nominated Stephen Miran, current chairman of the Council of Economic Advisors, to fill a vacancy on the Federal Reserve Board of Governors. The nomination followed Adriana Kugler's resignation last Friday. Miran's appointment will last until Jan. 31, 2026.
Talks are rife that the Fed may cut rates ahead. San Francisco Fed President Mary Daly said recently that the Federal Reserve may need to cut interest rates in the coming months due to a weakening labor market, despite near-term inflation pressures from tariffs (read: Fed to Cut Rates Ahead? Growth ETFs to Play).
There are continuing claims for unemployment benefits, which rose to 1.974 million—the highest level since November 2021. The rise came after a disappointing July jobs report and downward revisions to employment data from May and June. Such data points toward the likelihood of a rate cut sooner than expected.
Per the CME FedWatch Tool, the chances of a 25-bp rate cut are 91.4% in the September Fed meeting, up from 60.8% recorded a month ago.
What Lies Ahead?
The generative AI boom remains a key driver of Nasdaq's momentum. Investor euphoria continues to build around the growing demand for data centers, high-performance GPUs, AI-centric software and automation solutions. International investors are returning to U.S. tech in a big way. With geopolitical tensions taking center stage, AI-driven tech stocks are viewed as a relatively safe haven.
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