Nasdaq Surges as Inflation Report Looms

The Nasdaq rose sharply on Tuesday, led by gains in megacap tech stocks, ahead of a critical inflation report that could affect Federal Reserve interest rates. Broader markets struggled, with most S&P sectors down. Investors speculate on potential rate cuts amid strong job growth data.

On Tuesday, the Nasdaq emerged as the standout performer on Wall Street, buoyed by robust gains in megacap technology stocks. The market's attention is firmly on a pivotal inflation report due this week, which could play a crucial role in shaping the Federal Reserve's forthcoming decision on interest rates.

Despite early gains in megacap stocks, broader market indices faced pressure, with nine out of the 11 major S&P sectors experiencing declines. Utilities led the downward trend, falling 1.2%. In morning trading, the Dow Jones dipped 145.77 points, while the S&P 500 edged lower by 0.16 points. However, the Nasdaq Composite climbed by 82.12 points.

Investors are keenly awaiting the November consumer price index (CPI) reading, anticipated just before the Fed's meeting on December 17-18. With predictions of a slight inflation uptick, market bets on a 25 basis point rate cut are high, driven by recent employment data showing job growth but rising unemployment.

(With inputs from agencies.)