Wall Street rallies, S&P 500 posts record closing high
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid
Wall Street charged ahead on Thursday, with the S&P 500 rising 1 percent to a record closing high while the Nasdaq composite finished up 1.5 percent, with the biggest boosts from technology and growth stocks on increasing investor optimism about prospects for Federal Reserve rate cuts this year.
The Philadelphia Semiconductor index outperformed the broader market to finish up 3.36 percent at a record closing high as investors piled into chip companies, which they see as key beneficiaries to artificial intelligence related demand.
In Washington, Fed Chair Jerome Powell told a U.S. Senate committee that the U.S. central bank is “not far” from being confident inflation is declining toward the 2 percent target, which would make rate cuts possible.
READ: Fed’s Powell still sees rate cuts, but inflation progress ‘not assured’
His comments reinforced investor hopes for a first rate cut in June and boosted equity indexes that had faltered in the days leading up to his Congressional testimonies, which kicked off on Wednesday with an appearance before the U.S. House Financial Services Committee.
U.S. labor market
Also the number of Americans filing new claims for unemployment benefits was unchanged as the labor market continued to ease, Labor Department data showed.
This followed private payrolls, job openings, quit rate and unemployment claims data that gave investors a picture of a jobs market that was softening but still solid.
READ: US labor market steadily easing as job openings, resignations decline
Powell “essentially left rate cuts on the table for this year. That’s what markets wanted to hear,” said Anthony Saglimbene, Chief Market Strategist, Ameriprise Financial.
“The market’s also responding well to the employment data we’ve had so far this week,” he said. “It adds to the narrative that we’re starting to see employment slow but still solid.”
But Saglimbene noted investors will still anxiously monitor the nonfarm payrolls report on Friday for further details on the labor market.
The Dow Jones Industrial Average rose 130.30 points, or 0.34%, to 38,791.35, the S&P 500 gained 52.60 points, or 1.03%, to 5,157.36.
The Nasdaq Composite hit an intraday record high and narrowly missed a closing record to end up 241.83 points, or 1.51%, at 16,273.38.
“Everybody is waiting for something bad to happen but nothing bad has happened to the economy, markets, earnings and policy,” said John Augustine, chief investment officer at Huntington Private Bank. “That’s why we’re building momentum.”
Top performers
Nine of the 11 major S&P 500 sectors rose, with communications services and information technology stocks jostling for position as the biggest gainer. Technology had the final say, ending up 1.89 percent, followed by communications services with a 1.84-percent gain.
Megacap growth stocks were major contributors to index gains including social media company Meta, which added 3.2 percent, and AI chip darling Nvidia, which ended up 4.5 percent.
Shares in lingerie retailer Victoria’s Secret & Co fell sharply on a weak annual forecast, finishing down 29.7 percent.
Kroger Co shares rallied 9.8% after the grocer forecast annual sales and profit above Wall Street estimates as it bet on higher demand for groceries at its stores, tighter cost control and strength in its private-label brands.
Advancing issues outnumbered decliners by a 3.09-to-1 ratio on the NYSE where there were 736 new highs and 47 new lows.
On the Nasdaq 2,592 stocks rose and 1,670 fell as advancing issues outnumbered decliners by about a 1.55-to-1 ratio.
The S&P 500 posted 82 new 52-week highs and one new low while the Nasdaq recorded 331 new highs and 88 new lows.
On U.S. exchanges 11.19 billion shares changed hands compared with the 12.06 billion moving average for the last 20 sessions.
