S&P 500 and Nasdaq hit record highs on Tech gains and inflation optimism


Note: Figures recorded at 7:40am AEDT. Updated figures and a video recording will be available at 9am AEDT.

Stocks rose Thursday, pushing the S&P 500 and Nasdaq Composite back to record highs, as hope over easing inflation and gains in tech aided Wall Street’s midweek bounce.

The broad S&P 500 advanced 0.7%%, while the tech-heavy Nasdaq Composite climbed 1.4%. Both more than erased losses that pulled the pair off record levels earlier in the week. The Dow Jones Industrial Average gained 77 points, or 0.2%.

Investor optimism was boosted after the European Central Bank lowered forecasts for annual inflation and growth on Thursday, though the bank also held key interest rates steady. That can be taken as a positive signal on the international inflation front.

The ECB’s announcement comes after Federal Reserve Chair Jerome Powell told Congress on Wednesday that he expects interest rates to come down this year. While Powell said that the Fed was not immediately ready to begin cutting, he told the Senate Banking Committee on Thursday that the central bank isn’t far from having the confidence it needs on inflation to start.

The Nasdaq was helped by a gain of more than 3% in Nvidia, the artificial intelligence darling whose shares have climbed more than 11% this week. Apple also rose in the session, on pace to snap a six-day losing streak.

Costco, Meta and Nvidia were among several stocks reaching new 52-week highs, alongside numerous S&P 500 companies, reflecting a broad market rally. Notable advancements were seen in AI-related companies like Nvidia, Micron, and NXP Semiconductors, as well as insurance giants Progressive and Prudential, signaling robust performance in various sectors.

Investors are awaiting Friday’s U.S. jobs report for insights into the state of the labor market, which has shown resilience despite higher interest rates.

Market analysts express concerns over the overbought condition of US equities, anticipating a significant pullback possibly beginning in March, with attention drawn to the potential impact of the upcoming employment report. Seema Shah highlights the risk of too resilient economic growth in 2024, warning of inflationary pressures and the potential for central banks to raise rates, which could lead to a hard landing in 2025, favoring a scenario of gently decelerating growth and Federal Reserve rate cuts for investors in 2024.

Figures around the globe

European markets closed higher. London’s FTSE added 0.17 per cent, Frankfurt gained 0.71 per cent, and Paris closed 0.77 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 1.23 per cent, Hong Kong’s Hang Seng lost 1.27 per cent and China’s Shanghai Composite lost 0.41 per cent..

Yesterday, the Australian share market closed 0.39 per cent higher at 7,763.71.

Ex-dividends
Copper Strike Ltd (ASX:CSE) is paying 0.6 cents fully franked
Finexia Financial Group (ASX:FNX) is paying 0.5 cents fully franked
Insignia Financial (ASX:IFL) is paying 9.3 cents unfranked
Meridian Energy (ASX:MEZ) is paying 5.6172 cents unfranked
Nine Entertainment (ASX:NEC) is paying 4 cents fully franked
Summerset Grp Hldgs (ASX:SNZ) is paying 10.5879 cents unfranked
US Masters Res Fund (ASX:URF) is paying 1 cent unfranked
Wisetech Global Ltd (ASX:WTC) is paying 7.7 cents fully franked

Dividends payable
GUD Holdings Ltd (ASX:GUD)
JB Hi Fi Ltd (ASX:JBH)
Whitehaven Coal Ltd (ASX:WHC)
Microequities Asset Management Group Ltd (ASX:MAM)


Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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