In a bid to recover from recent losses, US stocks tipped higher on Thursday, with investors turning their attention to upcoming quarterly earnings as hopes for an early 2024 interest rate cut continued to wane.
The S&P 500 (^GSPC) exhibited a modest gain of approximately 0.4%, while the Nasdaq Composite (^IXIC), driven by the technology sector, took the lead with a substantial 1% increase. In contrast, the Dow Jones Industrial Average (^DJI) experienced a slight dip of around 0.3%.
Tech stocks played a pivotal role in driving the market upwards, fueled by a positive revenue outlook from Taiwan Semiconductor Manufacturing Company (TSMC), a crucial supplier for industry giants Apple (AAPL) and Nvidia (NVDA). TSMC, a Taiwanese contract chipmaker, reported a decline in profit; however, it surpassed Wall Street estimates. This news prompted a nearly 7% surge in shares for Advanced Micro Devices (AMD) and other chipmakers.
Despite these positive movements, stocks have struggled to gain momentum in the early part of the year. Central bankers’ remarks and mixed economic data have tested investors’ confidence in the Federal Reserve’s anticipated pivot. The likelihood of a rate cut in March, as perceived by traders, has seen a decline of 10 percentage points over the past week, according to the CME FedWatch Tool.
Investors are eagerly anticipating fresh data to shape their expectations. The release of weekly jobless claims readings on Thursday will be a key focal point, providing insights into the labor market. Additionally, attention will be on housing starts and building permits data for December.
Atlanta Fed President Raphael Bostic is slated to make two appearances today, closely monitored for any departure from his colleagues’ resistance to rate-cut speculations. His insights could offer valuable clues about the direction the Federal Reserve might take in the coming months.
In conclusion, the remarkable surge in US stocks, propelled higher by the influential Nasdaq, paints a picture of a market marked by resilience, optimism, and notable success. While tech stocks spearhead the positive movement, challenges persist, with economic uncertainties and the Federal Reserve’s stance continuing to shape the trajectory of the US stock market in 2024.
Source: Yahoo Finance
