Jamie Spencer
U.S. stocks climbed on Thursday, buoyed by a rally in semiconductor shares and robust economic data that eased concerns about a potential recession. The S&P 500 gained 0.4%, reaching a new intraday high, while the Dow Jones Industrial Average rose 187 points, or 0.4%, and the Nasdaq Composite advanced by 0.6%. Semiconductor stocks led the charge, helping the market regain momentum after recent losses in the tech sector.
Semiconductor Stocks Lead the Market Gains
Semiconductor stocks were the standout performers on Thursday, with major names like Nvidia and Taiwan Semiconductor Manufacturing Co. (TSMC) driving the sector higher. Nvidia saw a 3% jump, hitting a new all-time high, while TSMC surged 13% following its strong third-quarter earnings report. TSMC, a key supplier for Nvidia and other chipmakers, also raised its revenue forecast for the remainder of the year, signaling continued strength in the semiconductor industry. Additionally, AMD added 1% to its stock value, contributing to the sector’s overall gains.
Michael Green, chief strategist of Simplify Asset Management, commented on the renewed investor interest in Big Tech and semiconductors: “This feels more like more of the normal, as compared to a broadening or reversal or anything important along those lines,” he told CNBC, referring to investors’ return to familiar tech names after recent volatility.
Strong Economic Data Bolsters Investor Confidence
The rally in equities was further supported by strong economic data released on Thursday. September’s retail sales report showed that consumer spending remained resilient, with a 0.4% monthly increase, surpassing the Dow Jones estimate of 0.3%. Excluding autos, retail sales surged by 0.5%, significantly higher than the forecasted 0.1%.
In addition to strong retail numbers, jobless claims for the week ending October 12 came in lower than expected, providing further reassurance about the health of the labor market. These indicators helped boost investor confidence, suggesting that the economy remains on solid footing despite concerns about a potential slowdown.
Seasonal Adjustments and Market Sentiment
While the retail sales data exceeded expectations, Michael Green offered a more tempered view of the numbers, noting that seasonal adjustments played a large role in the positive figures. “If you look at this year versus just last year on a non-seasonally adjusted basis, [the numbers] were largely flat,” Green said. He added that while the data may not point to a significantly stronger economy, the market’s bullish interpretation is what drove the rally.
According to Green, investor optimism is playing a key role in the market’s performance, with traders choosing to view the economic data through a positive lens. This sentiment, coupled with the resurgence of Big Tech stocks, contributed to Thursday’s gains.
Thursday’s stock market rally was fueled by strong performances in the semiconductor sector and encouraging economic data. Nvidia’s record high, along with TSMC’s earnings beat and upbeat revenue forecast, led the semiconductor rally, while robust retail sales and lower-than-expected jobless claims provided further support for equities. Although some analysts cautioned that seasonal adjustments may have inflated the retail numbers, investor sentiment remained upbeat, pushing the market to new highs as optimism outweighed recession concerns.
