Wall Street's three major stock indexes closed at record highs for the second day in a row on Thursday as the Federal Reserve reassured investors about rate reduction this year and semiconductor companies rose after Micron Technology's optimistic prediction.
Thursday's three major indices also set intra-day record highs, and the Dow closed within 1% of 40,000 for the first time. After a surprising quarterly profit and an above-expected third-quarter revenue forecast, Micron Technology (MU.O) shares rose more than 14% to an all-time high. Broadcom (AVGO.O) rose 5.6% after TD Cowen upgraded it to "outperform". Nvidia (NVDA.O) shares rose more than 1%, while the Philadelphia Semiconductor index (.SOX) rose 2.3%.
After U.S. central bankers held borrowing costs steady and said they expect to lower interest rates by three-quarters of a percentage point by 2024, stock indices closed at record high on Wednesday. "Semiconductors are leading the market after earnings, but the dovish Fed on Wednesday has sparked risk on," said John Hancock Investment Management Co-Chief Investment Strategist Matthew Miskin.
After Wednesday's policy meeting, Fed Chair Jerome Powell told reporters that inflation readings "haven't really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road to 2%." However, John Hancock's Miskin questioned the Fed's inflation and rate cut optimism.
"They're letting inflation risk back in. That risk could arise later this year, he warned. Economic data released earlier Thursday boosted investors' optimism. The number of Americans filing new unemployment claims unexpectedly declined last week, while February home sales rose to a year-high, indicating a strong first quarter economy. "This economy continues to defy expectations and markets are loving every minute of it," he said.
The Dow Jones Industrial Average (.DJI) rose 269.24 points, or 0.68%, to 39,781.37, the S&P 500 (.SPX) jumped 16.91 points, or 0.32%, to 5,241.53, and the Nasdaq Composite (.IXIC) increased 32.43 points, or 0.20%, to 16,401.84. Nine of 11 key S&P 500 industry sectors rose, led by industrials (.SPLRCI), opens new tab, which rose 1%. The poorest sector was utilities (.SPLRCU), down 0.2%, followed by communications services (.SPLRCL), down 0.17%, which was dragged down by Alphabet (GOOGL.O), down 0.8%.
Accenture fell 9% after cutting its fiscal-year 2024 revenue projection due to economic uncertainties, causing clients to curtail consulting services spending. After debuting on the New York Stock Exchange at $47, 38% over its $34 initial public offer price, Reddit shares finished at $50.44. On NYSE, advancing issues outpaced decliners 2.34-to-1 with 918 new highs and 56 new lows.
1,776 Nasdaq Composite stocks climbed and 1,400 fell as advance issues outpaced decliners 1.27-to-1. The S&P 500 had 116 new 52-week highs and one low, while the Nasdaq had 365 and 59. U.S. exchanges traded 11.43 billion shares, compared to the 20-session average of 12.39 billion.
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