The Nasdaq is leading the rally among major Wall Street indices as major rate-sensitive technology and growth stocks advanced after the Federal Reserve hinted it was about to halt interest rate hikes amid turmoil in the banking sector.
As US Treasury yields tumbled amid growing hopes of an end to the Fed’s tightening cycle, Apple Inc, Microsoft Corp and Amazon.com gained about 2 percent each on Thursday.
Nvidia Corp. jumped 3.3 percent after Needham raised its price target on the chip maker with a potential benefit from data center strength in the near term.
Telecom services and technology stocks led the gains among the S&P 500 sector indices.
The US central bank on Wednesday raised interest rates by an expected 25 basis points, but its policy statement no longer said “continued hikes” would likely be appropriate, signaling a clear shift in its stance.
The soft tone of the Federal Reserve relieved markets that have been plagued by fears of a liquidity crunch in the banking sector since the failure of two US regional lenders earlier this month.
“The markets are hoping you’ll have another rate hike, probably,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
“I imagine the hopes (of a rate cut) have been dashed. You don’t want things to go so south that you need a rate cut.”
Traders’ bets are split roughly evenly between the Fed halting an interest rate hike in May and another 25 basis point hike, according to CME Group’s Fedwatch tool.
Meanwhile, troubled First Republic Bank fell six percent and extended losses amid choppy trading after Treasury Secretary Janet Yellen said there was no discussion of securing all bank deposits.
However, shares of Peers Truist Financial Corp and Western Alliance Bancorp rose 2.1 percent and 4.4 percent, respectively.
The data showed that jobless claims fell to 191,000 last week compared to the previous week, against expectations that the number would rise to 197,000.
Globally, the Bank of England raised interest rates by another quarter of a percentage point and expects the rise in British inflation to subside faster than before.
In early trading on Thursday, the Dow Jones Industrial Average rose 398.52 points, or 1.24 percent, at 32,428.63, the S&P 500 rose 59.20 points, or 1.50 percent, to 3,996.17 points, and the Nasdaq Composite rose 251.34 points, or 2.15 percent, at 11,921.30.
Block Inc fell 12.8 percent after Hindenburg Research said it was holding short positions in the payments company led by Jack Dorsey.
Coinbase Global Inc fell 11.1 percent after the US Securities and Exchange Commission threatened to sue the cryptocurrency exchange over some of its products.
Accenture jumped 7.7 percent due to plans to cut about 2.5 percent of its workforce.
Advance issues outnumber losers 3.08 to 1 on the NYSE and 2.01 to 1 on the Nasdaq.
The S&P posted four new highs in 52 weeks and 10 new lows, while the Nasdaq recorded 42 new highs and 130 new lows.
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