U.S. stocks ended sharply up on Thursday, with the S&P 500 approaching record highs as AI optimism drove gains in chipmakers. The 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 the 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 rose 1.6% and also notched a record high.
Other chipmakers such as Broadcom, Qualcomm, and Marvell Technology gained more than 3% each. The Philadelphia SE semiconductor index rallied 3.4% and approached its December 2023 record high.
Apple 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. 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 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.
Humana dropped 8% after the health insurer forecast fourth-quarter medical costs to be higher than previously expected. KeyCorp dropped 4.6% after the lender posted a decline in fourth-quarter profit, whileirkenstock sank about 8% after missing quarterly profit expectations. Spirit Airlines ended down more than 7% after news it is looking at options to refinance its debt and is not considering restructuring.
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.
In conclusion, U.S. stocks experienced significant gains on Thursday, with the S&P 500 approaching record highs due to the positive outlook on artificial intelligence (AI) and the resulting surge in chipmaker stocks. Taiwan Semiconductor Manufacturing (TSMC) saw substantial growth projections, with shares soaring nearly 10%. The rally was also fueled by other heavyweight chipmakers like Nvidia and Advanced Micro Devices reaching record highs. The S&P 500 ended the session at 4,780.94 points, just 0.3% below its record-high close in January 2022. Overall, the optimism around AI technology and its impact on the semiconductor industry drove the market’s positive performance.
