3/13/2024

Oracle leads S&P 500 to high close

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Key points:

  • The S&P 500 hit a record high thanks to Oracle’s surge.
  • Boeing shares fell due to production restrictions.
  • ARM Holdings rose 2.1% before the post-IPO lock-up period expired.

On Tuesday, March 12, US stock markets showed significant growth. The S&P 500 index hit a record high at the close of the trading session, helped by a sharp rise in Oracle shares. The published data on consumer prices failed to shake the optimism of investors, who continue to expect interest rates to fall in the coming months.

The Dow Jones Industrial Average rose 235.74 points, or 0.61%, to 39,005.4. The S&P 500 added 57.3 points (1.12%) to close at 5,175.24. The Nasdaq Composite Index showed the most significant gains, rising 246.36 points (1.54%) to 16,265.64.

Oracle and Nvidia shares up

Oracle shares showed rapid growth of 11.7%, reaching a record value. This happened the day after the company published an optimistic quarterly report, as well as the announcement of a collaboration with artificial intelligence chip giant Nvidia. Nvidia shares also showed positive dynamics, adding 7.2%. The semiconductor index, in turn, rose 2.1%, breaking a two-day streak of declines.

At the same time, Boeing shares fell 4.3%. This follows the US Federal Aviation Administration’s decision to limit production of Boeing aircraft following a mid-air panel explosion on the new Alaska Airlines 737 MAX 9 aircraft on January 5th.

US statistical data didn’t reduce traders’ optimism

The US Department of Labor published data according to which the consumer price index (CPI) rose by 0.4% in February, demonstrating an acceleration compared to January’s 0.3%. When excluding volatile segments – food and energy – from the calculation, the core CPI also grew by 0.4% in February, coinciding with the January value.

The market reaction to these data was mixed. The CME FedWatch Tool, which tracks traders’ forecasts for the Fed’s actions, showed that the likelihood of a rate cut in June was estimated at 70%, down slightly from the 71% recorded before the release of the inflation report.

ARM Holdings shares resumed growth

Shares of British chip developer Arm Holdings, controlled by Softbank Group, rose 2.1% to $129.50. This comes ahead of an expected increase in trading activity following the expiration of the lock-up period associated with the initial public offering (IPO).

It is worth noting that since the IPO in September 2023, only 9.5% of Arm shares are available for trading. The limited volume of publicly traded shares may result in increased volatility.

Let us recall that in February 2023, after the publication of the quarterly report, Arm Holdings shares rose by 68%. This was driven primarily by increased demand for chip designs designed for artificial intelligence computing.

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