Wall Street Closes Higher on Strong US Economic Data, According to Reuters

By Echo Wang

(Reuters) – The market achieved a record closing high, with the Dow and Nasdaq also making gains on Thursday, spurred by a significant rise in Micron Technology shares and a positive U.S. jobless claims report that alleviated concerns regarding the labor market.

Micron Technology’s shares surged by 15.78% after the company projected first-quarter revenue that exceeded expectations, underscoring strong demand for memory chips essential for artificial intelligence applications.

The broader market index increased by 3.77%, as most semiconductor stocks saw substantial rallies. A series of encouraging U.S. economic indicators helped assuage fears that the Federal Reserve might implement aggressive rate cuts to counter any potential slowdown.

Weekly jobless claims were reported to have fallen more than expected, indicating a stable labor market, while the latest gross domestic product reading confirmed a 3% growth for the economy in the second quarter.

“The GDP number reinforces the robust economic growth backdrop we have been witnessing,” commented Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina.

The benchmark S&P 500 climbed 23.11 points, or 0.40%, closing at 5,745.37 after reaching an intraday high of 5,767.37. The blue-chip index rose 260.36 points, or 0.62%, finishing at 42,175.11, and the tech-heavy index increased by 108.09 points, or 0.60%, to close at 18,190.29.

Out of the 11 S&P 500 sectors, seven experienced gains, with materials leading the charge with a 1.97% increase.

Both the S&P 500 and Dow have achieved multiple record highs this year, while the Nasdaq is currently about 2% away from its own record. Market optimism has been fueled by excitement surrounding AI and expectations for lower interest rates.

Metal prices received a boost following China’s pledge to implement necessary fiscal spending. Mining companies, such as Freeport-McMoRan, gained 7.45%, while lithium miners like Albemarle and Arcadium saw increases of 9.92%.

“The driving narrative behind the market is undoubtedly the Chinese stimulus and the government’s commitment to boosting consumer health and alleviating real estate pressures,” added Dickson.

In contrast, energy stocks fell by 2%, tracking a decline in crude prices amid expectations of increased supply from the Organization of the Petroleum Exporting Countries.

The small-cap index outperformed the broader market, recording a 0.62% gain.

Late on Wednesday, Fed Governor Adriana Kugler expressed strong support for the central bank’s recent decision to begin easing monetary policy. Investors are now weighing between a 25- and 50-basis point cut, with a greater preference for a larger cut emerging, which rose from 38.8% a week prior, according to market analysis.

U.S.-listed Chinese firms saw significant gains, with Li Auto up 7.13%, PDD Holdings rising 13.28%, and Alibaba increasing by 10.08%.

Wells Fargo shares rose 5.19% following a report indicating that the banking giant had submitted a review to the Fed regarding the lifting of asset cap restrictions. Southwest Airlines gained 5.42% after it raised its revenue forecast for the third quarter, while Accenture’s shares climbed 5.57% after the IT services provider projected annual revenue above estimates.

Advancing issues outpaced decliners on the NYSE with a ratio of 1.94-to-1, resulting in 626 new highs and 71 new lows on the exchange.

The S&P 500 recorded 50 new 52-week highs and two new lows, while the Nasdaq Composite saw 95 new highs and 94 new lows. Trading volume on U.S. exchanges reached 12.46 billion shares, surpassing the 11.82 billion average over the past 20 trading days.