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Nasdaq ends sharply higher as Alphabet and AMD fuel AI surge

Published Dec 07, 2023 06:01AM ET Updated Dec 07, 2023 07:21PM ET
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© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 27, 2023. REUTERS/Brendan McDermid/File Photo
 
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By Noel Randewich and Shristi Achar A

(Reuters) - The Nasdaq ended sharply higher on Thursday after Alphabet (NASDAQ:GOOGL) and Advanced Micro Devices (NASDAQ:AMD) sparked a megacap rally on fresh optimism about artificial intelligence.

Shares of Alphabet jumped 5.3% as analysts cheered the launch of the Google-parent's newest AI model, while AMD soared nearly 10% after the company estimated the potential market for its data center AI chips could reach $45 billion this year.

Other heavyweight tech-related stocks also gained, with Nvidia (NASDAQ:NVDA) and Meta Platforms (NASDAQ:META) rising over 2%, Amazon (NASDAQ:AMZN) up 1.6% and Apple (NASDAQ:AAPL) 1% higher.

The Philadelphia semiconductor index jumped 2.8%, increasing its 2023 gain to 48%, much of that fueled by bets about the future of AI.

"Today it's an AMD-Google rally. There's a contagion effect across the market. Everyone wants to get on the bandwagon," said Jay Hatfield, CEO of Infrastructure Capital Management in New York.

"We're kind of in this weird market, a tag-team market, where one day tech leads, and then the next day value and the broad market lead."

The S&P 500 has steadily climbed since the end of October on expectations the Federal Reserve has finished its campaign of interest rate hikes and that it could begin cutting rates in March.

The S&P 500 climbed 0.80% to end the session at 4,585.59 points, with 1.8 stocks in the index gaining for each one that fell.

The most traded stock in the S&P 500 was Tesla (NASDAQ:TSLA), with $25.7 billion worth of shares changing hands during the session. The shares rose 1.37%.

The Nasdaq Composite jumped 1.37% to 14,339.99 points, while Dow Jones Industrial Average rose 0.18% to 36,117.57 points.

Volume on U.S. exchanges was relatively heavy, with 11.2 billion shares traded, compared to an average of 10.8 billion shares over the previous 20 sessions.

Traders have almost fully priced in the likelihood of the Fed keeping rates unchanged at its meeting next week.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased less than expected last week to a seasonally adjusted 220,000 for the week.

A Labor Department jobs report due on Friday could hint at how quickly the U.S. economy is softening and may sway expectations about when the Fed is likely to begin cutting rates. Non-farm payrolls are expected to have increased by 180,000 jobs last month after rising by 150,000 in October.

Interest rate futures imply a nearly 64% chance of a rate cut as soon as March, according to the CME Group's (NASDAQ:CME) FedWatch tool.

Limiting gains in the Dow, shares of Merck fell 1.7% after the drugmaker's immunotherapy combination failed in a lung cancer study.

Nasdaq ends sharply higher as Alphabet and AMD fuel AI surge
 

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Comments (3)
jason moore
jason moore Dec 07, 2023 7:39PM ET
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any thoughts on tomorrow NFP will it move the Nasdaq? up or down
Rajesh Kumar
Rajesh Kumar Dec 07, 2023 11:40AM ET
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No one trades in NQ anymore.
Mohammed Kumar
Mohammed Kumar Dec 07, 2023 11:40AM ET
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I do
Lehlohonolo Koele
Lehlohonolo Koele Dec 07, 2023 7:28AM ET
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is Nasdaq going up?
 
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