Stocks had a strong rebound on Thursday, as the S&P 500 recovered from its worst day since September, reigniting the year-end rally. The Dow Jones Industrial Average saw a significant gain of 322.35 points, equivalent to 0.87%, closing at 37,404.35. Simultaneously, the Nasdaq Composite surged by 1.26% to reach 14,963.87.
The S&P 500 also joined the rally, adding 1.03% and closing at 4,746.75. This puts the broad market index just about 1% away from its highest closing level and 1.5% from its all-time intraday record.
The positive momentum in the S&P 500 was widespread, with more than 450 companies within the index experiencing gains. Notably, Micron Technology stood out as the top performer, leaping by an impressive 8.6%. This surge followed the memory chipmaker surpassing quarterly expectations and offering current-quarter guidance that exceeded forecasts. Chip stocks, in general, witnessed a notable rise, with Intel and Advanced Micro Devices both gaining 2.9% and 3.3%, respectively.
Salesforce was another notable gainer in the Dow, rising by 2.7% after receiving an upgrade from Morgan Stanley.
This rebound comes after a recent down day on Wall Street, where investors decided to take profits following a period of gains. On Wednesday, both the Dow and Nasdaq experienced their worst sessions since October, ending their respective nine-day winning streaks. The S&P 500 also had its roughest day since September.
To put things into perspective, from their late October closing lows through Thursday, the Dow and S&P 500 each surged by more than 15%, while the Nasdaq Composite saw an impressive gain of over 18% during the same timeframe.
In recent economic data, initial claims for state unemployment benefits increased to 205,000, slightly below economists' expectations of 215,000. Additionally, the third estimate of third-quarter GDP revealed a revised growth rate of 4.9%, down from the previously reported 5.2%. The PCE price index excluding food and energy components rose at a 2.0% rate in the third quarter, and factory activity in the Mid-Atlantic region continued to contract in December. Some financial forecasters predict a potential U.S. recession, while a monthly report from the Bureau of Economic Analysis is expected to support the case for lower interest rates in the future.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
