S&P 500 Ends a Hair Below All Time Highs as Tech Marches On

By Yasin Ebrahim

Investing.com – The S&P 500 closed just below a record high Wednesday, underpinned by a strong day for big tech and data pointing to underlying strength in the economic recovery that lifted investor sentiment.

The S&P 500 gained 1.37% to 3,379 just short of its closing high of 3,386.15 seen on Feb. 19. The Dow Jones Industrial Average rose 1.05%, or 289 points, and the Nasdaq Composite jumped 2.1%.

In a sign the economic recovery continues to hum along, the pace of inflation continues to gather pace on the back of rising energy prices.

"The 0.6% month-on-month/m increase in July core CPI was jaw dropping," Jefferies (NYSE:JEF) said in a note. "It was the largest sequential jump since January 1991. While this momentum in pricing is unlikely to be sustained, the strength was broad-based and cannot be ignored."

But lingering worries remained that the recovery will come under threat if lawmakers are unable to resolve their differences and make progress on stimulus talks, which hit a stalemate.

House Speaker Nancy Pelosi said on Wednesday that Democrats and the Trump administration were "miles apart" on any agreement over additional fiscal stimulus.

The move higher in the broader market was sparked by a rally in the Fab 5 and chip stocks.

Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) the so-called Fab 5, which make up about 25% of S&P 500, were up more than 1% a piece.

Advanced Micro Devices (NASDAQ:AMD) jumped 7.4%, while NVIDIA (NASDAQ:NVDA) added 5.4% and Qualcomm (NASDAQ:QCOM) rose 6.4%.

Energy also chipped in with gains as oil prices advanced after government data showed weekly U.S. crude inventories fell by a more than expected 4.5 million barrels, easing investor concerns about fragile demand.

In health care, Moderna (NASDAQ:MRNA) rose 0.9% after securing a $1.5 billion contract from the Trump administration to provide 100 million doses of its coronavirus vaccine candidate, mRNA-127.

On the earnings front, Lemonade (NYSE:LMND) reported its maiden quarterly earnings report, but better-than-expected results were offset by guidance that fell short of Wall Street estimates, sending its shares down 3.3%.

In other news, Tesla (NASDAQ:TSLA) was up 13% after it declared a five-for-one stock split, effective Aug. 27. The move is aimed at lowering the price of Tesla stock to make it more affordable for retail investors.

Uber Technologies (NYSE:UBER) climbed 1% after its CEO Dara Khosrowshahi warned the ride-hailing company would have to shut down the Uber app temporarily should it fail to overturn a California judge's decision requiring it to classify Uber drivers as employees rather than independent contractors.

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