S&P 500 Hits Record High as Wall Street Surges Amid Investor Optimism.
On Thursday, Wall Street charged ahead, with the S&P 500 soaring 1% to achieve a record closing high, while the Nasdaq composite climbed 1.5%, buoyed by technology and growth stocks. Investor optimism regarding potential Federal Reserve rate cuts this year fueled the rally.
The Philadelphia Semiconductor Index outpaced the broader market, closing up 3.36% at a record high as investors flocked to chip companies, anticipating increased demand driven by artificial intelligence.
In Washington, Fed Chair Jerome Powell testified before a U.S. Senate committee, indicating that the central bank is nearing confidence that inflation is declining toward the 2% target, potentially paving the way for rate cuts. Powell’s remarks bolstered expectations for a June rate cut, boosting equity indexes that had wavered in the days leading up to his Congressional testimonies, which commenced on Wednesday.
Additionally, Labor Department data revealed that the number of Americans filing new claims for unemployment benefits remained unchanged, signaling a steady easing of the labor market.
Market Responds to Employment Data, Anticipation Builds for Nonfarm Payrolls Report.
Following the release of private payrolls, job openings, quit rate, and unemployment claims data, investors gained insights into a job market that appears to be softening while remaining solid. Fed Chair Jerome Powell’s remarks, indicating the possibility of rate cuts this year, aligned with market expectations and contributed to positive sentiment. Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, noted that Powell’s comments and the week’s employment data supported the narrative of a slowing yet robust employment landscape.
Investors are eagerly awaiting the nonfarm payrolls report on Friday for further labor market insights. Meanwhile, market indices saw significant gains, with the Dow Jones Industrial Average rising 0.34% to 38,791.35, the S&P 500 climbing 1.03% to 5,157.36, and the Nasdaq Composite hitting an intraday record high, ending up 1.51% at 16,273.38.
Nine of the 11 major S&P 500 sectors saw gains, with technology and communications services leading the pack. Notable contributors to index gains included Meta and Nvidia. However, lingerie retailer Victoria’s Secret & Co experienced a sharp decline due to a weak annual forecast.
On a positive note, Kroger Co’s shares rallied 9.8% after the grocer forecasted annual sales and profit above Wall Street estimates. Market breadth was favorable, with advancing issues outnumbering decliners on both the NYSE and Nasdaq exchanges.
Overall, the S&P 500 recorded 82 new 52-week highs and one new low, while the Nasdaq saw 331 new highs and 88 new lows. Trading volume remained robust, with 11.19 billion shares exchanged on U.S. exchanges compared to the 12.06 billion moving average for the last 20 sessions.