Chip manufacturers Applied Materials, Lam Research and KLA each achieved more than 7%.The world’s leading maker of advanced AI chips, TSMC, forecast robust annual growth and indicated more U.S. manufacturing capacity is in the works. U.S.-listed shares of TSMC rose 5.4%.
The broader infotech sector rose 1.3%, while banks rose 0.9%.
BlackRock, the world’s largest asset manager, gained 3.8% after a rally in the markets boosted fee income and pushed assets under management to a record $14.04 trillion in the fourth quarter.
Goldman Sachs and Morgan Stanley both reported a rise in quarterly profit, helped by a wave of dealmaking. Shares of Goldman rose 1.9%, while Morgan Stanley rose 3.7%. “Some of these (bank stocks) have risen quite well and even though there are some mediocre gains and not many misses, there are a lot of unknown headwinds here,” said Jason Bottenfield, asset manager at Steward Partners.
Financial stocks have come under pressure this week over concerns about the impact of a proposed one-year cap on credit card interest rates at 10%, even as some banking giants posted robust profit growth.
At 9:34 a.m. ET, the Dow Jones Industrial Average rose 146.42 points, or 0.30%, to 49,296.05, the S&P 500 gained 40.50 points, or 0.58%, to 6,967.10 and the Nasdaq Composite gained 197.64 points, or 0.84%, to 23,669.39.
MARKETS COME AGAINST PROFITS
With geopolitical and economic data fading into the background, investors are betting on the fundamentals as earnings season kicks off to test whether the rally still has traces.
Wall Street heavyweights are losing some of their luster as investors start the year chasing bargains. Bottenfield added that it’s a pattern that often emerges at the beginning of the year.
“The widening is definitely happening.”
Money is flowing out of mega-cap tech into overlooked corners of the market, fueling a rally that saw the S&P 400 mid-cap and Russell 2000 hit record highs earlier this week.
The equal-weighted S&P 500 rose about 3.6% in January, versus just 1.1% gain for the S&P 500.
On that day, the energy index fell 1% after a two-day rally, while oil prices plummeted.
Meanwhile, Labor Department data showed weekly jobless claims rose by 198,000 in the week ending Jan. 5, less than economists’ estimates of 215,000.
According to LSEG, traders are still pricing in at least two interest rate cuts by the end of the year. Chicago Federal Reserve President Austan Goolsbee told CNBC that with the labor market showing stability, the Fed’s focus should remain on reducing inflation, leaving the door open for spending cuts later this year.
Markets will also be looking for signals from policymakers, including Fed Governor Michael Barr.
Advancing issues outpaced declining issues by a 1.6-to-1 ratio on the NYSE and by a 1.26-to-1 ratio on the Nasdaq.
The S&P 500 posted 28 new 52-week highs and no new lows, while the Nasdaq Composite posted 59 new highs and 25 new lows.
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