US stocks rose on Thursday, with technology stocks extending gains in the final hour of trading, as optimism over artificial intelligence continued to push semiconductor stocks higher despite growing uncertainty over whether the Federal Reserve will cut interest rates as quickly as expected. Markets.
What is happening
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The Dow Jones Industrial Average rose 175 points, or 0.4%, to 37,447 points.
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The Standard & Poor's 500 index rose 37 points, or 0.7%, to 4,771 points.
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The Nasdaq Composite Index advanced 192 points, or 1.3%, to trade at 15,047, erasing its losses since the beginning of the year to record a positive gain of 0.3% for the year.
On Wednesday, the Dow Jones Industrial Average fell 94 points, or 0.3%, while the S&P 500 and Nasdaq Composite fell 0.6%, according to FactSet data.
What drives the markets?
US stock indexes gave up some of the losses they suffered earlier in the week, with giant technology stocks boosting the large-cap S&P 500 and the tech-heavy Nasdaq Composite in Thursday afternoon trading, while the Dow Jones Industrial Average rose despite a decline in healthcare stocks. Health. .
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The SMH VanEck Semiconductor exchange-traded fund, which achieved results that beat analysts' expectations, jumped 8.5% on Thursday.,
Which tracks 25 of the largest US-listed chipmakers, including… Advanced Micro Devices Company
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It jumped more than 3% to an all-time high, according to FactSet data.
Meanwhile, Wamsi Mohan, an analyst at Bank of America Securities, commented with a new optimistic view on… Apple company apple stock,
On Thursday, it was upgraded to buy from neutral amid long-term optimism about the iPhone business. Apple shares rose nearly 3.5%, on track for their biggest single-day advance since May 5, according to Dow Jones market data.
However, investors remain concerned that the Fed may not ease monetary policy tightening as quickly as markets expect.
The Fed's last meeting in December had markets increasingly anticipating interest rate cuts to begin in March 2024. These expected cuts were also expected to be much deeper than the central bank had expected for this year.
be seen: The Fed's Bostic calls for first rate cuts in the July-September quarter
However, those expectations were thrown into doubt this week after strong retail sales data for December and after policymakers lowered expectations for an early start of interest rate cuts. Investors in stock and bond markets now expect that the central bank will be in no rush to reduce borrowing costs as the economy shows signs of resilience.
US stocks have suffered a volatile start to the year, with the S&P 500 falling from near-record highs. The 10-year Treasury yield BX:TMUBMUSD10Y jumped more than 30 basis points to about 4.14% this week, according to FactSet data.
“The story this week continues to be the strong economic data and how it could keep interest rate cuts on ice for a while,” said Chris Larkin, managing director of e-commerce trading and investing at Morgan Stanley.
“Until we start seeing consistently lower numbers, especially in the labor market, the Fed will likely stick with its higher stance for a longer period,” he said.
In US economic data, the number of Americans filing for unemployment benefits for the first time last week fell by 187,000 to the lowest level in 16 months, indicating that layoffs remain near record lows. Economists had expected new claims in the week ending January 13 to reach 208,000.
Meanwhile, the Federal Reserve Bank of Philadelphia said its measure of regional business activity rose to minus 10.6 in January from minus 12.8 the previous month. Any reading below zero indicates deteriorating conditions.
The government said on Thursday that the number of new homes fell to 1.46 million at an annual pace from 1.53 million in November. Economists had expected a rate of 1.43 million.
Jamie Chisholm contributed.
