19.01.202405:56 Forex Analysis & Reviews: Wall Street Booms: Artificial Intelligence and Bond Rising Open Up New Opportunities

On Thursday, US stock indices sharply rose: the S&P 500 index approached record highs, as optimism in artificial intelligence contributed to the growth of Nvidia shares and other chip manufacturers.

Shares of Taiwan Semiconductor Manufacturing (TSMC), registered in the US, rose almost 10% after the world's largest contract semiconductor manufacturer predicted revenue growth in 2024 by more than 20% amid increasing demand for high-performance chips used in AI applications.

Shares of chipmaker Nvidia (NVDA.O) rose 1.9% to a record high, becoming the most traded company on Wall Street with nearly $28 billion in shares sold. Rival Advanced Micro Devices (AMD.O) shares rose 1.6% and also reached a record high.

Shares of Broadcom (AVGO.O), Qualcomm (QCOM.O), and Marvell Technology (MRVL.O) added more than 3% each. The Philadelphia SE semiconductor index (.SOX) rose 3.4% and approached the record high of December 2023.

Apple (AAPL.O) shares jumped 3.3% after BofA Global Research upgraded the iPhone maker's stock to "buy" from "neutral." This helped the S&P 500 information technology index (.SPLRCT) rise by 2% and reach a record level.

The S&P 500 index rose 0.88% and ended the session at 4780.94 points. The index is down just 0.3% compared to the record high close of January 2022.

The Nasdaq added 1.35% to 15,055.65 points, while the Dow Jones industrial index rose 0.54% to 37,468.61 points.

Data showed that the number of Americans filing new claims for unemployment benefits fell last week to a late 2022 low, suggesting a confident increase in jobs in January.

Wall Street has fluctuated in recent sessions as investors became less confident that the Federal Reserve would start lowering interest rates in March.

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The S&P 500 index lost positions on Tuesday and Wednesday following strong retail sales data for December and after policymakers lowered expectations for an early start to rate cuts.

According to the FedWatch Tool from the CME Group, traders now see a 56% chance of a 25 basis point rate cut in March compared to a probability of over 80% a month ago.

Interest rate-sensitive sectors fell: the S&P 500 real estate index (.SPLRCR) dropped 0.6%, and the utilities index (.SPLRCU) lost 1.05%.

European stocks closed higher, aided by optimistic reports and the publication of last month's ECB meeting minutes, which showed policymakers confident that inflation is returning to target levels. The pan-European STOXX 600 index (.STOXX) rose 0.59%, and the MSCI global stock index (.MIWD00000PUS) added 0.73%. Emerging market stocks grew 0.37%. The broadest MSCI index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed up 0.39%, while Japan's Nikkei (.N225) lost 0.03%.

Atlanta Federal Reserve President Raphael Bostic said he is ready to lower rates earlier than he expected if convincing evidence emerges in the coming months that inflation is falling faster than anticipated. Bostic had previously stated he expects rate cuts to be appropriate in the second half of 2024.

Humana (HUM.N) shares fell 8% after the insurance company projected that medical expenses in the fourth quarter would be higher than previously expected. Peer UnitedHealth (UNH.N) shares fell 1.6%.

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Shares of KeyCorp (KEY.N) fell 4.6% after the lender reported a drop in fourth-quarter profit, and Birkenstock (BIRK.N) shares fell about 8% after failing to meet quarterly profit expectations.

Spirit Airlines (SAVE.N) shares fell more than 7% on news that the company is considering refinancing options for its debt and is not considering restructuring.

Advancing issues outnumbered declining ones on the S&P 500 (.AD.SPX) by a two-to-one ratio.

The S&P 500 achieved 30 new highs and seven new lows; Nasdaq recorded 56 new highs and 180 new lows.

Trading volume on U.S. exchanges was relatively high: 11.8 billion shares were sold compared to an average of 11.5 billion shares over the past 20 sessions.

The dollar index (.DXY) rose 0.03%, the euro fell 0.13% to $1.0867.

The Japanese yen weakened 0.01% against the U.S. dollar to 148.20 per dollar, while the British pound last traded at $1.2698, up 0.21% for the day.

Oil prices rose after the International Energy Agency (IEA) backed OPEC's forecast of high global oil demand this year as geopolitical risks in the Middle East highlighted supply issues.

U.S. crude rose 2.09% to settle at $74.08 per barrel, and Brent settled at $79.10 per barrel, up 1.57% for the day.

Gold prices rose as escalating geopolitical concerns, particularly unrest in the Middle East, increased the metal's appeal as a safe haven.

Spot gold added 0.8% to $2021.75 an ounce.