Stocks climbed Thursday and technology shares outperformed, adding to the previous session’s gains that led to new records on Wall Street.
The S&P 500 and Nasdaq Composite advanced 0.4% and 0.2%, respectively. The Dow Jones Industrial Average jumped 285 points, or 0.7%.
Micron Technology jumped 16% on strong earnings and headed for its best day since December 2011. The news lifted the semiconductor sector, with Nvidia and Intel added more than 1%, while Taiwan Semiconductor rose 2.5%. Marvell Technology and the VanEck Semiconductor ETF surged 3%. Broadcom surged 6%.
Megacap tech stocks that led the recent rally contributed to the session’s gains, with Meta Platforms, Microsoft and Amazon adding nearly 1%. Apple bucked the broader tech-driven uptrend, slumping 4% after the Justice Department filed an antitrust lawsuit against the iPhone maker. Social media company Reddit surged more than 40% above its initial public offering price in its market debut.
“People have faith in the Fed right now, and that cuts are coming,” said Jay Woods, chief global strategist at Freedom Capital Markets. “We are in a good place, and the market believes in the smooth landing narrative. Whatever the Fed is saying continues to be the music to the ears of the market.”
Thursday’s moves follow a winning day on Wall Street that sent the three major indexes to new closing highs, with the S&P 500 breaking above 5,200 for the first time.
Those gains came as the Federal Reserve reiterated expectations for three interest rate cuts this year and kept borrowing costs unchanged at the conclusion of its two-day policy meeting.
While the central bank failed to elaborate on the timing of cuts, Fed Chairman Jerome Powell said during a press conference Wednesday that he expects rates to ease as long as the inflation data continues to trend lower.
Despite the recent enthusiasm, Kayne Anderson Rudnick’s Julie Biel cautions that the market may be getting overexcited about the prospect of three cuts this year.
“We need to recognize that this isn’t like a slam dunk that we’re going to get three or four rate cuts,” the portfolio manager said. “There is enough dissent, and there still is a fair amount of spread beyond 2024 into 2025 of where rates are going to be.”
As of Thursday morning, traders are pricing in a nearly 70% chance that the Fed begins cutting rates in June, according to CME Group’s FedWatch tool.
Wall Street will monitor earnings reports from FedEx and Nike after the market close.
Correction: Fed Chair Jerome Powell spoke Wednesday. A previous version misstated the day of the week.
