The S&P 500 reaches a new record high following a subdued Producer Price Index report
On August 13, the S&P 500 reached a record-high close, driven by gains in Sandisk and other major tech stocks. This rally was supported by subdued producer price inflation data, which reinforced the expectation that the Federal Reserve would refrain from raising interest rates in its upcoming September meeting. Memory chip producers Sandisk and Micron Technology saw their shares climb by 13.7% and 4.2%, respectively. Meanwhile, Microsoft increased by nearly 1% and Meta Platforms experienced a rise of 2.8%.
Shares of the AI cloud company CoreWeave (CRWV.O) experienced a 1.3% decline. This follows a surge of 19% the previous day after the company raised its annual capital spending forecast. Recent strong forecasts from companies like Microsoft and Amazon (AMZN.O) have helped alleviate investors' worries about significant expenditures on AI data centers. According to Jay Hatfield, CEO of Infrastructure Capital Advisors in New York, "The AI earnings-driven tech boom is ongoing. It's an earnings boom, not a bubble."
S&P 500 hits new record
What’s happening:
US stocks moved up slightly on Thursday, with the S&P 500 reaching a record closing high.
What happened:
Contributing to this rise were gains in major tech stocks like SanDisk and Micron Technology, which provided a lift to US stock indices.
Recent producer price inflation data led to speculation that the US Federal Reserve might refrain from increasing interest rates next month.
The S&P 500 reaches a new record high following a subdued Producer Price Index report
Why it matters: US producer prices held steady in July due to a drop in goods prices and a rise in service costs. Year-on-year, producer prices rose by 4.7%, slowing from 5.5% the previous month and falling short of market expectations of 4.9%.
US initial jobless claims increased slightly during the first week of August, suggesting some stability in the jobs market.
Wednesday's data also indicated a second consecutive month of easing consumer inflation, which fell to 3.4% in July.
This latest inflation data has reduced speculation about the Federal Reserve raising its benchmark rates soon.
Positive forecasts from tech giants like Amazon and Microsoft recently have alleviated market concerns regarding their heavy AI investments.
On Thursday, memory chipmaker stocks rose significantly, with SanDisk shares jumping about 14% and Micron Technology's stock rising over 4%. Meta Platforms saw a 2.8% increase, while Microsoft's stock increased nearly 1%.
Netflix shares climbed about 5.4% following Bill Ackman's announcement of a new investment in the company.
Most sectors in the S&P 500 ended higher on Thursday, with communication services and real estate stocks leading the way.
The S&P 500 increased by 0.65% to close at 7,798.99 on Thursday, surpassing last Friday's record close. The Dow Jones index edged up by 0.13% to 53,839.99, and the Nasdaq 100 rose by 1.15%, finishing at 30,084.50.
The S&P 500 reached a new record high
Key focus areas for investors include tracking recent developments in the US-Iran situation.
Today, the US will release important economic data: retail sales at 16:30 UAE Time, and both the Michigan consumer sentiment index and business inventories at 18:00 UAE Time. Retail sales, which grew by 0.2% in June, are anticipated to increase by 0.1% in July. Analysts predict a slight drop in the University of Michigan’s consumer sentiment index from 55.2 in July to 54.5 in August. Business inventories are expected to see a 0.1% rise in June, following a 0.3% increase in May.