NEW YORK: Wall Street’s main indexes hit intraday record highs on Thursday, a day after the US central bank delivered a quarter-point interest rate cut, while chipmaker Intel climbed after Nvidia decided to build a stake in the company.
Intel jumped 29 percent and was set for its biggest one-day gain since October 1987 after Nvidia said it would invest USD5 billion in the struggling US chipmaker. Peer Advanced Micro Devices slipped 3.1 percent.
Nvidia gained 3.4 percent, bouncing back from losses on Wednesday, when a report said Chinese tech firms might stop buying its chips.
Most semiconductor stocks such as Applied Materials , Lam Research and Micron Tech advanced between 4.5 percent and 7 percent, boosting a broader semiconductor index to a record high.
The gains lifted the tech-heavy Nasdaq and the S&P 500 technology sector, up 1.6 percent. Three out of the 11 S&P 500 sectors were trading at all-time highs.
The small-cap Russell 2000 index gained 1.7 percent and was on track for a record close, as these companies are likely to perform better in a low interest-rate environment.
Federal Reserve Chair Jerome Powell emphasized that the softening jobs market was a priority for the Fed after it delivered a highly expected 25 basis point cut on Wednesday and indicated more reductions could follow at upcoming meetings.
Investors are pricing in about 43.3 basis points in cuts by end-2025, data compiled by LSEG showed.
“We only had one dissent ... there’s more unity and discipline at the Fed, that strengthens its independence and is a very positive thing long-term for markets,” said David Kelly, chief global strategist at J.P. Morgan Asset Management.
At 11:37 a.m. ET, the Dow Jones Industrial Average rose 163.03 points, or 0.35 percent, to 46,181.35, the S&P 500 gained 44.35 points, or 0.67 percent, to 6,644.70 and the Nasdaq Composite gained 250.05 points, or 1.12 percent, to 22,511.38.
Conversely, the S&P 500 energy and consumer staples were the biggest decliners, down 0.4 percent and 0.5 percent respectively.
Data showed that the number of Americans filing new applications for unemployment benefits fell last week, but the labor market has softened as both demand for and supply of workers have diminished.
“The economy is slowing but it is slowing slowly and so there isn’t any sign of imminent recession ... the real issue with markets today is just how much good news is priced in,” said Kelly.
The rate cut is expected to add to Wall Street’s recent rally, boosted by monetary policy easing hopes and a revival of AI-linked stock trading.
The three indexes have gained so far in September - a month deemed bad for US equities historically - where the S&P 500 has shed 1.4 percent on average since 2000, data compiled by LSEG showed.
Among stocks, CrowdStrike gained 10 percent after at least nine brokerages raised their price target on the stock.
Nucor slipped 4.4 percent after the steel company said it expected third-quarter profit to decrease across all its three operating segments.