Traders work on the floor of the New York Stock Exchange (NYSE).
By Noel Randwich and Ankika Biswas
The New York Stock Exchange ended sharply higher on Thursday, driven by investor enthusiasm about artificial intelligence that contributed to gains for Nvidia and other semiconductor makers, despite interest rate uncertainty weighing on the real estate sector in particular.
The Dow Jones index rose 0.54% to 37,468.61 points.
The broader S&P-500 rose 0.88% to 4,780.94 points.
The Nasdaq Composite rose 1.35% to 15,055.65 points.
Wall Street has experienced an ups and downs start to the year amid low optimism about the pace at which the US Federal Reserve (Fed) will begin cutting rates.
Major indexes ended in the red on Tuesday and Wednesday, while data showing strong retail sales and comments from Fed officials dimmed hopes of an imminent change in monetary policy.
The S&P-500 resumed its climb on Thursday, coming within 0.3% of its January 2022 closing record.
Data released today showed that weekly jobless claims in the United States fell to their lowest level since the end of 2022, suggesting solid employment growth earlier in the year.
Jack Dollarhyde, managing director at Longbow Asset Management, said that while “people are starting to wonder” when the Fed’s first rate cut will come, they “assumed” the US central bank would cut its rates starting in March.
However, he added, artificial intelligence (AI) is fueling “disruptive” growth in the market, which, according to him, “isn’t going to stop anytime soon”.
The head of the Atlanta Fed, Rafael Bostic, said he was prepared to cut rates sooner than previously thought if inflation fell faster than expected in the coming months. He has said in the past that the first rate cut in the second half of 2024 would be appropriate.
Expected by traders at 80% a month ago, the probability of a first rate cut in March is now estimated at 56%, according to FedWatch data.
In key sectors of the S&P-500, particularly sensitive to interest rates, such as real estate (-0.6%) and utilities (-1.05%), the session ended in the red.
Taiwan Semiconductor Manufacturing ( TSMC ) jumped nearly 10% after forecasting revenue growth of more than 20% in 2024, amid rising demand for cutting-edge chips used for AI services.
In TSMC’s wake, Nvidia surged 1.9% to a record, unprecedented trading volume – nearly $28 billion worth of shares. Its rival Advanced Micro Devices, too, was on top, up 1.6%.
Apple rose 3.3% after BofA Global Research recommended the company a “buy.” This pushed communication services to an all-time high.
(French version Jean Terzian)
