Wall Street books record peak on rate-cut optimism
Wall Street bulls charge ahead as all major indexes hit record highs following the U.S. Federal Reserve's reassurance on potential rate cuts, with chip stocks rallying after Micron Technology's upbeat forecast.
According to a survey of policymakers, the median still anticipates three interest rate cuts in 2024, with the possibility of the first cut by June.
After Wednesday's policy meeting, Fed Chair Jerome Powell stated that inflation reports haven't significantly altered the overall narrative, which involves inflation gradually declining on a sometimes-uneven path toward 2%.
The Federal Reserve maintained its benchmark interest rates within the range of 5.25% to 5.50%, with the next Fed meeting scheduled for April 30-May 1.
At the close of trading on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average surged by +269.24 points, or +0.68%, reaching 39,781.37, bringing it to within less than 1% of the 40,000 mark for the first time.
The broad-based Standard & Poor's 500 Index gained +16.91 points, or +0.32%, to 5,241.53, while the tech-heavy Nasdaq Composite Index climbed +32.43 points, or +0.20%, to 16,401.84.
Nine of the 11 major S&P 500 industry sectors recorded gains, with industrials leading the pack, finishing by 1%. The utilities sector was the weakest performer, ending down by 0.2%, followed by a 0.17% decline in communications services.
Shares in Micron Technology soared over +14% to hit an all-time high following a surprise quarterly profit and a third-quarter revenue forecast above estimates.
Nvidia received a boost, adding over +1%; Broadcom also experienced gains, up +5.6%, after TD Cowen upgraded its stock rating to "outperform", while the Philadelphia Semiconductor index rallied by +2.3%.
However, Apple deviated from the market trend, closing down 4.1% after the U.S. Department of Justice filed an antitrust lawsuit against the tech giant, alleging monopolistic behaviour in smartphone markets.
Shares in IT services provider Accenture plummeted by +9% after the company reduced its fiscal-year 2024 revenue forecast due to economic uncertainty, leading clients to cut consulting services spending.
In after-hours trading, FedEx shares surged -13% after the shipping company posted adjusted earnings that beat analysts' estimates despite missing on revenue. Conversely, Lululemon slid -10% following weak guidance attributed to slowing growth in North America.
Earlier Thursday, released economic data added to investors' bullish mood as U.S. jobless claims unexpectedly dropped by 2,000 to 210,000 last week, while February's existing home sales surged, indicating a robust first-quarter economy.
In the U.S. government bond markets, the yield on the 10-year Treasury, which affects rates for mortgages and other major loans, closed at 4.26%.
The two-year yield, sensitive to Fed policy expectations, rose on Thursday after positive U.S. data signalled a strong improvement in business activity. It closed at 4.63%, marking the seventh time it had finished higher in the past nine trading days.
Bitcoin and other cryptocurrencies experienced slight decreases on Thursday, with the largest cryptocurrency by market cap trading within an intraday range of US$64,616.00 to US$68,161.00 before closing at US$65,938.00.
Similarly, Ethereum, the second-largest blockchain by cryptocurrency market capitalization, traded within a daily range of US$3,412.00 to US$3,587.32 before closing at US$3,514.00.
Precious metals were weaker, with spot gold closing at $2,180.00 per ounce and silver at $24.78.
Energy market prices softened, with the global benchmark Brent crude oil at $85.60 per barrel, while the U.S. benchmark West Texas Intermediate settled at $80.70.
The U.S. Dollar Index (U.S. DXY), gauging the greenback's strength against six major foreign currencies in the forex market, rebounded, rising from 103.17 to 103.94 before settling at that level in New York.
Meanwhile, the Eurodollar was 1.0866, and the British pound was 1.2672. The Japanese yen ended at 151.40, while the Australian dollar was 0.6574.
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