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Updated February 10th, 2024 at 08:44 IST

S&P 500 settles above 5,000-mark for first time, led by Megacap rally

The Nasdaq also saw a surge, briefly trading above 16,000, buoyed by the strength of megacap and chip stocks.

Business Desk
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S&P 500 settles at record high: The S&P 500 index reached a major milestone on Friday, closing above the 5,000-mark for the first time in its history. 

The Nasdaq also saw a surge, briefly trading above 16,000, buoyed by the strength of megacap and chip stocks. 

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Notably, Nvidia surged 3.6 per cent and hit a record high following reports of its new business unit dedicated to designing customised chips for cloud computing and advanced artificial intelligence (AI) applications.

The surge in AI-related stocks comes amid growing investor optimism regarding artificial intelligence technology. 

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Reports of OpenAI Chief Executive Sam Altman's discussions with investors to enhance chip-building capacity for powerful AI applications further fueled market sentiment.

David Lefkowitz, head of US equities at UBS Global Wealth Management, highlighted the significance of these developments in bolstering AI infrastructure. 

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While the round number milestones of the S&P and Nasdaq may not fundamentally alter investors' risk calculations, they underscore the market's dynamism.

Tech-focussed heavyweights such as Microsoft, Amazon.com, and Alphabet contributed to the index gains alongside the outperformance of the Philadelphia semiconductor index. 

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Moreover, strong fourth-quarter earnings growth, exceeding earlier expectations, has propelled market optimism.

However, amid positive earnings, there remain uncertainties surrounding interest rate policies. 

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Hawkish comments from Fed policymakers have tempered expectations of imminent rate cuts, although the "dot-plot" still suggests potential easing later in the year.

Market participants eagerly anticipate upcoming data on consumer prices for further insights into potential rate adjustments. 

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Amid individual stock performances, Cloudflare saw a notable rally after forecasting upbeat first-quarter revenue and profit, while PepsiCo faced a decline following lower-than-expected fourth-quarter revenue.

Overall, advancing issues outnumbered decliners on both the NYSE and Nasdaq, reflecting broad market strength. 

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The S&P 500 recorded numerous new highs, underlining the current bullish sentiment and robust market activity. The S&P 500's historic breach of the 5,000 mark underscores the market's resilience and investor confidence amidst a dynamic economic landscape.

(With Reuters Inputs)

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Published February 10th, 2024 at 08:44 IST

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