NEW YORK: Wall Street’s main stock indexes touched record highs on Thursday as chip stocks rallied following Micron Technology’s upbeat forecast, while investors took comfort in the Federal Reserve sticking to its three-rate-cut view for this year.
Chipmaker Micron Technology jumped 14.9%, briefly hitting an all-time high, after posting a surprise quarterly profit and forecasting third-quarter revenue above estimates.
Peers such as Intel and Nvidia added 2.3% and 1.8%, respectively, while the Philadelphia Semiconductor index advanced 3.6%.
Broadcom gained 9.2% as TD Cowen upgraded its rating to “outperform”.
US stock indexes had closed higher on Wednesday after US central bankers kept borrowing costs unchanged and indicated they still expect to ease interest rates by three-quarters of a percentage point by the end of 2024.
“This market is hungry and is salivating for information that’s going to continue to drive its rally and those two primary areas from my view are the Fed and potential rate cuts, and AI,” said Andre Bakhos, president at Ingenium Analytics.
Inflation reports “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road to 2%,” Fed Chair Jerome Powell said in a press conference after the policy meeting.
The CME FedWatch tool showed the market is now pricing in a 70% chance of a Fed rate cut in June, compared with around 56% estimated at the beginning of the week.
UBS Global Research said that it now expects the first cut in June, compared with its prior forecast of a cut in May.
Meanwhile, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth remained strong in March.
A separate reading showed flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, came in at 52.2 this month versus 52.5 in February.
At 11:36 a.m. ET, the Dow Jones Industrial Average was up 330.57 points, or 0.84%, at 39,842.70, the S&P 500 was up 32.51 points, or 0.62%, at 5,257.13, and the Nasdaq Composite was up 106.60 points, or 0.65%, at 16,476.01.
The three major indexes hit fresh intra-day record highs, with the Dow just 0.4% from hitting 40,000 points for the first time.
All 11 major S&P 500 sectors also rose, with industrials leading gains, up 0.9%.
Most rate-sensitive megacap growth and technology stocks advanced.
Apple, however, bucked the trend and eased 3.3% after the US Department of Justice sued the iPhone maker, the first major antitrust effort against the company by the Biden administration, alleging it monopolized smartphone markets.
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