Traders on Nasdaq floor react to record stock highs
US stocks soared to fresh record highs on Thursday as easing signals from the Federal Reserve and Nvidia’s multibillion-dollar investment in Intel energized markets. Investors appeared more confident, despite lingering concerns over inflation and labor market weakness.
The Nasdaq Composite led the rally, rising nearly 0.9% after news broke of Nvidia’s $5 billion investment in Intel. The S&P 500 gained 0.5%, while the Dow Jones Industrial Average, less tech-heavy, edged up 0.3%. All three indexes closed at new all-time highs. The Russell 2000, tracking small-cap companies, also climbed more than 2%, marking a record close.
Intel Soars as Nvidia Bets Big
Intel shares surged 23% on Thursday, a dramatic rebound for the struggling chipmaker. The gain came after Nvidia revealed plans to inject $5 billion into Intel, signaling a rare show of support in the competitive semiconductor sector. The move boosted investor confidence in the broader technology industry and helped drive the Nasdaq to the front of the day’s rally.
Fed’s Signal of More Cuts Ahead
The strong session followed the Federal Reserve’s quarter-point rate cut on Wednesday, its first move toward monetary easing in months. Investors had initially reacted cautiously, unsettled by Fed Chair Jerome Powell’s warning that “no risk-free path” exists amid high inflation and a weakening labor market.
However, optimism returned after the central bank’s dot plot suggested two additional rate cuts are possible in 2025. The prospect of cheaper borrowing costs revived sentiment, particularly in rate-sensitive sectors such as technology and small-cap stocks.
Labor Market Concerns Persist
Thursday’s economic data reflected continuing strains in the labor market. Weekly jobless claims showed improvement compared with the sharp increase reported the previous week. Yet the broader picture indicated stalled hiring, with both demand for workers and labor supply slowing down.
The figures underscored Powell’s caution, reminding investors that monetary easing comes amid fragile economic conditions.
Corporate Earnings in Focus
On the corporate side, FedEx is preparing to report its quarterly results after the closing bell. Analysts expect earnings to take a hit due to new trade rules introduced by President Trump. His decision to eliminate the “de minimis” tariff exemption for low-value packages shipped from China and Hong Kong is likely to weigh heavily on the delivery giant’s margins.
Trump’s Diplomatic and Trade Agenda
President Trump, currently on a state visit to the United Kingdom, attended a dinner with technology and finance leaders at Windsor Castle. His international trip coincides with ongoing trade tensions and growing investor anticipation of his next steps.
Attention now shifts to a scheduled call between Trump and Chinese President Xi Jinping on Friday. Trump suggested that a deal over TikTok was nearly finalized, while also hinting at broader discussions on tariffs and trade policy. Markets are expected to closely track developments from the high-level dialogue, which could influence global investor sentiment.
With Wall Street at record highs, the combination of Fed action, corporate investment, and geopolitical negotiations has left traders watching both Washington and Beijing for the next cue.
