Written by Echo Wang
(Reuters) – The Dow and Nasdaq rose to record highs on Thursday, as shares of Micron Technology (NASDAQ: ) rose and strong U.S. jobless claims eased labor market concerns.
Shares of Micron Technology rose 15.78% after the memory chip maker reported better-than-expected first-quarter revenue, highlighting strong demand for memory chips used in artificial intelligence computing.
The broader added 3.77% as many chip stocks rallied.
A string of strong US economic data eased concerns that the Federal Reserve may cut rates aggressively to stem any further declines.
Weekly jobless claims fell more than expected, indicating a stable labor market, while the latest reading of gross domestic product confirmed that the economy grew by 3% in the second quarter.
“This (GDP number) reinforces the strong economic growth we’ve been seeing,” said Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina.
The benchmark S&P 500 closed up 23.11 points, or 0.40%, at 5,745.37, after hitting a record high of 5,767.37.
The blue-chip rose 260.36 points, or 0.62%, to 42,175.11. It advanced 108.09 points, or 0.60%, to 18,190.29.
Seven of the 11 sectors of the S&P 500 rose, led by construction materials, which rose 1.97%.
The S&P 500 and Dow have hit multiple records this year, while the tech-heavy Nasdaq is about 2% shy of its all-time high. Market rallies are driven by optimism surrounding AI and low interest rate expectations.
Steel prices rose after China promised to spend “necessary spending.” miners such as Freeport-McMoRan (NYSE: ) gained 7.45%, while lithium miners incl. Albemarle (NYSE:) and Arcadium added 9.92%.
“The issue affecting the market is entirely related to the stimulus of the Chinese and the announcement of support that the government is willing to provide just to help increase the health of consumers there (and) reduce housing pressures,” said Dickson.
However, energy stocks lost 2%, tracking lower crude prices on expectations of greater supply by the Organization of the Petroleum Exporting Countries. [O/R]
The index tracking small caps outperformed the broader market with a gain of 0.62%.
Late Wednesday, Fed Governor Adriana Kugler said she “strongly supports” the central bank’s decision to loosen monetary policy last week.
Investors have been swinging between 25 to 50 basis point cuts since the Fed began its easing cycle, with bets favoring a bigger cut now, up from 38.8% last week, CME Group’s (NASDAQ: ) FedWatch Tool showed.
US-listed Chinese companies such as Li Auto (O:) gained 7.13%, PDD Holdings (O:) advanced 13.28%, while Alibaba (N:) increased by 10.08%.
Shares of Wells Fargo gained 5.19% after a report indicated that the banking giant has sent the Fed an update on lifting asset limits.
Southwest Airlines (NYSE: ) gained 5.42% after the carrier raised its third-quarter revenue forecast, while Accenture (NYSE: ) rose 5.57% after the IT services provider forecast annual revenue above of measurements.
Advancing issues outnumbered decliners by a 1.94-to-1 ratio on the NYSE. There were 626 new highs and 71 new gains on the NYSE.
The S&P 500 posted 50 new 52-week highs and two new lows while the Nasdaq Composite recorded 95 new highs and 94 new lows.
US exchange volume was 12.46 billion shares, compared to the 11.82 billion average for the full session over the last 20 days.
