U.S. Stock Market Update

By Echo Wang

(Reuters) – The S&P 500 scored a record closing high on Thursday, alongside gains in the Dow and Nasdaq, fueled by a sharp rise in Micron Technology (NASDAQ: MU) shares, and a strong U.S. jobless claims report that alleviated concerns regarding the labor market.

Micron Technology shares surged by 15.78% after the company forecasted first-quarter revenue exceeding expectations, driven by robust demand for memory chips, particularly in artificial intelligence applications.

The Philadelphia SE Semiconductor index experienced a 3.77% increase as most semiconductor stocks rallied. Recent strong U.S. economic data has lessened fears that the Federal Reserve may need to aggressively cut interest rates to combat any economic slowdown.

Notably, weekly jobless claims fell more than expected, indicating a stable labor market, while the final gross domestic product (GDP) reading confirmed a 3% growth in the second quarter.

Mike Dickson, Horizon Investments’ research head, stated, “It (the GDP number) reinforces the strong economic growth backdrop we have been seeing.”

The S&P 500 closed up 23.11 points (0.40%) at 5,745.37, even reaching an intraday high of 5,767.37.
Meanwhile, the Dow Jones Industrial Average rose 260.36 points (0.62%) to 42,175.11, and the Nasdaq Composite increased by 108.09 points (0.60%) to 18,190.29.

Seven of the 11 S&P 500 sectors saw gains, with materials leading at a 1.97% increase.
The S&P 500 and Dow have recorded multiple highs this year, while the tech-laden Nasdaq remains about 2% off its all-time peak. The market rally has been significantly influenced by optimism around AI and expectations for lower interest rates.

Additionally, metal prices received a lift as China committed to “necessary fiscal spending.” Copper miners like Freeport-McMoRan (NYSE: FCX) gained 7.45%, and lithium miners such as Albemarle (NYSE: ALB) and Arcadium added 9.92%.

Dickson noted, “The market is clearly driven by Chinese stimulus and government support intended to improve consumer health and alleviate real estate pressures.”

Conversely, energy stocks dropped by 2% in response to a decline in crude prices due to anticipated increases in supply from OPEC.
The Russell 2000 index, which tracks small-cap stocks, outperformed with a 0.62% gain.

Late Wednesday, Fed Governor Adriana Kugler expressed strong support for the central bank’s recent decision to begin monetary policy easing. Investors are now weighing between a 25- and 50-basis point cut, with expectations leaning towards a larger cut from the previous week’s 38.8% likelihood, according to the CME Group’s FedWatch Tool.

Chinese firms listed in the U.S. saw considerable gains with Li Auto (O:LI) rising 7.13%, PDD Holdings (O:PDD) advancing 13.28%, and Alibaba (N:BABA) up 10.08%.

Wells Fargo saw a rise of 5.19% after submitting a review to the Fed for lifting asset cap restrictions.
Southwest Airlines (NYSE: LUV) increased by 5.42% after raising its third-quarter revenue forecast, while Accenture (NYSE: ACN) rose 5.57% following an annual revenue forecast exceeding previous estimates.

On the NYSE, advancing issues outnumbered decliners by a 1.94-to-1 ratio, with 626 new highs and 71 new lows recorded.
The S&P 500 saw 50 new 52-week highs and two new lows, while the Nasdaq Composite had 95 new highs and 94 new lows.

Volume on U.S. exchanges totaled 12.46 billion shares, compared to an average of 11.82 billion over the past 20 trading days.