NEW YORK (`) — Jumps in Big Tech on Thursday helped U.S. stock indexes claw back much of their decline from the previous day.
The S&P 500 rose 38.42 points, or 0.7%, to 5,199.06, recouping most of its previous loss caused by worries that interest rates could remain high for a while. The Nasdaq Composite rose 271.84, or 1.7%, to a record 16,442.20. The Dow Jones Industrial Average, which relies less on technology, was the laggard. It fell 2.43 points, or less than 0.1%, to 38,459.08.
Apple was the biggest force driving the market higher, climbing 4.3%, narrowing its loss for the year so far. Nvidia was close behind as the company continues to rely on artificial intelligence technology. The chip company rose 4.1%, increasing its annual profit to 83%. Amazon rose 1.7% to set a record after surpassing its previous peak in 2021.
It's a return to last year's form, when a handful of Big Tech stocks accounted for the bulk of the market's gains. This year the profits were distributed. Until worries about persistently high inflation shook the financial markets.
In the bond market, which has driven much of Wall Street's action, Treasury yields remained relatively stable after a year mixed batch of data on inflation and the USA Business.
When or if the Federal Reserve will do this implement the interest rate cuts The question traders crave has been one of the main questions dominating Wall Street. After the start of the annual forecast at least six cuts When it comes to interest rates, traders have now drastically reduced their expectations. A thread of hotter – as – expected -Reports on inflation and the Business has sparked fears that progress on inflation has stalled over the past year. Many traders currently expect only two cuts in 2024, with some discussing the possibility of zero.
A report Thursday morning showed that inflation at the wholesale level was slightly lower last month than economists expected. That's encouraging, but the data also showed that underlying inflation trends were closer to or just above forecasts. Those figures exclude the impact of fuel prices and some other prices that are known to fluctuate widely, and economists say they can give a better idea of where inflation is headed.
The update doesn't offset Wednesday's disappointingly high U.S. consumer inflation report, “but it could calm investors' nerves, at least in the short term,” said Chris Larkin, managing director of trading and investing at E-Trade Morgan Stanley.
A separate report said fewer U.S. workers filed for unemployment benefits last week. It's the latest signal that the job market remains remarkably solid despite high interest rates.
The Federal Reserve has kept its key interest rate at its highest level since 2001, hoping to depress the economy and investment prices enough to control high inflation. There are fears that keeping interest rates too high for too long could trigger a recession due to stubbornly high inflation.
Some investors are now warning that Fed rate cuts could be seen as more of a warning signal than anything else, and could only be implemented if the economy and labor market weaken enough to require additional stimulus.
All of this comes at a time when critics were already calling the U.S. stock market too expensive after rising more than 20% since Halloween. For stock prices to look more reasonable without requiring sharp declines, either interest rates would have to fall or corporate profits would have to rise.
Earnings reporting season has just begun as companies tell investors how much they made in the first three months of the year.
Rent the Runway more than doubled after reporting slightly better-than-expected sales for its most recent quarter. The company, which allows customers to rent designer clothes, also said it expects to break even on a cash flow basis in the coming financial year. The stock rose 161.9%.
Alpine Immune Sciences rose 36.9% after Vertex Pharmaceuticals agreed to buy the biotechnology company for $4.9 billion in cash. Vertex gained 0.7%
CarMax posted one of the biggest losses in the S&P 500 after reporting weaker profit than analysts expected for its latest quarter. Higher auto loan interest rates are making business more difficult, along with stricter lending standards and low consumer confidence. The stock slipped 9.2%.
In the bond market, the 10-year Treasury yield rose to 4.57% from 4.55% late Wednesday. The two-year yield, more in line with expectations for Fed action, fell to 4.94% from 4.97%.
According to the European Central Bank, the indices on the stock markets abroad fell slightly across Europe kept its key interest rate stable.
Stocks were mixed in Asia, where South Korea's Kospi rose 0.1% after the ruling Conservative party suffered a loss crushing defeat in a parliamentary election.
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` business reporters Matt Ott and Elaine Kurtenbach contributed.
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