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The Dow Jones closed above the mark of 45,000 for the first time, the S&P 500 added 0.6% to close near 6,100, while the Nasdaq Composite outperformed, gaining 1.3%. The tech-heavy index is now 1.3% away from the 20,000 mark.
All seven big-tech stocks ended higher, sending a Magnificent Seven-linked ETF to gains of 62% so far for the year. The Technology Select Sector SPDR Fund also ended at an all-time high, a first since July.
Stocks surged after Fed Chair Jerome Powell said that the US economy is in “remarkably good shape.”
Powell also said officials can afford to be cautious as they lower rates toward a neutral level — one that neither stimulates nor holds back the economy. He spoke at the New York Times DealBook Summit in New York.
“We view this as slightly hawkish — but stopping well short of challenging the market’s growing confidence that a December cut is the base case, which has been our view all along,” said Krishna Guha at Evercore.
One of Powell’s favorite barometers of the economy — the Beige Book — showed economic activity increased slightly in November, and businesses grew more upbeat about demand prospects.
Treasury 10-year yields declined four basis points to 4.18%. French bond futures held onto earlier gains after far-right leader Marine Le Pen joined a left-wing coalition to topple the government, setting the stage for further political wrangling that has weighed on the nation’s assets for months.
“The current market environment is clearly ‘risk-on’,” said Steve Sosnick at Interactive Brokers. “Yet the evidence shows that someone has been buying insurance against a 10% correction in the S&P 500, even though — or perhaps because — we haven’t seen one in months.”
“We remain tactically bullish into year-end given the positive macro environment, earnings growth, and a Fed that remains supportive of markets,” wrote JPMorgan Chase & Co.’s Market Intelligence Team led by Andrew Tyler. “It is sensible to play the market’s momentum and see low pullback potential until mid-January,” they said.
A Bank of America Corp. indicator that tracks sell-side strategists’ average recommendations remains at its highest level since early 2022, in neutral territory, but much closer to a contrarian “sell” signal than a “buy.”
In commodities, West Texas Intermediate fell 2% Wednesday as tepid US economic data undercut OPEC+’s progress on a deal to keep output constrained. Gold was little changed early Thursday after two daily advances.
(With Inputs From Agencies.)
