S&P 500 ends near record high as AI optimism lifts chipmakers
Reuters
Published Jan 18, 2024 06:13AM ET
Updated Jan 18, 2024 07:45PM ET
By Noel Randewich and Ankika Biswas
(Reuters) -U.S. stocks ended sharply up on Thursday, with the S&P 500 approaching record highs as AI optimism drove gains in Nvidia (NASDAQ:NVDA) and other chipmakers.
U.S.-listed shares of Taiwan Semiconductor Manufacturing (TSMC) soared nearly 10% after the world's largest contract semiconductor maker projected 2024 revenue growth of more than 20% on booming demand for high-end chips used in artificial-intelligence applications.
Heavyweight chipmaker Nvidia rose 1.9% to a record high, and it was the most-traded company on Wall Street, with almost $28 billion worth of shares exchanged. Rival Advanced Micro Devices (NASDAQ:AMD) rose 1.6% and also notched a record high.
Broadcom (NASDAQ:AVGO), Qualcomm (NASDAQ:QCOM) and Marvell (NASDAQ:MRVL) Technology gained more than 3% each. The Philadelphia SE semiconductor index rallied 3.4% and approached its December 2023 record high.
"AI has caused this industry to have a 'rip your face off' rally, and I don't think it's stopping anytime soon," said Jake Dollarhide, CEO of Longbow Asset Management.
Apple (NASDAQ:AAPL) jumped 3.3% after BofA Global Research upgraded the iPhone maker's stock to "buy" from "neutral." That helped the S&P 500 information technology index rise 2% and hit a record high.
The S&P 500 climbed 0.88% to end the session at 4,780.94 points. The benchmark is down just 0.3% from its record-high close in January 2022.
The Nasdaq gained 1.35% to 15,055.65 points, while the Dow Jones Industrial Average rose 0.54% to 37,468.61 points.
Data showed the number of Americans filing new claims for unemployment benefits fell last week to a late-2022 low, suggesting solid job growth in January.
Wall Street has wavered in recent sessions as investors became less sure the Federal Reserve will begin cutting interest rates in March.
The S&P 500 lost ground on Tuesday and Wednesday following strong December retail sales data and after policymakers talked down expectations for an early start to rate cuts.
Traders now see a 56% chance for a 25-basis-point rate cut in March, compared with a chance above 80% a month ago, according to the CME Group's (NASDAQ:CME) FedWatch Tool.
Interest rate-sensitive sectors dipped, with the S&P 500 real estate index down 0.6% and utilities index losing 1.05%.
Atlanta Federal Reserve President Raphael Bostic said he was open to reducing rates sooner than he had anticipated if there is "convincing" evidence in coming months that inflation is falling faster than he expected. Bostic had previously said he expected it would be appropriate to cut rates in the second half of 2024.
Humana (NYSE:HUM) dropped 8% after the health insurer forecast fourth-quarter medical costs to be higher than previously expected. Peer UnitedHealth (NYSE:UNH) fell 1.6%.
Get The News You Want
KeyCorp (NYSE:KEY) dropped 4.6% after the lender posted a decline in fourth-quarter profit, while Birkenstock (NYSE:BIRK) sank about 8% after missing quarterly profit expectations.
Spirit Airlines (NYSE:SAVE) ended down more than 7% after news it is looking at options to refinance its debt and is not considering restructuring.
Advancing issues outnumbered falling ones within the S&P 500 by a two-to-one ratio.
The S&P 500 posted 30 new highs and seven new lows; the Nasdaq recorded 56 new highs and 180 new lows.
Volume on U.S. exchanges was relatively heavy, with 11.8 billion shares traded, compared with an average of 11.5 billion shares over the previous 20 sessions.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.