Dow hits all-time high on Thursday

Dow high
Dow high

The S&P 500 closed at a new record high on Thursday, marking its third record-setting close this week. The broad market index gained 0.4% to end the session at 5,745.37.

The Dow Jones Industrial Average climbed 260.36 points, or 0.62%, to finish at 42,175.11, while the Nasdaq Composite advanced 0.6% to close at 18,190.29.

Micron Technology had its best day since 2011, surging 17% after issuing strong guidance for the current quarter and topping analysts’ estimates for its fiscal fourth quarter. The rally boosted other chip stocks, with NVIDIA and AMD each gaining about 4%. Fresh economic data supported a solid economy, easing concerns that the Federal Reserve might aggressively cut rates due to a potential slowdown.

Weekly jobless claims fell more than expected, indicating a steady labor market. Durable goods orders for August were unchanged, defying economists’ expectations of a decline. The final reading of second-quarter GDP remained unrevised at a robust 3%.

Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley, said, “If there’s a problem in the labor market, it’s not showing up in the weekly jobless claims data. Though the monthly jobs report will play a bigger role in defining market sentiment, numbers like this will likely keep soft-landing hopes alive.”

Crypto stocks rallied as the price of Bitcoin climbed back above $65,000.

Dow hits milestone amid investor confidence

Coinbase shares rose 8%, marking its biggest up move since July 19, while MicroStrategy gained 10%. Mining stocks such as Marathon Digital and Riot Platforms each gained about 8%. Southwest Airlines jumped more than 7% after leadership shared plans to improve profits, including a three-year strategy projected to increase earnings before interest and taxes by $4 billion in 2027.

Falling oil prices also helped lift airline stocks, with United Airlines and Delta Air Lines seeing gains of around 5%. Super Micro Computer plummeted more than 10% following a report that the AI server maker is being investigated by the Justice Department. The report, citing anonymous sources, mentioned a former employee’s allegations of accounting manipulations.

The S&P 500 has reached record levels on more than 1 out of every 5 trading days so far in 2024, according to Oppenheimer. The index is on track to end the year higher by more than 20%. As valuations of large-cap stocks grow, HSBC suggests it isn’t quite time to pivot to small caps.

Nicole Inui, HSBC head of equity strategy, Americas, wrote, “Yes, valuations look lofty. We argue that much of this frothiness and loftiness is due to the dominance of the ‘big’ companies in the index, not only big tech but also big retail, big banks, and big pharma. Historically, small caps have underperformed following a Fed easing cycle, even when a recession doesn’t materialize.”

Thursday’s market performance underscores continued investor confidence in the resilience of the U.S. economy.

Maya Johnson

Maya is the editor-in-chief of KillerStartups.com. She provides value to early-stage entrepreneurs through content and her weekly newsletter. Reach her at maya@killerstartups.com

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