When the pre-Christmas week was just beginning, the global investment sentiment had been fuelled by record-breaking earnings of a great chipmaker for gadgets and data centers Broadcom. The bullish appetites were sparked as that was the last big tech company to report before the year-end, and it luckily projected a better trend for chip demand from flagship customers like Apple, Samsung, Huawei and Cisco.

The value of Broadcom added more than 35% within a couple of trading days to hit $1 trillion or over $250 per share. This was around an annual target area for the firm according to estimates of many reputable investing houses. The tech-heavy Nasdaq Composite index exceeded a psychological mark of 20,000 points.

The two achievements in sync prompted a natural wave of massive profit taking by a happy but still wary crowd, due to much weaker prospects provided by some other AI era leaders like Adobe and Oracle, especially ahead of the last Federal Reserve’s policy decision in 2024. Thus, the widespread stock rally was stopped and faced an even deeper 3% retracement from fresh peaks in terms of the S&P 500 broad market barometer. The S&P 500 had to retrace from above 6,050 to below 5,850 points on Wednesday night of December 18, as a response to the U.S. central bank’s relentless remarks. Its chair Jerome Powell clarified that policymakers shifted their road map from previously supposed three or four interest rate cut moves to only two small 0.25% steps to lower borrowing costs in a very narrow and careful way. Too high levels of normalised rates restrict access to cheap credit resources, being negative for stocks, yet this impact is limited in time and scale due to a solid labour market, hopes for soft landing, running away from inflation to assets and lower rates in other countries. A rate differential factor is also boosting yields of the U.S. public debt, which led the Greenback index to fresh 24-month highs above 108 points, suppressing gold prices.