The S&P 500 and the Nasdaq hit intraday record highs on Thursday, a day after the U.S. central bank delivered a quarter-point interest rate cut, while chipmaker Intel climbed after Nvidia decided to build a stake in the company.
Intel jumped 24.6%, and was set for its biggest one-day gain since 1987 after Nvidia said it would invest $5 billion in Intel, throwing its heft behind the struggling U.S. chipmaker.
Nvidia was up 2.3%, bouncing back from losses on Wednesday, when a report said Chinese tech firms might stop buying its chips.
Most semiconductor stocks such as Applied Materials Lam Research and Micron Tech also advanced between 4.5% and 5.6%. Intel’s peer Advanced Micro Devices however, slipped 3%.
The stocks boosted the tech-heavy Nasdaq and the S&P 500 technology sector which was up 1.2%.
A broader semiconductor index hit a record high and was last up 3.3%.
Meanwhile, Federal Reserve Chair Jerome Powell said that the softening jobs market was a priority for the central bank after it delivered the highly expected cut, indicating more reductions could follow at its October and December meetings.
Investors are pricing in 42.8 basis points in cuts by end-2025, data compiled by LSEG showed.
The small-cap Russell 2000 index gained 1.5% and was on track for a record close, as these companies are likely to perform better in a low interest-rate environment.
At 10:09 a.m. ET, the Dow Jones Industrial Average rose 163.73 points, or 0.36%, to 46,182.05, the S&P 500 gained 41.53 points, or 0.63%, to 6,641.88 and the Nasdaq Composite gained 217.21 points, or 0.98%, to 22,478.53.
Consumer staples stocks fell 0.6% on the S&P 500, while a decline in consumer discretionary stocks such as McDonald’s and Amazon limited gains on the Dow.
Data showed that the number of Americans filing new applications for unemployment benefits fell last week, but the labor market has softened as both demand for and supply of workers have diminished.
“With the Fed acknowledging that labor supply and demand have gone down and the worst of potential disruption from the tariffs is behind us, all that kind of comes together (to) where less restrictive policy is warranted,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
“But (it is) not necessary an emergency dramatic reduction is in the cards as well. So we (can) really see the next couple of meetings go the same way as this one did.”
Still, the cut is expected to add to Wall Street’s recent rally, boosted by monetary policy easing hopes and a revival of AI-linked stock.
The three indexes have gained so far in September – a month deemed bad for U.S. equities historically – where the S&P 500 has shed 1.4% on average since 2000, data compiled by LSEG showed.
Among stocks, CrowdStrike gained 10.2% after at least nine brokerages raised their price target on the stock.
Nucor slipped 3.5% after the steel company said it expected third-quarter profit to decrease across all its three operating segments.
Advancing issues outnumbered decliners by a 1.73-to-1 ratio on the NYSE and by a 2.71-to-1 ratio on the Nasdaq.
The S&P 500 posted 21 new 52-week highs and six new lows, while the Nasdaq Composite recorded 82 new highs and 22 new lows.
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