Overview:
The U.S. stock market saw strong gains on Thursday, September 26, 2024, with the S&P 500 and Dow Jones Industrial Average hitting record highs. The S&P 500 rose 0.40% to close at 5,745.37, while the Dow Jones climbed 0.62% to end at 42,175.11. The Nasdaq Composite also advanced, rising 0.60% to close at 18,190.29. Gains were fueled by positive economic data, including stronger-than-expected jobless claims and a revised GDP growth figure showing the economy grew at 3% in Q2.
Leading the rally were technology and semiconductor stocks, with Micron Technology soaring 15.78% after announcing strong quarterly results and better-than-expected revenue forecasts. The broader Philadelphia Semiconductor Index climbed 3.77% as chipmakers surged on optimism surrounding AI demand. Investors were also buoyed by news that China is increasing fiscal stimulus, which helped lift global metal prices and bolstered material stocks like Freeport-McMoRan and Albemarle.
Fear & Greed Index:
Greed – Investors are showing increased confidence as strong U.S. economic data and Chinese stimulus measures boost market sentiment.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.62% at 42,175.11 (Record high)
- S&P 500: +0.40% at 5,745.37 (Record high)
- Nasdaq Composite: +0.60% at 18,190.29
Sector Performance:
- Winners:
- Technology: Micron Technology rallied 15.78% after raising its revenue forecast, and Nvidia gained 3.9% on continued demand for AI chips.
- Materials: The sector added 1.97%, with Freeport-McMoRan rising 7.45% and Albemarle climbing 9.92% on higher metal prices and Chinese stimulus measures.
- Losers:
- Energy: Energy stocks lagged, falling 2% as crude oil prices slid following expectations of higher supply from OPEC. ExxonMobil and Chevron both posted losses.
Key Movers:
- Micron Technology (MU): Soared 15.78% after posting stronger-than-expected Q4 earnings and raising its revenue forecast for Q1 due to increased demand for memory chips used in AI applications.
- Freeport-McMoRan (FCX): Gained 7.45% as rising metal prices and China’s fiscal stimulus boosted the materials sector.
- Nvidia (NVDA): Rose 3.9% on continued optimism around AI-driven growth, helping the Philadelphia Semiconductor Index surge 3.77%.
- Southwest Airlines (LUV): Gained 5.42% after raising its third-quarter revenue forecast.
Economic Data:
- Jobless Claims: Weekly U.S. jobless claims fell more than expected, signaling a strong labor market. Initial claims dropped to 210,000, lower than the projected 220,000.
- GDP Growth: The final reading of U.S. GDP for Q2 came in at 3%, confirming strong economic growth during the quarter.
- Metal Prices: Copper and lithium prices surged following China’s pledge to increase fiscal spending. Copper miners like Freeport-McMoRan and lithium producers like Albemarle benefited significantly.
Outlook:
Investors are optimistic about the future as strong U.S. economic data continues to support growth, while China’s fiscal stimulus provides a positive backdrop for global markets. Technology stocks, especially those involved in AI and semiconductors, are likely to continue their strong performance. However, energy stocks may face headwinds as oil prices fall amid rising supply expectations from OPEC. Investors will closely monitor upcoming data releases, including inflation reports, to gauge the Federal Reserve’s next steps on monetary policy.