NEW YORK: Wall Street’s main indexes climbed on Thursday, with the Nasdaq leading the charge supported by chipmakers, while the benchmark S&P 500 hit an intraday record high as investors remained upbeat about the prospects of the Fed’s interest rate cut in June.
The Philadelphia Semiconductor index hit a fresh record high and was last up 3.2%, with Qualcomm leading chipmakers’ rally.
Nine the 11 major S&P 500 sectors rose, with rate-sensitive information technology stocks up 1.5% and in the lead.
Most megacap growth and technology stocks also advanced, with Meta and AI darling Nvidia up 2.7% and 3.4%, respectively.
Federal Reserve Chair Jerome Powell said on Thursday the US central bank is “not far” from getting enough confidence that inflation is heading to the Fed’s 2% goal to be able to start interest-rate cuts.
This followed his appearance before the House Financial Services Committee on Wednesday at which the Fed chair said interest rate cuts are still likely in the coming months, while also repeating that ongoing progress in lowering inflation was “not assured.” The comments kept alive investors’ expectations of a rate cut in June, giving a boost to U.S equities which had faltered in the days leading up to the testimony.
Meanwhile, Fed Governor Michelle Bowman said the US economy is not at the point where the central bank should reduce interest rates.
All eyes will remain on Powell who is set to wrap up his two-day testimony on Thursday.
The number of Americans filing new claims for unemployment benefits was unchanged last week as the labor market continued to gradually ease, the Labor Department’s data showed.
The data comes ahead of the crucial nonfarm payrolls report, which could provide further details on the strength of the US labor market on Friday.
“While the Fed has said it no longer needs the labor market to weaken significantly in order to cut rates, the market may be encouraged by this type of data,” said Chris Larkin, managing director for trading and investing at E*TRADE from Morgan Stanley.
“But that sentiment could evaporate quickly if tomorrow’s monthly jobs report fails to point in the same direction.” At 11:38 a.m. ET, the Dow Jones Industrial Average was up 125.82 points, or 0.33%, at 38,786.87, the S&P 500 was up 44.25 points, or 0.87%, at 5,149.01, and the Nasdaq Composite was up 199.87 points, or 1.25%, at 16,231.41.
Lingerie maker Victoria’s Secret & Co dropped 30.4% on a weak annual forecast.
Advancing issues outnumbered decliners by a 2.99-to-1 ratio on the NYSE and by a 1.67-to-1 ratio on the Nasdaq.
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