The Dow Jones closed at a new record high on Thursday even as the S&P 500 and the Nasdaq gave up gains to end at the flat line. Traders reacted to a slew of economic data and earnings from chipmakers like TSMC.
The Dow Jones ended 0.4% higher, but closed 60 points off the highs of the day, while the S&P 500 reversed 40 points and the Nasdaq Composite fell over 150 points from the session’s highs to close little changed.
US-listed shares of TSMC ended 10% higher and at a record high after the company raised its growth guidance and CEO CC Wei said that the demand for chips is “real.” Nvidia too made a new record but ended with gains of only 1%.
Swaps traders further reduced bets on Federal Reserve rate cuts in the remaining two meetings of the year. A jump in Treasury yields on Thursday pushed an index of dollar strength higher for a fourth session to a level not seen since early August. Australian and New Zealand yields climbed in early Friday trading, tracking the moves.
The shift in forecasts reflected robust US retail sales in September that exceeded expectations, illustrating resilient consumer spending that continues to power the economy. The data followed a blowout jobs report and a hotter-than-estimated consumer inflation print released earlier this month that only reinforced the view the US is nowhere near a recession.
“There’s a narrow path toward a Fed pause in November, but it would likely require every notable economic report between now and then indicating a stronger-than-assumed US economy,” said Matthew Weller at Forex.com and City Index. “Regardless of what the Fed does in November though, the projected path for interest rates looking out into 2025 and beyond is higher than it’s been in weeks.”
In commodities, gold climbed to a fresh record amid ongoing tensions in the Middle East, while West Texas Intermediate, the US crude price, steadied on Friday to trade around $70 per dollar.
Michael Green, chief strategist of Simplify Asset Management, said the rotation back into Big Tech names was simply investors returning to their “normal state of affairs.”
“This feels more like more of the normal, as compared to a broadening or reversal or anything important along those lines,” he told CNBC.
(With Inputs From Agencies.)