The S&P 500 closed above 5,000 for the first time on Friday and the NASDAQ briefly traded above 16,000, with boosts from megacaps and chip stocks, including Nvidia Corp as investors bet on artificial intelligence (AI) technology and eyed strong earnings data.
Nvidia finished up 3.6 percent and hit a record high after Reuters reported it was building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced AI processors.
This was after the Wall Street Journal reported on Thursday that OpenAI chief executive officer Sam Altman was in talks with investors to raise funds for a tech initiative intended to boost chip-building capacity for power AI, among other things.
Photo: Bloomberg
“The AI story so far has been all about building the infrastructure, the chips, the data centers,” said David Lefkowitz, head of US equities at UBS Global Wealth Management, adding that the report “at least underscores that there’s potentially a tremendous amount of demand going forward for AI infrastructure.”
While Lefkowitz said the S&P and NASDAQ’s round number milestones likely would not change investors’ calculations of the market’s risk and reward prospects, he said “it raises the profile of what’s happening in the market.”
Along with outperformance by the Philadelphia semiconductor index, which closed up 1.99 percent, technology-focused market heavyweights including Microsoft Corp, Amazon.com Inc and Alphabet Inc also contributed to index gains.
With results from about two-thirds of S&P 500 companies, LSEG data now show Wall Street estimates for fourth-quarter earnings growth of 9.0 percent versus expectations for 4.7 percent growth on Jan. 1, while 81 percent of companies are beating estimates, compared with a 76 percent average in the previous four reporting periods.
“Earnings have been strong so far, above expectations,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “And there was news about additional growth opportunities for Nvidia specific to cloud computing, another growth area besides AI. Those are the big drivers.”
The Dow Jones Industrial Average fell 54.64 points, or 0.14 percent, to 38,671.69, the S&P 500 gained 28.70 points, or 0.57 percent, to 5,026.61 and the NASDAQ Composite gained 196.95 points, or 1.25 percent, to 15,990.66.
Positive earnings and the boost from AI optimism have helped the S&P 500 to notch 10 intraday record highs so far this year.
The NASDAQ closed just 0.4 percent below its 16,057.44 record closing high registered in November 2021.
For the week, all three indices registered their fifth straight weekly gain with the S&P adding 1.4 percent, the NASDAQ rising 2.3 percent and the Dow climbing 0.04 percent.
Earlier, data showed US monthly consumer prices rose less than initially estimated in December last year, but underlying inflation remained a tad warm — a mixed picture that clouded expectations on the timing of interest-rate cuts from the US Federal Reserve.
Strong economic data and hawkish comments from Fed policymakers in recent days have dashed hopes the central bank would start cutting interest rates next month.
Ghriskey points to Fed official predictions in the “dot-plot,” which still imply a rate cut this year.
“The market does have the Fed’s wind at its back. Seemingly we’ve reached the top of interest rates. The next move is going to down. We don’t know when that’s going to be. The Fed keeps throwing cold water on that idea but their votes with the dots say they’re going to be easing in the second half,” Ghriskey said.
Market participants are awaiting data on last month’s consumer prices next week for more clues on when the Fed will cut borrowing costs.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
India’s ban of online money-based games could drive addicts to unregulated apps and offshore platforms that pose new financial and social risks, fantasy-sports gaming experts say. Indian Prime Minister Narendra Modi’s government banned real-money online games late last month, citing financial losses and addiction, leading to a shutdown of many apps offering paid fantasy cricket, rummy and poker games. “Many will move to offshore platforms, because of the addictive nature — they will find alternate means to get that dopamine hit,” said Viren Hemrajani, a Mumbai-based fantasy cricket analyst. “It [also] leads to fraud and scams, because everything is now
RSS