NEW YORK (AP) โ Jumps by big technology companies on Thursday helped U.S. stock indexes recover much of the previous day's decline.
The S&P 500 rose 38.42 points, or 0.7%, to 5,199.06, recovering most of its earlier loss, sparked by concerns that interest rates could remain high for a while. The Nasdaq Composite rose 271.84, or 1.7%, to a record high of 16,442.20. The Dow Jones Industrial Average, which has less emphasis on technology, lagged. It fell 2.43 points, or less than 0.1%, to 38,459.08.
Apple was the strongest force driving the market higher, rising 4.3% to cut its year-to-date losses. Nvidia followed closely behind as it remains frenzied around AI technology. The chip company rose 4.1% to bring its profit for the year to 83%. Amazon It added 1.7% and set a record after surpassing its previous high set in 2021.
It's a return to last year's form, when a handful of Big Tech stocks were responsible for the majority of the market's gains. This year, the gains had been spreading. That is, until concerns about persistently high inflation sent a chill through financial markets.
In the bond market, which has fueled much of the Wall Street action, Treasury yields remained relatively stable after a mixed batch inflation data and US economy.
When or if the Federal Reserve will do it? deliver interest rate cuts What traders crave has been one of the main issues dominating Wall Street. After starting the year predicting at least six cuts Traders have since sharply lowered their expectations. a rope of hottest - that - expected -reports on inflation and economy has raised fears that last year's progress on inflation has stalled. Many traders now expect only two cuts in 2024, with some discussing the possibility of zero.
A report Thursday morning showed that inflation at the wholesale level was slightly lower last month than economists expected. This is encouraging, but the data also showed that underlying inflation trends were closer to or just above forecasts. Those figures exclude the effects of fuel and some other notoriously unstable prices, and economists say they can give a better idea of โโwhere inflation is headed.
The update doesn't make up for Wednesday's disappointingly high report on U.S. consumer inflation, "but it may ease investor nerves, at least in the near term," said Chris Larkin, managing director of trading and investment at E-Commerce. Morgan Stanley Trade.
A separate report said fewer American workers filed for unemployment benefits last week. It's the latest sign that the labor market remains remarkably strong despite high interest rates.
The Federal Reserve has kept its main interest rate at the highest level since 2001 in hopes of putting enough pressure on the economy and investment prices to rein in high inflation. The fear is that keeping rates too high for too long due to persistently high inflation could cause a recession.
Some investors now warn that any rate cut by the Federal Reserve could be seen as a warning sign more than anything, and could occur only if the economy and labor market are weakening enough to require an additional increase.
All of this comes at a time when critics had already called the US stock market too expensive after its more than 20% jump since Halloween. For stock prices to appear more reasonable, without requiring sharp declines, interest rates would have to fall or corporate profits would have to strengthen.
Earnings reporting season has only just begun, as companies tell investors how much they earned during the first three months of the year.
Rent the Runway more than doubled after reporting slightly better revenue for its latest quarter than expected. The company, which allows customers to rent designer clothing, also said it expects to break even in terms of cash flow this next fiscal year. Its shares soared 161.9%.
Alpine Immune Sciences soared 36.9% after Vertex Pharmaceuticals agreed to buy the biotech company for $4.9 billion in cash. Vertex added 0.7%
CarMax suffered one of the biggest losses in the S&P 500 after it reported weaker earnings for its latest quarter than analysts expected. Higher interest rates on auto loans are making business harder, along with tighter lending standards and low consumer confidence. Its shares fell 9.2%.
In the bond market, the 10-year Treasury yield rose to 4.57% from 4.55% late Wednesday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.94% from 4.97%.
In foreign stock markets, indices fell modestly across Europe after the European Central Bank kept its main interest rate stable.
Shares were mixed in Asia, where South Korea's Kospi rose 0.1% after the ruling conservative party suffered a drop. devastating defeat in a parliamentary election.
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AP Business writers Matt Ott and Elaine Kurtenbach contributed.
