S&P hits record as hopes of rate cut build
Wall Street charged ahead on Thursday, with the S&P 500 rising 1 percent to a record closing high while the Nasdaq composite finished up 1.5 percent, with the biggest boosts from technology and growth stocks on increasing investor optimism about prospects for Federal Reserve rate cuts this year. In Washington, Fed Chair Jerome Powell told a US Senate committee that the US central bank is "not far" from being confident inflation is declining toward the 2 percent target, which would make rate cuts possible. His comments reinforced investor hopes for a first rate cut in June and boosted equity indexes that had faltered in the days leading up to his Congressional testimonies, which kicked off on Wednesday. Also the number of Americans filing new claims for unemployment benefits was unchanged as the labour market continued to ease, Labour Department data showed. This followed private payrolls, job openings, quit rate and unemployment claims data that gave investors a picture of a jobs market that was softening but still solid. Powell "essentially left rate cuts on the table for this year. That's what markets wanted to hear," said Anthony Saglimbene, Chief Market Strategist, Ameriprise Financial. "The market's also responding well to the employment data we've had so far this week," he said. "It adds to the narrative that we're starting to see employment slow but still solid." But Saglimbene noted investors will still anxiously monitor the non-farm payrolls report on Friday for further details on the labour market. The Dow Jones Industrial Average rose 0.34 percent, to 38,791, the S&P 500 gained 1.03 percent, to 5,157. The Nasdaq Composite hit an intraday record high and narrowly missed a closing record to end up 1.51 percent, at 16,273. "Everybody is waiting for something bad to happen but nothing bad has happened to the economy, markets, earnings and policy," said John Augustine, chief investment officer at Huntington Private Bank. "That's why we're building momentum." Megacap growth stocks were major contributors to index gains including social media company Meta, which added 3.2 percent, and AI chip darling Nvidia, which ended up 4.5 percent. Shares in lingerie retailer Victoria's Secret & Co fell sharply on a weak annual forecast, finishing down 29.7 percent. (Reuters)