NEW YORK: US stocks kicked off the holiday-shortened week on a positive note, as technology stocks extended their recent gains on renewed interest in AI-related companies, while investors awaited key economic data later this week.
A rally in tech stocks starting late last week, driven by Micron Technology’s blowout forecasts and a benign inflation report, has left the S&P 500 and Dow less than 1 percent away from their record closing peak on December 11.
Nvidia shares rose 1.4 percent. Reuters had reported the company has told Chinese clients it aims to start shipping its second-most powerful AI chips to China before the Lunar New Year holiday in mid-February.
Micron rose 1.8 percent, while other chipmakers also gained, with the Philadelphia SE Semiconductor Index up 1.2 percent.
“Despite bouts of volatility and concerns about the health of the AI trade, tech has led the market to the upside this year,” said Chris Larkin, managing director for trading and investing at E*TRADE from Morgan Stanley.
“If a Santa Claus rally does kick in this year, St. Nick’s gift bag will likely need to be full of positive tech sentiment.”
December has traditionally been a strong period for stock markets. Since 1950, the so-called Santa Claus rally has been reflected by the S&P 500 rising by an average of 1.3 percent over the last five trading days of the year and the first two trading days in January, according to the Stock Trader’s Almanac.
This year, that period starts Wednesday and runs through January 5.
Optimism around AI, signs of a resilient US economy and growing bets of monetary policy easing have overshadowed concerns about US tariffs, helping put the three main indexes on course for their third consecutive year of gains. The S&P 500 is up more than 15 percent so far this year.
By 11:40 a.m. ET, the Dow Jones Industrial Average rose 0.50 percent to 48,376.99. The S&P 500 was up 0.59 percent at 6,874.75 and the Nasdaq Composite added 0.57 percent at 23,439.28.
Ten of the 11 S&P sectors were trading higher, with materials and energy leading gains as commodity prices jumped. The information technology sector added 0.4 percent.
Wall Street’s fear gauge, the CBOE volatility index, hit its lowest level since September.
Trading volumes are expected to remain light this week, with US stock market closing at 1:00 p.m. ET on Wednesday and shut on Thursday for Christmas holiday.
However, key economic data, including the preliminary reading of third-quarter GDP, December consumer confidence data and weekly jobless claims, are scheduled for release this week, offering insights about the health of the US economy as well as hints about the monetary policy path.
Among other movers, Tesla jumped 2.4 percent to an all-time high after CEO Elon Musk’s 2018 pay package was restored by the Delaware Supreme Court.
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