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US equities climb on Thursday as S&P 500 drives into new all-time high

3 months ago
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  • S&P 500 hit a new all-time high on Thursday
  • Nasdaq Composite climbed 2.96% through the day.
  • Nvidia Corp. (NVDA) cleared 16.4% after clobbering revenue expectations.

The S&P 500 (SPX) index rose 2.11% to close the session at 5,087.03. The Dow Jones (DJIA) climbed 1.18% to end at 39,069.11, while the Nasdaq (IXIC) gained 2.96% to finish at 16,041.62.

Stock market news

  • The Technology Sector was the best-performing major S&P 500 sector, rising 4.35% on the day. On the downside, the Utilities Sector fell 0.77%.
  • Nvidia Corp. (NVDA) stock climbed 16.4%, ending at $785.38 the biggest-gainer in the S&P 500. The chipmaker reported that earnings per share topped $5.16 versus the $4.64 forecast, while revenue climbed to $22.10 billion compared to the expected $20.62 billion. The company also said that it forecasts the current-quarter revenue of $24 billion, plus or minus 2%. 
  • Read more: Nvidia Stock Earnings: NVDA Q4 results trounce consensus.
  • Mizuho has raised the target price for Nvidia stock to $850 from $825, HSBC lifted its target to $880 from $835 and Citigroup revised its expectation to $820 from $575.
  • ETSY Inc. (ETSY) tumbled 8.44% to close at $70.62 as the worst performing S&P 500 stock on Thursday.
  • The US Department of Labor reported that there were 201,000 Initial Jobless Claims in the week ending February 17, a 12,000 decrease from the previous week’s reading of 213,000.
  • The Federal Reserve (Fed) said in the Minutes of the January policy meeting that most policymakers noted the risks associated with moving too quickly to ease the policy. Furthermore, the publication showed that officials highlighted uncertainty around how long the restrictive policy stance would be needed.
  • Read more: Fed Minutes suggest rates are at their peak.
  • Federal Vice Chair Philip Jefferson said on Thursday that he wants to move in a way that would not lead to stops and starts in policy and increase policy uncertainty.
  • Retailer giant Walmart Inc. (WMT) reported an adjusted earning per share of $1.8 ahead of the opening bell on Tuesday. The company said that it expects consolidated net sales to rise in the range of 3%-4% and announced that it will buy smart-TV producer Vizio (VZIO) for about $2.3 billion.
  • Home Depot Inc. (HD) said net income in Q4 was $2.8 billion, and the adjusted earnings per share was $2.82. The company, however, said that it projects sales for the fiscal year 2024 to be below estimates, citing slowing demand for discretionary items such as flooring, furniture and kitchen, per Reuters.

S&P 500 FAQs

The S&P 500 is a widely followed stock price index which measures the performance of 500 publicly owned companies, and is seen as a broad measure of the US stock market. Each company’s influence on the computation of the index is weighted based on market capitalization. This is calculated by multiplying the number of publicly traded shares of the company by the share price. The S&P 500 index has achieved impressive returns – $1.00 invested in 1970 would have yielded a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.

Companies are selected by committee, unlike some other indexes where they are included based on set rules. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be greater than or equal to $12.7 billion. Other criteria include liquidity, domicile, public float, sector, financial viability, length of time publicly traded, and representation of the industries in the economy of the United States. The nine largest companies in the index account for 27.8% of the market capitalization of the index.

There are a number of ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFD) to place bets on the direction of the price. In addition, that can buy into Index, Mutual and Exchange Traded Funds (ETF) that track the price of the S&P 500. The most liquid of the ETFs is State Street Corporation’s SPY. The Chicago Mercantile Exchange (CME) offers futures contracts in the index and the Chicago Board of Options (CMOE) offers options as well as ETFs, inverse ETFs and leveraged ETFs.

Many different factors drive the S&P 500 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the S&P 500 as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Source: https://www.fxstreet.com/news/stock-market-today-dow-jones-underperforms-tech-rally-lifts-nasdaq-futures-202402221204