U.S. stocks barreled higher on Thursday as tech stocks like Nvidia and Apple erased early losses. A batch of mostly benign economic data also helped assuage investors concerns, while the Fed minutes released Wednesday stoked speculation about a pause to reassess interest rate hikes later in the year.
How are stocks trading?
rose 1.5% to 4,040, holding above the key 4,000 level
Dow Jones Industrial Average
rose about 450 points, or 1.4%, to 32,572 as the average headed for its fifth straight daily gain
was up 2% at 11,672
On Wednesday, the Dow industrials booked its fourth-straight session, rising 191.66 points, or 0.6%, to 32,120.28. The S&P 500 index gained 1% to 3,978.73, while the Nasdaq Composite rose 1.5% to 11,434.74. Should it finish higher on Thursday, the Dow would record its longest winning streak since March.
What’s driving the markets?
U.S. stock indexes were set to build on Wednesday’s gains as the minutes from the Fed’s latest meeting signaled that the central bank remained on track for 50 basis-point hikes in June and July, as policy moves “expeditiously” toward the projected neutral rate of interest.
According to several analysts, this outlook would give the Fed more wiggle room to reassess its planned rate hikes later this year, should economic growth sputter or the labor market start to falter.
Meanwhile, as the summer begins and the latest corporate earnings season draws to a close, there will be fewer negative catalysts to rattle markets.
“There’s a lack of scheduled negative news, although something negative could also come out of the blue,” said Mohannad Aama, a longtime markets strategist and professor at Rutgers University.
One potential risk on the horizon is Costco
which is expected to report earnings after the close on Thursday. Recent reports from rival retailers like Target
rattled markets earlier this month.
However, investors did see some strong news from retailers earlier as Dollar Tree
rocketed higher – their shares climbing almost 19%, 12% and 14% respectively – breaking a trend of softening guidance among prominent retailers.
There was plenty of other corporate news for investors to chew over, with chip group Broadcom Inc.
announcing a $61 billion deal for cloud company VMware Inc.
though speculation has been circulating the market for a few days. Broadcom shares fell slightly, while VMware rose 1%.
Shares of Twitter Inc. TWTR surged after Tesla CEO Elon Musk said in a regulatory filing that he would lean on equity to finance his $44 billion Twitter deal, and not a margin loan backed by shares of his electric-car maker.
Shares of Apple Inc.
turned higher, erasing losses from the premarket session, after a report said the iPhone maker plans to keep production of its flagship item flat this year due to industry challenges.
Separately, Apple said it would lift hourly pay for U.S. workers to $22 an hour, up 45% from 2018, to compete in a tight labor market and amid pushes by some employees to unionize. Meanwhile, Nvidia
shares recovered from early losses following last night’s softer outlook.
But while Apple and Nvidia rebounded, other tech companies remained mired in the red. Snowflake Inc.
shares fell more than 9% after the software company gave a disappointing forecast and reported cautious consumer activity, while shares of cloud computing company Nutanix Inc
tumbled 21% after its poor fourth-quarter outlook.
In U.S. economic data, new U.S. jobless claims fell by 8,000 last week to 210,000, signaling that layoffs remain extremely low and the economy is still expanding despite more headwinds. The latest reading on US first-quarter GDP showed the economy contracted 1.5% in the first quarter, which was slightly more than the 1.4% contraction reported during the first reading – although the change wasn’t large enough to induce panic.
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How are other assets trading?
The yield on the 10-year Treasury note
rose 2 basis points to 2.766%. Yields and Treasury prices move opposite each other.
The ICE Dollar Index
which measures the greenback against major currencies, was down 0.2%.
In oil futures
West Texas Intermediate crude for July delivery
gained 3% to $113 a barrel. Gold
for June delivery fluctuated between gains and losses, but was recently up about 0.2% to $1,849 an ounce.
was down 2% to $29,108.
In European equities, the Stoxx Europe 600
up 0.2%, while London’s FTSE 100
In Asia, the Shanghai Composite
finished 0.5% higher, while Hong Kong’s Hang Seng Index
fell 0.2% and Japan’s Nikkei 225 index