2024-01-18 23:42:16
US stocks rise for the first time in 4 days… and Dow Jones adds 202 points
Technology companies, led by Apple shares, returned to their rise following three days of decline, returning the major stock indices to the green zone, coinciding with the return of hopes of a rate cut early next year.
During Thursday’s trading, the high points represented 0.54%, and the S&P 500 index added 0.88%, approaching its highest levels ever once more, while the Nasdaq index, which is full of technology companies, jumped by 1.35%.
Today, Thursday, Atlanta Federal Reserve Bank President Rafael Bostic expected that monetary policy makers in the United States would begin reducing interest rates in the third quarter of this year, stressing that inflation is on its way to returning to the central bank’s target.
Apple shares rose by 3.26%, following Bank of America upgraded the stock to “buy,” expecting it to rise by more than 20% over the next 12 months. The technology giant witnessed its best day since May 5, 2023, contributing strongly to the rise of the fund specializing in the technology sector, XLK, by more than 2%, recording its highest levels ever.
Taiwan Semiconductor Manufacturing Company TSMC, the world’s largest chip maker, also rose by 9.8%, following it announced high profits and revenues in the fourth quarter of last year. This helped push the SMH chipmaker fund more than 3%, also reaching all-time highs.
Technology stocks received a boost today from the data announced by TSMC, which showed a lot of positivity regarding the future directions of semiconductors and artificial intelligence, removing the idea that companies in the sector are overvalued at their current prices.
“You can see the price action mirroring what was announced,” said Ross Mayfield, investment strategist at Baird.
“As the macro environment evolves this year, if there are still AI tailwinds, they will show up in the stocks that most benefit from AI applications and software,” Mayfield added.
Thursday’s rises were supported by strong business results, covering up the negative effects of the rise in US Treasury bond yields. The 10-year bond yield recorded 4.14% on Thursday, following unemployment claims data showed continued strength in the labor market.
The US Department of Labor said on Thursday that unemployment insurance claims for the first time amounted to 187,000 for the week ending January 13, a decrease of 16,000 from the previous period. That was stronger than economists’ consensus estimate of 208,000, according to figures compiled by the Dow Jones Index.
Investors are concerned that continued labor market strength, coupled with strong consumer spending, reflected in Wednesday’s retail sales report, will cause the Fed to favor smaller interest rate cuts than many expect.
Futures markets currently reflect a 56% chance of a quarter-point rate cut in March, according to CME Group’s Fed Tracker.
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