4:05pm: Apple, chipmakers lead markets higher
Wall Street finished higher on Thursday thanks to Apple's best performance since May 2023.
The Nasdaq led the way at the close, soaring over 1.4% to reach 15,056 points; the S&P 500 gained almost 0.9% to reach 4,781, and the Dow Jones added 0.5% to close at 37,469.
Apple stock experienced a 3% uptick after Bank of America upgraded it from Neutral to Buy. The upgrade was driven by optimism surrounding Apple's new Vision Pro headset, expected to drive increased hardware sales.
The market was uplifted by strong performances in big tech stocks following a positive AI-driven revenue forecast from TSMC (TSM), a major supplier to Apple and Nvidia (NVDA). Despite TSMC's profit dip, it exceeded Wall Street expectations, boosting shares of AMD (AMD) and other chipmakers, with TSMC's stock surging over 9%.
12:00pm: Tech remains the flavour of the day
Tech stocks continued to enjoy a strong session with the Bank of America upgrade giving Apple a lift.
At midday, the Dow Jones Industrial Average was 91.06 points at 37,175.61, the S&P 500 was up 14.00 points at 4,753.21 and the Nasdaq Composite was up 145.22 at 15,000.85.
The tech sector was given a further boost by Taiwan Semiconductor Manufacturing Co, the world’s largest chipmaker, which rallied 8% after posting an earnings and revenue beat for the fourth quarter.
Tech shares have “gotten a boost today from the TSMC update, which had a lot of positivity on forward guidance for semiconductors and AI, to the extent that’s what most of these companies are trading on. You can see the price action move to that,” said Ross Mayfield, investment strategy analyst at Baird, quoted by CNBC.
9:42am: Tech leads US rally, Apple gains on upgrade
Tech stocks prospered with Apple boosted by an upgrade and chipmakers by strong TSMC earnings but it was a tricky start for blue-chips.
Shortly after the opening bell, the Dow Jones Industrial Average was down 58.92 points, 0.2%, at 37,207.75, the S&P 500 was up 18.56 points, 0.4%, at 4,757.77 and the Nasdaq Composite was up 143.36, 1.0%, at 14,998.98.
Jobless claims hit their lowest level in more than a year last week, as the labour market remains robust, further denting hopes of an early cut in interest rates.
Initial claims for US state unemployment claims totalled 187,000 in the week ending January 13, their lowest level since September 2022 and a decline from the previous week’s 203,000, the labour department said on Thursday. Economists had forecast 207,000 new claims.
Despite the market angst, the CMEFedWatch tool puts the chances of a rate cut at the March Federal Reserve meeting at 55%, although below recent more optimistic levels.
Stocks on the move included Apple rose 2.0% after Bank of America upgraded the iPhine maker to 'buy' from 'neutral' and raised its price target to $225 from $208.
But sandal retailer Birkenstock, fell 12%, after it flagged margin pressures - the company expects a “modest headwind” to adjusted earnings in 2024 as it ramps up production at its facility in Germany, it said on Thursday in its first earnings report since its October IPO.
Elsewhere, shares in Humana (NYSE:HUM) plunged 13% after the health insurer cut its earnings outlook because rising demand for medical services has pushed up its costs.
7:00am: Stocks expected to climb with chipmakers in demand
Stocks in New York are expected to open higher on Thursday as investors continue to adjust to the likelihood interest rates cut will be delayed.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.1%, while those for the S&P 500 climbed 0.4% and contracts for the Nasdaq 100 futures advanced 0.6%.
Chipmakers gained in US premarket trading after Taiwan Semiconductor Manufacturing, the main supplier to Apple Inc (NASDAQ:AAPL, ETR:APC). and Nvidia Inc, said it expects a return to solid growth this quarter.
Microchip Technology, Advanced Micro Devices and ON Semiconductor Corp (NASDAQ:ONNN) all rose more than 2%.
Boeing rose after winning an order for 150 of its troubled 737 Max jets from India’s newest airline, Akasa Air.