S&P 500 hits all-time high on the momentum of chipmakers and AI optimism
The S&P 500 index reached its first all-time high in two years on Friday, driven by the momentum of chip manufacturers and major technology stocks. Investor optimism about the prospects of artificial intelligence (AI) and speculation about a potential rate cut by the Federal Reserve have fueled the rally on Wall Street.
The benchmark index surpassed 4,800 points, defying warnings that the current rally remains concentrated in a smaller group of stocks. Falling Treasury volatility and a report showing high consumer confidence and lower inflation expectations also bolstered investor sentiment, leading to a surge in stock prices.
The S&P 500 rose 1.2% on Friday, erasing losses from earlier in the week. The Nasdaq 100, which has a strong technological component, also saw gains, with chipmakers such as Advanced Micro Devices and Nvidia leading the rally. Shares of Nvidia rose 4.2%, while Advanced Micro Devices saw a more than 7% increase after a positive revenue forecast from server maker Super Micro Computer.
Microsoft and Apple, the two most valuable companies in the world, also recorded gains of over 1%.
The bullish sentiment in the market has been supported by a positive outlook for high-end chips used in AI, as indicated by Taiwan Semiconductor Manufacturing Company, the worldās largest contract chipmaker.
The yield on 10-year Treasury bonds remained relatively unchanged, while the dollar weakened against a basket of benchmark currencies.
It has been a remarkable turnaround for the S&P 500, which has risen nearly 35% since hitting lows in October 2022. The index surpassed its previous closing high of 4,796.56 points, marking a remarkable recovery from its previous lows.
Overall, the optimism in the market suggests that investors are betting on sustained growth and economic stability, despite previous concerns about a potential recession.
The S&P 500ās record high also comes after a year of consistent gains following new highs, with an average rise of 13%.
For more news on Economy and Business, follow us on Facebook and Twitter.
The Five Day Agenda:
Stay informed with the most important economic quotes of the day, accompanied by key insights and context to understand their significance. Receive it in your mail.