U.S. stocks surged Thursday afternoon, setting the stage for new record highs, as investors welcomed a string of updates including solid U.S. economic data, strong earnings from Micron (MU) and promises of more stimulus from China.
The Dow Jones Industrial Average (^DJI) rose 0.7% and the S&P 500 Index (^GSPC) rose more than 0.4% after both indexes fell from all-time highs in the previous trading session. The tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.5% amid a surge in Micron shares.
Stocks are starting to look strong again thanks to a triple optimism over AI trading, the health of the U.S. economy, and Chinese stimulus measures that could spill over into the U.S. market.
Shares of server maker Supermicro Computer (SMCI) fell 14% in trading on Thursday after The Wall Street Journal reported that the Department of Justice is investigating the company following a short-seller report published last month by Hindenburg Research.
The U.S. government’s final report on second-quarter GDP growth beat Wall Street expectations, while weekly jobless claims unexpectedly fell to a four-month low.
Meanwhile, China’s top leaders have signaled their intent to revive the struggling economy with new pledges to boost fiscal spending, stave off a property crisis and support the stock market. Mainland stocks have surged, with the CSI 300 (000300.SS) on track for its best week in a decade.
The upbeat mood is also being bolstered by growing expectations of another big rate cut from the Federal Reserve: Traders now see about a 50% chance of a 50/100% cut at its November meeting, up from 40% a week ago.
Read more: How the Federal Reserve’s rate cut will affect your bank accounts, CDs, loans and credit cards
Friday will see the release of highly-anticipated data on the PCE index, the Fed’s preferred inflation gauge.
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Thursday, September 26, 2024, 11:40 a.m. MST
Chinese stocks rise on hopes of further stimulus
Chinese and U.S. stocks soared again Thursday after China’s top leaders pledged to boost fiscal spending and support the country’s struggling real estate sector.
The news marks the second major stimulus announcement from Chinese authorities this week.
The CraneShares CSI China Internet ETF (KWEB) rose more than 11% on Thursday, extending its five-day gain to more than 11%, while online retail giants Alibaba (BABA), Pinduoduo (PDD) and JD.com (JD) were all up more than 10% on the day.
Below is the performance of a basket of China-related US stocks this week.
Source: Yahoo Finance
Thursday, September 26, 2024, 10:58 AM MST
30-year mortgage rates hit two-year low
The average interest rate on a 30-year fixed-rate mortgage fell slightly this week to its lowest level in two years.
Claire Boston of Yahoo Finance reports:
Thirty-year mortgage rates averaged 6.08% as of Thursday, down from 6.09% a week ago, according to data from Freddie Mac.
The average interest rate on a 15-year mortgage rose 1 basis point to 5.16%.
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Thursday, September 26, 2024 at 10:00 AM MST
The U.S. economy will not experience two consecutive quarters of negative GDP growth in 2022.
A slew of Gross Domestic Product (GDP) revisions were released on Thursday, including revisions for past years.
One in particular caught our attention: Initially, the Bureau of Economic Analysis reported that the U.S. economy grew at an annualized rate of 0.6% in the second quarter of 2022. This followed a negative figure in the first quarter, which sparked recession talk at the time, as two consecutive quarters of negative GDP are often cited as an indicator of a recession.
Some revisions revealed on Thursday revealed that the U.S. did not actually experience two consecutive quarters of negative GDP growth. Revised GDP data showed that the U.S. economy grew at an annualized rate of 0.6% in the second quarter of 2022.
This may shed some light on why the most widely anticipated recession in history was not officially announced by the National Bureau of Economic Research, and it’s a reminder of why forecasting recessions is so difficult, with even some of the most prominent recession indicator creators telling Yahoo Finance that recession indicators may never be a perfect tool for such predictions.
Thursday, September 26, 2024, 9:22 a.m. MST
S&P 500 nears record closing price
Benchmark indexes are on track to close at record highs on Thursday as investors cheered a string of positive news, including solid U.S. economic data, strong earnings from Micron (MU) and promises of more stimulus from China. Fed Chairman Jerome Powell is also expected to make a statement on Thursday, along with other Fed speakers.
The Dow Jones Industrial Average (^DJI) rose 0.6%, and the S&P 500 Index (^GSPC) added about 0.3% after both indexes fell from all-time highs in the previous trading session. The tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.3% amid a surge in Micron shares.
Thursday, September 26, 2024, 8:33 a.m. MST
Supermicro shares fall 13% after reports of Department of Justice investigation
Supermicro Computer Inc. shares fell more than 13% and were temporarily halted from trading due to volatility after The Wall Street Journal reported that the Justice Department was investigating the maker of data center servers.
The investigation came after short-seller Hindenburg Research released a report in August alleging “accounting manipulation” and other allegations at leading artificial intelligence companies.
Following the news, shares fell 17% and trading was temporarily halted due to volatility.
Thursday, September 26, 2024, 8:16 a.m. MST
Meta shares briefly hit all-time high as Wall Street bets on AI vision
Laura Bratton of Yahoo Finance reports:
Meta shares (META) briefly traded at an all-time high on Thursday following a developer event where the company unveiled its artificial intelligence ambitions.
The stock price rose to $577 after the market opened but was down 0.7% to around $564 by mid-morning.
At Meta Connect 2024 on Wednesday, CEO Mark Zuckerberg announced Meta’s latest AI model, Llama 3.2.
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Thursday, September 26, 2024 at 8:00 AM MST
Target’s CEO wants to eventually do away with lockable cases to combat retail theft
Brooke DiPalma of Yahoo Finance reports:
Target (TGT) is trying to rise to the challenge as it battles a long-standing retail scourge: store theft.
“We feel a lot better now than we did a year ago,” Target CEO Brian Cornell said in an interview for Yahoo Finance’s Lead This Way series. “And it’s all thanks to the support we’ve received at the federal level, the state level and the local level.”
Cornell was commenting on recent legislation, including efforts in California, that are “starting to crack down” on abuses in the marketplace.
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Thursday, September 26, 2024, 7:40 a.m. MST
A government shutdown has been averted for now, but two new spending fights loom
Ben Werschkul of Yahoo Finance reports:
Congress avoided a government shutdown and funded the government for three months, completing the final legislative work before the election.
“I want to thank both houses of Congress for this bipartisan agreement and for avoiding a costly government shutdown,” President Joe Biden said in a statement.
But the reprieve will be short-lived, and the plan puts lawmakers back in the middle of multiple spending fights when they return to Washington after voters have acted in November.
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Thursday, September 26, 2024, 7:19 a.m. MST
Oil prices fall 3% as Saudi Arabia vows to increase supply in December
Oil prices fell more than 3% on Thursday after the Financial Times reported that Saudi Arabia will begin lifting voluntary production cuts from December 1, bracing for lower oil prices.
West Texas Intermediate (CL=F) fell below $68 a barrel on Thursday, while international benchmark Brent crude (BZ=F) also fell below $71 a barrel.
OPEC+ has been delaying the release of crude to the market in an effort to support higher prices as the Saudi Arabia-led oil alliance loses market share to the United States and other crude producers.
Last year, the United States produced record amounts of oil and natural gas.
Thursday, September 26, 2024, 6:30 a.m. MST
Stocks rise on strong economic growth data, semiconductor stocks also rise
US stocks rose on Thursday, with the S&P 500 (^GSPC) hitting a new intraday record as the semiconductor sector gained on better-than-expected GDP release and strong results from Micron (MU).
The Dow Jones Industrial Average (^DJI) rose 0.5% and the S&P 500 added 0.7%. The tech-heavy Nasdaq Composite Index (^IXIC) jumped 1.2% on the back of a rise in Micron shares, leading the market rally.
Micron’s results helped lift a chip sector that includes AI giant Nvidia (NVDA), which rose more than 2% at the start of trading.
The latest economic data showed that U.S. gross domestic product (GDP) grew 3% in the second quarter from a year earlier, beating Wall Street expectations.
Thursday, September 26, 2024, 5:40 AM MST
Latest economic data beats expectations
The U.S. economy grew at an annualized rate of 3% in the second quarter, beating Wall Street expectations.
The Bureau of Economic Analysis’ third estimate of U.S. gross domestic product (GDP) for the second quarter was unchanged from the second estimate, which showed growth at an annualized rate of 3%. Economists had expected the figure to show growth at an annualized rate of 2.9%. The third estimate of second-quarter GDP confirms that economic growth exceeded the 1.4% annualized growth rate in the first quarter.
Meanwhile, data released by the U.S. Department of Labor on Thursday showed that jobless claims for the week ended Sept. 21 fell to 218,000, below Wall Street expectations of 223,000. That was the lowest level since mid-May.
Also released Thursday were durable goods orders for August, which were flat, an improvement over the 2.6% decline Wall Street had expected.
