The Nasdaq Composite index has gotten off to a solid start in 2023, gaining nearly 9% thanks to cooling inflation and expectations of a pivot by the Federal Reserve, which has been raising interest rates for the past year in a bid to get a handle on the surging inflation.

There are reports that Fed officials may be looking to reduce the pace of rate hikes, a move that could bode well for the stock market that has taken a beating over the past year thanks to the central bank's hawkish stance. Not surprisingly, the Nasdaq has started the year on the front foot, and it could maintain its momentum for the rest of the year if inflation keeps cooling. Additionally, the U.S. economy is expected to avoid a recession in 2023, as per Goldman Sachs, which may add more fuel to the stock market rally.

The Nasdaq's rally has rubbed off positively on shares of Meta Platforms (NASDAQ: META) and Micron Technology (NASDAQ: MU), two tech stocks that had a forgettable 2022 amid worsening business conditions. While Meta struggled on account of a sharp slowdown in advertisement revenue and heavy investments in the metaverse that took a toll on its bottom line, Micron was battered by a cyclical downturn in the memory industry.

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Source Fool.com