In New York on Friday, U.S. stocks finished higher, propelling the S&P 500 and the Dow to unprecedented levels due to the surge in tech stocks and speculation that the Federal Reserve will decrease interest rates this year.
The Dow Jones Industrial Average increased by 395.19 points, or 1.05 percent, to 37,863.8, surpassing its previous record at the end of last year. The S&P 500 added 58.87 points, or 1.23 percent, to 4,839.81, surpassing the previous intraday record of 4,818.62 set in January 2022. The Nasdaq Composite Index rose by 255.32 points, or 1.70 percent, to 15,310.97.
Of the 11 primary S&P 500 sectors, nine ended in the green, with technology and financials leading the gainers by 2.35 percent and 1.64 percent, respectively. However, consumer staples and utilities dropped 0.33 percent and 0.12 percent, respectively.
The close of the benchmark confirmed that the S&P 500 has been in a bull market since it closed at its low on Oct. 12, 2022. Lisa Erickson, head of public markets at U.S. Bank Wealth Management in Minneapolis, said, “It really is an encouraging day in terms of the action, and 4,800 certainly has been a key level which has been difficult to surmount. So if we continue to move in this direction, that’s going to be a very positive sentiment sign.”
Qualcomm, Marvell Technology, Nvidia, and Microchip Technology, all chipmakers, experienced a boost after server maker Super Micro Computer increased its earnings forecast, leading to a surge in its own shares. The rally extended to tech giants like Microsoft and Apple, pushing both the Philadelphia SE Semiconductor index and the S&P 500 information technology sector index to new records.
According to the University of Michigan’s preliminary sentiment survey, consumer confidence rose to a 17-month high in January. The index surged to 78.8, lifted by positive economic data, suggesting a potentially strong year ahead for spending and growth.
On Friday morning, Chicago Federal Reserve President Austan Goolsbee said that the Fed could begin to reduce interest rates this year “if we continue to make surprising progress on inflation.”
“We don’t want to commit ourselves before the job is done,” he stated, “as inflation comes down, that opens the door to a reduction in restrictiveness.”
Interest rate traders now believe there is a 52 percent chance of a March rate cut, according to the CME Group’s FedWatch Tool.
