On Thursday, US markets surged ahead, inching closer to record highs, bolstered by encouraging economic indicators and strong earnings from key tech players. Investors reacted positively to healthy data surrounding the US economy, including an impressive GDP growth rate, alongside positive earnings from Micron Technology. The tech sector, particularly semiconductor stocks, saw a notable increase, reflecting heightened investor enthusiasm.
The Dow Jones Industrial Average rose by 0.4%, while the S&P 500 gained 0.3% following minor dips the day prior. The tech-heavy Nasdaq Composite showed resilience with a 0.3% increase, thanks largely to a significant upswing in Micron’s stock, which benefitted from robust demand for its memory chips essential for artificial intelligence data centers.
A triple surge of optimism surrounding advancements in artificial intelligence, reports of a solid US economic performance, and stimulus pledges from China has refreshed investor sentiment. Following Micron’s upbeat earnings call, prominent chip manufacturers like AMD, ASML, and STMicroelectronics, also saw their stocks rise in tandem, underscoring the sector’s robust health, driven by the surging demand for semiconductor components.
Meanwhile, shares of Super Micro Computer plunged over 13% during the trading day amid news that the DOJ is investigating allegations of accounting irregularities following a report from Hindenburg Research. This prompted increased scrutiny and volatility around its stock, which was temporarily halted.
In terms of economic data, the latest government reports indicated that the US economy experienced a higher-than-expected growth rate of 3% for the second quarter. Moreover, first-time jobless claims dropped unexpectedly to their lowest in four months, with 218,000 claims filed, well below forecasts. This positive news bodes well for ongoing economic recovery amidst shifting market conditions.
Additionally, China’s leadership has expressed intentions to stimulate its sluggish economy, promising increased fiscal spending and measures to stabilize the property market and support its stock trading environment. As a result, Chinese stocks surged, positioning the CSI 300 index on track for its best performance in ten years.
The anticipation for a Federal Reserve interest rate cut is also growing, with traders now assigning a 60% probability to a 0.5% decrease at the upcoming November meeting, a marked increase from the previous week. Investors await insights from Federal Reserve Chair Jerome Powell, whose comments are expected to guide market direction leading up to critical inflation data releases.
As the day progressed, the upbeat market sentiment was complemented by increases in oil prices, which tumbled over 3% as reports emerged regarding Saudi Arabia’s upcoming production policy that may inflate supply levels, aiming to regain its market share amidst rising US oil production.
Overall, the combination of strong economic indicators, positive corporate earnings, and international financial dynamics hints at a promising outlook for US markets, setting the stage for potential record highs in the near future.