Technology stocks rose broadly, with Apple (AAPL.US) shares closing at a record high on Wednesday, driven by bets that the Federal Reserve will soon begin cutting interest rates as inflation slows. Apple shares closed up 1.7% at $197.96, surpassing the previous closing record set in July. Since the beginning of this year, Apple's stock price has risen by 52%, with its market value reaching approximately US$3.08 trillion, consolidating Apple's position as the world's most valuable company.
Apple shares have risen along with other technology stocks over the past month on signs that U.S. inflation is cooling, the economy remains resilient and U.S. Treasury yields have fallen. This view was further reinforced on Wednesday when the Federal Reserve kept interest rates unchanged at its third meeting and forecast a series of rate cuts next year. The 10-year U.S. Treasury yield fell to its lowest level since August last year, nearly falling below 4%.
The recent surge in Apple shares is a reversal from last October, when it closed at its lowest level in about five months amid concerns about revenue growth and sales in its China operations. Apple's revenue declined in each quarter of fiscal 2023 compared with the same period last year. Last month, the company disappointed some investors by predicting holiday season sales would be about the same as last year.
Still, Wall Street predicts the company's revenue growth will reaccelerate in 2024 as demand for smartphones, laptops and computers rebounds, based on the average of analyst forecasts.