Nasdaq ends sharply higher as Alphabet and AMD fuel AI surge
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[December 08, 2023] By
Noel Randewich and Shristi Achar A
(Reuters) - The Nasdaq ended sharply higher on Thursday after Alphabet
and Advanced Micro Devices sparked a megacap rally on fresh optimism
about artificial intelligence.
Shares of Alphabet jumped 5.3% as analysts cheered the launch of the
Google-parent's newest AI model, while AMD soared nearly 10% after the
company estimated the potential market for its data center AI chips
could reach $45 billion this year.
Other heavyweight tech-related stocks also gained, with Nvidia and Meta
Platforms rising over 2%, Amazon up 1.6% and Apple 1% higher.
The Philadelphia semiconductor index jumped 2.8%, increasing its 2023
gain to 48%, much of that fueled by bets about the future of AI.
"Today it's an AMD-Google rally. There's a contagion effect across the
market. Everyone wants to get on the bandwagon," said Jay Hatfield, CEO
of Infrastructure Capital Management in New York.
"We're kind of in this weird market, a tag-team market, where one day
tech leads, and then the next day value and the broad market lead."
The S&P 500 has steadily climbed since the end of October on
expectations the Federal Reserve has finished its campaign of interest
rate hikes and that it could begin cutting rates in March.
The S&P 500 climbed 0.80% to end the session at 4,585.59 points, with
1.8 stocks in the index gaining for each one that fell.
The most traded stock in the S&P 500 was Tesla, with $25.7 billion worth
of shares changing hands during the session. The shares rose 1.37%.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., October 27, 2023. REUTERS/Brendan McDermid/File
Photo
The Nasdaq Composite jumped 1.37% to 14,339.99 points, while Dow
Jones Industrial Average rose 0.18% to 36,117.57 points.
Volume on U.S. exchanges was relatively heavy, with 11.2 billion
shares traded, compared to an average of 10.8 billion shares over
the previous 20 sessions.
Traders have almost fully priced in the likelihood of the Fed
keeping rates unchanged at its meeting next week.
Data on Thursday showed the number of Americans filing new claims
for unemployment benefits increased less than expected last week to
a seasonally adjusted 220,000 for the week.
A Labor Department jobs report due on Friday could hint at how
quickly the U.S. economy is softening and may sway expectations
about when the Fed is likely to begin cutting rates. Non-farm
payrolls are expected to have increased by 180,000 jobs last month
after rising by 150,000 in October.
Interest rate futures imply a nearly 64% chance of a rate cut as
soon as March, according to the CME Group's FedWatch tool.
Limiting gains in the Dow, shares of Merck fell 1.7% after the
drugmaker's immunotherapy combination failed in a lung cancer study.
(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore and
by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb
Chakrabarty, Anil D'Silva and Richard Chang)
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