3/8/2024

The Nasdaq closed 1.5% higher

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Key points:

  • The S&P 500 broke a record, rising 1% to close at 5,157.36.
  • The Nasdaq rose 1.5%, led by technology and growth stocks.
  • Investor optimism is associated with expectations of a rate cut by the Fed.

Thursday, March 7th was marked by strong growth on Wall Street. The S&P 500 broke a record, posting a 1% gain to close at 5,157.36. The Nasdaq also posted a 1.5% gain, with the biggest gains in technology and growth stocks. Investor optimism was driven by expectations of a rate cut by the Federal Reserve this year.

The semiconductor sector is particularly noteworthy. The Philadelphia Semiconductor Index outperformed the broader market, rising 3.36% to a record close. Investors have shown increased interest in chip companies, which are known to be key beneficiaries of artificial intelligence-related demand.

The Dow Jones Industrial Average also showed positive dynamics, adding 130.30 points (0.34%) to close at 38,791.35.

February macro data gave traders optimism

Fed Chairman Jerome Powell told a US Senate committee that the US central bank is close to confident that inflation will fall to its 2% target. This, he said, will make it possible to reduce rates. His comments strengthened investors’ hopes for the first rate cut in June. Stock indexes rose after the publication of Powell’s speech, reversing the decline observed several days earlier.

Labor Department data showed the number of Americans filing new claims for unemployment benefits remained unchanged. This indicates a continued weakening of the labor market. Other indicators such as private sector employment, vacancies, and layoffs also paint a softening picture in the labor market, which nonetheless remains resilient.

On Friday, traders expect the publication of the monthly nonfarm payrolls report, which will shed light on the dynamics of the US labor market.

The greatest success for shares of IT companies

The Nasdaq Composite Index hit a new intraday record high and fell just short of its closing record. It rose 241.83 points (or 1.51%) to close at 16,273.38.

Nine of the 11 major sectors of the S&P 500 index posted gains. The growth leaders were shares of information technology companies (+1.89%) and companies in the communications services sector (+1.84%). Growth-oriented mega-cap stocks were the main contributors to the index’s gains. These included social media company Meta (+3.2%) and stock market favorite Nvidia (+4.5%).

On the Nasdaq, advancing stocks outnumbered declining ones by about a 1.55-to-1 ratio. 2,592 rose and 1,670 fell. The S&P 500 posted 82 52-week highs and one new low, while the Nasdaq posted 331 new highs and 88 new lows.

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