Market Snapshot: Dow, S&P 500 and Nasdaq jump as consumer, tech sectors power higher

United States

U.S. stocks barreled higher on Thursday as tech stocks like Nvidia and Apple erased early losses and a batch of mostly benign economic data helped assuage investor concerns of a consumer pullback that could harm the economy.

Federal Reserve minutes released Wednesday also stoked speculation about a pause to reassess interest rate hikes later in the year.

How are stocks trading?
  • The Dow Jones Industrial Average DJIA, +1.58% rose 607 points, or 1.9%, to 32,728 as the average headed for its fifth straight daily gain.
  • S&P 500 SPX, +1.83% rose 90 points, or 2.3%, to 4,069, holding above the key 4,000 level
  • Nasdaq Composite COMP, +2.38% was up 337 points, or 3% at 11,777.

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 trading near session highs, 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.

“Heading into the holiday weekend, it’s a nice reprieve to see things in the green,” said Northern Trust Wealth Management’s Kei Sasaki, a senior portfolio manager, by phone. “We think the markets, as well as investor sentiment, maybe had a bit of a sigh of relief,” Sasaki said, of the Fed minutes.

A view also has emerged that after hikes this summer, the Fed could have more wiggle room to reassess its planned rate hikes this year, particularly if economic growth shows signs of sputtering or the labor market starts to falter.

“This coincides with some of the things that have been facing investors, including anxiety as some retailers report lackluster results,” Sasaki said, adding that if consumer spending is slowing down, “that’s when recessionary fears kick in.”

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 COST, +5.09%, which is expected to report earnings after the close on Thursday. Recent reports from rival retailers like Target TGT, +3.52% and Walmart WMT, +1.98% rattled markets earlier this month.

However, investors did see some strong news from retailers earlier as Dollar Tree DLTR, +20.76%, Dollar General DG, +13.86% and Macy’s M, +17.91% rocketed higher — their shares climbing about 22%, 14% and 18% 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. AVGO, +2.96% announcing a $ 61 billion deal for cloud company VMware Inc. VMW, +3.15%, though speculation has been circulating the market for a few days. Broadcom shares and those of VMware rose about 4%.

Shares of Twitter Inc. TWTR gained 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. AAPL, +1.87% 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 NVDA, +4.72% 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. SNOW, -4.85% shares edged lower after the software company gave a disappointing forecast and reported cautious consumer activity, while shares of cloud computing company Nutanix Inc NTNX, -25.14% tumbled 21.6% 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 U.S. 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.

Opinion: More tech companies are seeing a spring swoon, but there may be a silver lining

How are other assets trading?
  • The yield on the 10-year Treasury note  TMUBMUSD10Y, 2.747%  rose 2 basis points to 2.77%. Yields and Treasury prices move opposite each other.
  • The ICE Dollar Index DXY, -0.26%, which measures the greenback against major currencies, was down 0.1%.
  • In oil futures  CL00, +3.38%, West Texas Intermediate crude for July delivery  CLN22, +3.38%  gained 3.6% to $ 114 a barrel. Gold GC00, +0.28% for June delivery was up less than 0.1% to $ 1,847 an ounce.
  • Bitcoin BTCUSD, -1.29%  was up 1% to $ 29,550.
  • In European equities, the Stoxx Europe 600 SXXP, +0.78% up 0.8%, while London’s FTSE 100  UKX, +0.56% gained 0.6%.
  • In Asia, the Shanghai Composite SHCOMP, +0.50% finished 0.5% higher, while Hong Kong’s Hang Seng Index  HSI, -0.27%  fell 0.2% and Japan’s Nikkei 225 index  NIK, -0.27%  dropped 0.2%.

Barbara Kollmeyer contributed reporting