AP – Wall Street snapped out of its holiday-season funk.
The S&P 500 rallied 1.3 per cent for its first gain since the festive season and its best day in nearly two months. Strength for Big Tech stocks helped it break a five-day losing streak, its longest since April, and trim its loss for the week to 0.5 per cent.
The Dow Jones Industrial Average rose 339 points, or 0.8 per cent, and the Nasdaq composite leaped 1.8 per cent.
Nvidia was the strongest force lifting the market after dashing 4.5 per cent higher. Other companies caught up in the craze around artificial-intelligence (AI) technology also rose, despite criticism that their stock prices have already vaulted too high. Super Micro Computer, which sells servers for AI and other uses, jumped 10.9 per cent, and Palantir Technologies climbed 6.3 per cent.
“While the easy gains in AI may be behind us, we think this rally looks far from over,” according to Chief Investment Officer Americas at UBS Global Wealth Management Solita Marcelli.
Another influential Big Tech stock, Tesla, jumped 8.2 per cent to bounce back from its 6.1 per cent tumble the day before, when it disclosed it delivered fewer electric vehicles in the last three months of 2024 than analysts expected.
Rival Rivian soared 24.5 per cent after saying it delivered more than 14,000 vehicles during the latest quarter. That was more than analysts expected.
On the losing end of Wall Street was United States (US) Steel, which fell 6.5 per cent after President Joe Biden blocked a nearly USD15 billion deal proposed by Japan’s Nippon Steel to buy its Pittsburgh-based rival.
All told, the S&P 500 rose 73.92 points to 5,942.47. The Dow Jones Industrial Average gained 339.86 to 42,732.13, and the Nasdaq composite jumped 340.88 to 19,621.68.
Wall Street’s post-festive season pullback dimmed its shine by only a bit following two stellar years for US stock indexes. They’ve vaulted to records after the US economy managed to keep growing despite high interest rates that have helped push inflation nearly all the way down to the Federal Reserve’s (Fed) two per cent target.
But even though the economy and job market still look solid at the moment, the path ahead is not assured. Part of the reason the S&P 500 set more than 50 all-time highs last year was because of the expectation that the Fed would keep cutting interest rates through 2025, after it began easing them in September.
Traders are now ratcheting back their expectations for coming cuts to rates. Inflation is proving to be stubborn as the Fed tries to wring out the last percentage point of improvement to get inflation down to two per cent.
