U.S. stock markets closed higher on Thursday as artificial intelligence (AI) trade regained momentum. Decline in crude oil prices despite the continuation of the Middle East war also boosted market participants’ sentiments. All three major stock indexes ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 139.02 points to close at 52,478.41 after a choppy session. Notably, 17 components of the 30-stock index ended in positive territory and 13 ended in negative territory. At the intraday low, the blue-chip index was down nearly 99 points.
The tech-heavy Nasdaq Composite finished at 26,206.89, rising 1.3% or 336.24 points on strong performance by AI giants. At the intraday low, the tech-laden index was down nearly 45 points. The S&P 500 gained 0.8% to finish at 7,543.64. However, nine out of 11 sectors of the broad-market index ended in negative territory while two finished in positive territory.
The Materials Select Sector SPDR (XLB), the Financials Select Sector SPDR (XLF) and the Consumer Discretionary Select Sector SPDR (XLY) fell 2.6%, 1.9% and 1.8%, respectively. On the other hand, the Information Technology Select Sector SPDR (XLK) and the Energy Select Sector SPDR (XLE) rose 1.2% and 1.8%, respectively.
The fear gauge CBOE Volatility Index (VIX) fell 6.3% to 15.84. A total of 14.7 billion shares were traded on Thursday, lower than the last 20-session average of 22.9 billion. Advancers outnumbered advancers on the NYSE by a 1.5-to-1 ratio. On the Nasdaq, a 1.65-to-1 ratio favored advancing issues.
Developments on AI Front
AI infrastructure trade is now expanding from chips to memory and storage devices as well as servers and racks. Reuters reported that the AI-powered high-bandwidth memory manufacturer Micron Technology Inc. MU has decided to invest more than $250 billion in the United States through 2035. The company’s original investment plan was $170 billion, which it raised to $200 billion in June.
Micron also unveiled its plan to invest $3 billion in GlobalWafers’ silicon wafer manufacturing operations in Texas. The two companies plan to enter a 10-year deal to ensure long-term supply of raw silicon wafer capacity to the AI memory chip manufacturing giant.
Reuters reported that the social media behemoth Meta Platforms Inc. META plans to start manufacturing a customized AI chip from September, which will boost its overall computing power to 14 gigawatts in 2027.
Moreover, META has introduced a major update to its Muse Spark AI platform, which the company said will be “very aggressive and attractive” compared with other competing models of Anthropic and OpenAI. META’s AI chief Alexandr Wang said that the company’s newly introduced Muse Spark 1.1 platform will be its “strongest model for agentic and coding work yet.”
Consequently, the stock prices of Micron and Meta Platforms advanced 4.5% and 4.7%, respectively. Micron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Economic Data
The Department of Labor reported that initial claims decreased by 2,000 to 215,000 for the week ended July 4, below the Zacks Consensus Estimate of 223,000. The previous week’s data was revised upward to 217,000 from 215,000 reported earlier.
Continuing claims (those who have already received government aid and reported a week behind) increased 8,000 to 1.814 million for the week ended June 27. The previous week’s level was revised downward by 8,000 to 1,814,000 from 1,806,000 reported earlier.
The National Association of REALTORS reported that existing home sales unexpectedly fell to 4.09 million units in June, missing the Zacks Consensus Estimate of 4.19 million units. The metric for May was revised upward to 4.19 million units from 4.17 million units reported earlier.
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This article originally published on Zacks Investment Research (zacks.com).
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