Stocks Surge as Dow Nears 40,000 Mark, Tech Sector Leads the Way

The stock market persisted in its remarkable surge on Thursday, with the Dow Jones Industrial Average edging closer to the 40,000 mark while technology stocks experienced significant gains.

“The Dow closed with a gain of nearly 270 points, or 0.7 percent, putting it within striking distance of the major milestone at 39,781 points. The S&P 500 and Nasdaq composite jumped 0.4 percent and 0.4 percent, respectively, on the day.”

Driving this upward momentum, the microchip sector took the lead, lifting the Dow despite a setback in Apple’s stock value following legal action from the Justice Department. The lawsuit alleges that Apple’s practices have negatively impacted competition and various stakeholders including consumers, developers, and small businesses.

“Micron Technology soared 14 percent following stronger-than-expected earnings. The semiconductor sector was up overall, with the Taiwan Semiconductor, VanEck Semiconductor ETF and Marvell Technology surging around 2 percent and Nvidia and Intel up 1 percent.”

While Apple experienced a decline of more than 4 percent, other tech giants saw positive movement: Microsoft recorded a 1 percent increase, and Meta saw a modest rise of approximately half a percentage point.

“Apple closed down more than 4 percent, while other tech stocks climbed: Microsoft was up 1 percent, and Meta gained around a half a percentage point.”

Thursday marked the market debut of Reddit after the company priced its initial public offering at $34 per share, hitting the upper end of its anticipated range. This event is noteworthy as Reddit becomes the first major social media platform to go public since Pinterest’s debut in 2019.

“Reddit also made its market debut Thursday after pricing its initial public offering at $34 a share, on the high end of its expected range, on Wednesday. The popular forum website is the first major social media offering since Pinterest went public in 2019.”

The positive trend on Thursday follows a successful day of trading on Wednesday, during which all three major indexes achieved new record highs. This surge was supported by the Federal Reserve’s announcement that it anticipates three interest rate cuts throughout the year, despite leaving borrowing rates unchanged.

“The Thursday rally adds to a winning day Wednesday that saw all three indexes close at new highs after the Federal Reserve said it still expects three interest rate cuts this year, even as it left borrowing rates unchanged.”

Looking ahead, while traders do not anticipate a rate cut during the Federal Open Market Committee’s meeting in May, they have priced in a nearly 70 percent probability of a rate cut occurring in June, as indicated by the CME FedWatch Tool.

“While traders aren’t expecting a rate cut when the Federal Open Market Committee, the panel of Fed officials responsible for setting rates, meets again in May, they have priced in an almost 70 percent chance of a rate cut in June, according to the CME FedWatch Tool.”