U.S. stocks surged Thursday, with the Dow Jones Industrial Average and S&P 500 indexes setting another round of records and the Nasdaq finishing just shy of its first record close since 2021, after Nvidia Corp.’s blowout earnings unleashed a wave of optimism that drove global markets higher.
How stocks traded
-
The Dow
DJIA
rose 456.87 points, or 1.2%, to close at 39,069.11 — its 13th record finish of 2024 and its biggest one-day percentage gain since Dec. 13. -
The S&P 500
SPX
advanced 105.23 points, or 2.1%, ending at 5,087.03 — its 12th record close so far this year. -
The Nasdaq Composite
COMP
jumped 460.75 points, or 3%, finishing at 16,041.62. The index briefly traded above its record close of 16,057.44, set on Nov. 19, 2021.
Market drivers
Wall Street had seen timid trading at the start of the week, as many investors feared the equity rally which took the S&P 500 index to a record close of 5,029.73 last Friday was vulnerable should earnings from megacap AI darling Nvidia
NVDA,
disappoint.
They should have had more faith.
After the close on Wednesday, the chip maker delivered revenues, profits and forecasts that beat analysts’ already-elevated expectations.
“The whole market is having a strong day, essentially a relief rally after Nvidia didn’t disappoint, with growth and momentum names in the lead, while utilities, consumer staples and energy are in the red,” said Louis Navellier, founder of Navellier & Associates.
Shares of the chip maker rose more than 16%. Nvidia’s advance helped push the Nasdaq Composite to within striking distance of its first record close since November 2021.
The good news from Nvidia’s much-hyped earnings report sparked a global risk-on surge, which helped propel benchmark equity barometers in Japan and Europe to record levels.
“The impact of the Nvidia news has been worldwide. Semiconductor stocks from Japan to Europe rose, and in the U.S. everything that has the whiff of AI is rising,” Brad Conger, deputy chief investment officer at Hirtle, Callaghan & Co., told MarketWatch. “It’s clear there’s a silicon tailwind, with everything in the semiconductor supply chain gaining.”
See: Stocks can get more expensive, says strategist. Don’t get in front of FOMO for now.
U.S. economic updates on Thursday included the latest reading on weekly jobless claims, which fell to a five-week low at 201,000. S&P flash services and manufacturing PMIs for February showed the U.S. economy likely continued to expand at an above-average pace this month. Meanwhile, in January, existing-home sales rose more than 3% and climbed to their highest level since August as buyers seized on lower mortgage rates.
Fed Vice Chair Philip Jefferson said Thursday morning that he expects the central bank to begin cutting rates in 2024, but warned that if consumer spending fails to weaken then progress on inflation could stall.
Stocks maintained their gains after Philadelphia Fed President Patrick Harker said policymakers are close to cutting interest rates but cautioned that a move is unlikely “right now and right away.”
Companies in focus
-
Newmont Corp.
NEM,
-7.60%
saw shares slump after the miner announced plans to cut its dividend and sell off noncore assets. -
Shares of electric-vehicle maker Rivian Automotive Inc.
RIVN,
-25.60%
lost more than a quarter of their value after reporting a larger-than-expected quarterly loss and guidance that implies it will produce slightly fewer cars than in 2023. -
Moderna Corp.
MRNA,
+13.53%
shares jumped 13.5% after the company reported a surprise quarterly profit and sales that topped Wall Street’s expectations. -
Shares of Wayfair Inc.
W,
+10.78%
soared Thursday after the online home-furnishings retailer reported a narrower-than-expected fourth-quarter loss and said it returned to positive active-customer growth after two years of declines. -
Planet Fitness Inc.
PLNT,
-5.28%
shares declined after the company reported stronger-than-expected fourth-quarter results, but weak guidance. -
A number of stocks with exposure to the AI theme rose, including shares of Salesforce Inc.
CRM,
+3.56%
and ServiceNow Inc.
NOW,
+2.84% -
Companies that are part of the semiconductor supply chain also rallied, including shares of Applied Materials Inc.
AMAT,
+4.94%
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