S&P 500 and Nasdaq hit record highs on AI chipmaker rally
The S&P 500 and Nasdaq reached all-time highs after a strong rally led by AI chipmakers and a drop in US Treasury yields. At the market close, the S&P 500 climbed 0.58%, surpassing 7,800 for the first time, while the Nasdaq gained 0.45%. The Dow also saw a 0.49% increase, though it remains slightly below its August record.
Investors were buoyed by positive developments for chipmakers like Marvell Technology, Advanced Micro Devices, and Broadcom, reflecting growth in the AI-driven chip market. Additionally, optimism grew that the Federal Reserve might hold interest rates steady at its October meeting. Recent job figures showed weaker-than-expected labor market growth, leading Fed officials to suggest that a rate hike might be deferred.
Despite broader economic instability and global political tensions, the stock market's optimism was driven by sustained investment in AI. However, the bond market has faced turbulence, with 10-year US Treasury yields hitting a peak of 5.349% before easing slightly. Higher energy prices also continue to burden consumers, with gas and diesel costs remaining significantly above year-ago levels.
Economic concerns are expected to play a major role in the upcoming midterm elections, with voters expressing frustration over rising prices. Donald Trump, campaigning for Republican candidates, has claimed that the nation is performing better than ever and predicted gas prices will soon drop below $1.85 a gallon.